Editor's Note:

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

APEI - this education stock has been showing relative strength this week. A breakout past resistance near $45.00 could be a bullish entry point.

ORLY - auto parts retailer ORLY is on the verge of hitting new all-time highs. A rally past $82.25 could be a new bullish entry point.

SHLD - it looks like SHLD may have found a bottom. The stock is starting to bounce with big volume. At this point trading SHLD is still a risky bet but aggressive traders could bet on the oversold bounce rising into the $37.50-40.00 zone. The challenge is where to place your stop loss.

- James


NEW DIRECTIONAL CALL PLAYS

Berkshire Hathaway Inc. - BRK.B - close: 78.50 change: +0.50

Stop Loss: 76.40
Target(s): 83.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Warren Buffet's Berkshire Hathaway appears to be breaking out. The stock has been consolidating in a neutral pattern of lower highs and higher lows for weeks. Today's move is a bullish breakout from this pattern.

I am suggesting new call positions tomorrow morning but only if both BRK.B and the S&P 500 index open positive. If the S&P opens flat then we'll have to base our decision on BRK.B and if it opens higher. More conservative traders could wait for the stock to rally past $79.00 first before buying calls. Our multi-week target is $83.50. We do not want to hold over the late February earnings report.

*See Play Details Above*

- Suggested Positions -

buy the Feb $80 call (BRKB1218B80) current ask $0.97

Annotated Chart:

Entry on January xx at $ xx.xx
Earnings Date 02/27/12 (unconfirmed)
Average Daily Volume = 4.4 million
Listed on January 12, 2012