NEW DIRECTIONAL CALL PLAYS

OpenTable, Inc. - OPEN - close: 40.15 change: +1.39

Stop Loss: 38.40
Target(s): 48.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Shares of OPEN could see a short squeeze soon. This stock saw a rocket-like rise higher from early 2010 near $25 to hit $118 in early 2011. Now after a painful decline from those highs it looks like OPEN is on the verge of a breakout. The stock has consistently failed at its 30 or 50-dma for the last eight months. Now the stock has rallied back to resistance near $40 and its 50-dma.

A breakout could produce a short squeeze. The most recent data listed short interest at 53% of the very small 16.2 million-share float. I am suggesting we buy calls if OPEN trades at $41.55. This can be a volatile stock so we'll use a wide stop loss at $38.40. Our target is the simple 100-dma but we'll tentatively put our exit target at $48.50. We want to keep our position size small to limit our risk.

Trigger @ 41.55 (small positions)

- Suggested Positions -

buy the 2012Jan $45 call (OPEN1221A45) ask $1.20

Annotated Chart:

Entry on December xx at $ xx.xx
Earnings Date 02/07/12 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on December 17, 2011


NEW DIRECTIONAL PUT PLAYS

Coach, Inc. - COH - close: 57.59 change: -1.22

Stop Loss: 60.10
Target(s): 51.00
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Coach manufactures and sells a variety of luxury goods. It looks like investors are turning cautious on the stock. Shares just broke down below key support in the $60-58 zone and its 100-dma and 200-dma. I am suggesting bearish put positions at the open on Monday with a stop loss at $60.10. Our multi-week target is the $51.00 level. FYI: The Point & Figure chart for COH is bearish with a $52 target but this could grow.

- Suggested Positions -

buy the 2012Jan $55 PUT (COH1221M55) ask $1.55

Annotated Chart:

Entry on December xx at $ xx.xx
Earnings Date 01/25/12 (unconfirmed)
Average Daily Volume = 2.9 million
Listed on December 17, 2011