Editor's Note:

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

MCK - If you're looking for a bearish trade then check out MCK, which is underperforming the market today and appears to be breaking down from its sideways consolidation.

INTU - the stock is in the process of breaking out past resistance at its 2011 highs.

MMM - shares are about to breakout past technical resistance at the 200-dma.

SNDK - this stock just broke through a two-month trendline of lower highs.

RIG - this oil services stock may have put in a bottom but I'd probably look for a little pull back first.

PVH - I am tempted to buy today's bounce near its 10-dma.

NFLX - aggressive traders might want to consider buying a breakout past resistance at $100.00. It could spark more short covering. I would not want to hold over earnings on Jan. 25th.

DLTR - this retail name is showing relative strength and hitting new record highs.

ORLY - also hitting new all-time highs.

MCD - I am tempted to buy calls on MCD here with a stop just under $100 but earnings are coming up on January 24th.


NEW DIRECTIONAL CALL PLAYS

iShares Russell 2000 ETF - IWM - close: 77.72 change: +1.36

Stop Loss: 75.45
Target(s): 82.50
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The stock market is in breakout mode. The Dow Industrial average is above resistance near 12,500. The S&P 500 index is above resistance near 1,300. The NASDAQ composite is hitting new five-month highs. The small cap Russell 2000 index is also breaking out to new relative highs.

As investors grow more confident in the rally the small caps should outperform. Traders bought the dip in the IWM near its 10 and 200-dma this morning. I am suggesting we buy calls tomorrow morning. We will use a stop at $75.45. You may want to consider a stop closer to the 10-dma instead (currently 75.95). Our multi-week target is $82.50. Keep in mind the $80.00 level might offer some overhead resistance. FYI: The Point & Figure chart for IWM is bullish with a $90 target.

- Suggested Positions -

buy the Feb $80 call (IWM1218B80) current ask $1.05

Annotated Chart:

Entry on January 19 at $ xx.xx
Earnings Date --/--/--
Average Daily Volume = 40 million
Listed on January 18, 2012


Northrop Gruman - NOC - close: 60.17 change: +0.54

Stop Loss: 57.90
Target(s): 64.00
Current Option Gain/Loss: Unopened
Time Frame: up to NOC's early February earnings report.
New Positions: Yes, see below

Company Description

Why We Like It:
Defense stocks have continued to rally and the group is building on a strong pattern of higher lows. NOC recently broke out past technical resistance at its simple 200-dma. Now it's pushing past round-number resistance at $60.00.

I am suggesting new bullish positions tomorrow morning but only if both NOC and the S&P 500 index both open positive. If opened we'll use a stop at $57.90. Our target is $64.00 but we plan to exit prior to NOC's earnings report in early February. FYI: The Point & Figure chart for NOC is bullish with a $71 target.

*See Entry Details Above*

- Suggested Positions -

buy the Feb $60 call (NOC1218B60) current ask $1.60

Annotated Chart:

Entry on January xx at $ xx.xx
Earnings Date 02/01/12 (unconfirmed)
Average Daily Volume = 1.5 million
Listed on January 18, 2012