NEW DIRECTIONAL CALL PLAYS

Edwards Lifesciences - EW - close: 64.12 change: +1.10

Stop Loss: 61.49
Target(s): 69.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
EW designs treatments for advanced cardiovascular disease. The stock has been struggling lately but shares may have just found a bottom. The 2011 August intraday low was $61.63 and the closing low was $62.83. Shares hit $62.00 this morning and immediately bounced. This could be the beginning of a larger oversold bounce.

I am suggesting we buy calls tomorrow morning but only if both EW and the S&P 500 open positive tomorrow. We'll use a stop loss at $61.49. Our exit target is $69.50.

*See Entry Details Above*

- Suggested Positions -

buy the DEC $65 call (EW1117L65) current ask $2.45

- or -

buy the 2012Jan $70 call (EW1221A70) current ask $1.80

Annotated Chart:

Entry on November xx at $ xx.xx
Earnings Date 02/02/12 (unconfirmed)
Average Daily Volume = 1.2 million
Listed on November 21, 2011


Family Dollar Stores - FDO - close: 57.57 change: +0.85

Stop Loss: 54.75
Target(s): 64.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The markets have been volatile the last couple of weeks. Yet for FDO the pull back has been relatively slow and steady. This looks like a normal, healthy correction after the stock's surge to new all-time highs back in October. Broken resistance in the $55-56 zone along with the 50-dma are offering support. Today's bounce was a nice show of relative strength.

I am suggesting we buy calls on FDO tomorrow morning but only if both FDO and the S&P 500 index open positive. We'll use a stop loss at $54.75. More conservative traders may want to wait for FDO to break the short-term trend of lower highs before initiating positions. A move past $58.25 would suffice. Keep in mind that FDO doesn't move that fast and you may want the extra time.

I am setting our exit target at $64.00 using the January calls. We will list December calls as well but you may have to exit earlier. FYI: The Point & Figure chart for FDO is bullish with a $66 target.

*See Entry Details Above*

- Suggested Positions -

buy the DEC $60 call (FDO1117L60) current ask $0.50

- or -

buy the JAN $60 call (FDO1221A60) current ask $1.65

Annotated Chart:

Entry on November xx at $ xx.xx
Earnings Date 01/04/12 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on November 21, 2011