Editor's Note:

In addition to tonight's new candidate, consider these stocks as possible trading ideas:

CAT - Caterpillar is showing strength and just rallied past its simple 200-dma. A breakout past significant resistance at the $98.00 level could be a bullish entry point.

RRC - Shares of this oil stock are underperforming. The stock just broke down under support near $60 and its 200-dma and 200-ema. Today's move may be a bearish entry point to buy puts.

- James


NEW DIRECTIONAL CALL PLAYS

Starwood Hotel & Resorts - HOT - close: 51.41 change: +0.99

Stop Loss: 48.75
Target(s): 55.75
Current Option Gain/Loss: Unopened
Time Frame: exit prior to earnings
New Positions: Yes, see below

Company Description

Why We Like It:
Shares of HOT have been showing relative strength lately. That might be due to speculation that HOT is a takeover target. The stock's recent strength has produced a breakout past resistance near $50.00 and its simple 200-dma.

I am suggesting bullish positions tomorrow but only if both HOT and the S&P 500 index open positive. If the S&P 500 is flat then we'll base our entry on HOT's opening price. We'll place our stop at $48.75, which is under technical support at the exponential 200-dma. Our target is $55.75 but we want to exit prior to the early February earnings report. FYI: The Point & Figure chart for HOT is bullish with a $64 target.

*See Entry Details Above*

- Suggested Positions -

buy the Feb $52.50 call (HOT1218B52.5) current ask $1.86

Annotated Chart:

Entry on January xx at $ xx.xx
Earnings Date 02/02/12 (confirmed)
Average Daily Volume = 2.4 million
Listed on January 09, 2012