NEW DIRECTIONAL CALL PLAYS

Hi Tech Pharmacal Co. - HITK - close: 40.65 change: +1.76

Stop Loss: 38.49
Target(s): 44.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
HITK is a specialty drug maker and the stock has been able to maintain its bullish trend in spite of the market's choppiness. Shares broke out past resistance at $40.00 today. This could fuel more short covering. The most recent data listed short interest at more than 13% of the very small 10 million share float.

After a +4.5% gain today the options are going to be a little bit inflated. We are going to want to keep our position size small to limit our risk. I am suggesting bullish positions tomorrow morning but only if both HITK and the S&P 500 index open positive. We'll use a stop loss at $38.49, under Monday's low. Our target is $44.50. Readers might want to aim higher. The Point & Figure chart for HITK is bullish with a $58 target.

*see Entry Details Above*

- Suggested Positions -

buy the 2012Jan $40 call (HITK1221A40) ask $2.40

Annotated Chart:

Entry on December xx at $ xx.xx
Earnings Date 03/12/12 (unconfirmed)
Average Daily Volume = 298 thousand
Listed on December 20, 2011


JPMorgan Chase & Co - JPM - close: 32.21 change: +1.51

Stop Loss: 30.35
Target(s): 37.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
JPM is generally considered the best in breed among U.S. banking stocks. Financials were leading the market higher with big gains today. JPM posted a +4.9% rally. The stock stalled near its 40 and 50-dma but if this positive news about falling European bond yields continues then the banking stocks could see a big move higher.

We are suggesting a trigger to open bullish positions at $32.75. We'll place our stop loss under Monday's low. More conservative traders might want to wait for JPM to breakout past technical resistance at its 100-dma instead (currently near $33.22).

Our multi-week target is $37.50.

Trigger @ 32.75

- Suggested Positions -

buy the 2012Jan $33 call (JPM1221A33) ask $0.99

- or -

buy the February $35 call (JPM1218B35) ask $0.83

Annotated Chart:

Entry on December xx at $ xx.xx
Earnings Date 01/13/12 (unconfirmed)
Average Daily Volume = 45.3 million
Listed on December 20, 2011


Waters Corp. - WAT - close: 74.11 change: +2.39

Stop Loss: 70.75
Target(s): 79.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
WAT is a medical equipment maker. The stock has been churning sideways in the $71-82 zone for months. Today's gain is a bounce off the bottom of this trading range and a potential entry point for calls. We want to see a little bit more confirmation. I am suggesting a trigger to buy calls at $74.55 with a stop loss at $70.75. Our target is $79.50.

Trigger @ 74.55

- Suggested Positions -

buy the Jan $75 call (WAT1221A75) ask $2.25

Annotated Chart:

Entry on December xx at $ xx.xx
Earnings Date 01/24/12 (unconfirmed)
Average Daily Volume = 787 thousand
Listed on December 20, 2011