Editor's Note:

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

WPI - Shares continue to look weak and I'm tempted to buy puts on the stock with a stop above Friday's high.

NOV - Oil stocks were showing strength today. I would be tempted to buy calls on NOV if shares traded at $76.55 or higher.


NEW DIRECTIONAL CALL PLAYS

Dollar Tree Inc. - DLTR - close: 85.79 change: +1.33

Stop Loss: 83.75
Target(s): 89.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
DLTR continues to show relative strength. Last week the stock broke out past key resistance in the $84-85 zone. Shares have since retested this area as new support. The bounce today looks like a new bullish entry point.

I am suggesting new positions at the open tomorrow but only if both DLTR and the S&P 500 index open positive. More conservative traders may want to wait for DLTR to trade at a new high ($86.55) before initiating positions. Our target is $89.75. More aggressive traders may want to aim higher. FYI: The Point & Figure chart for DLTR is bullish with a $113 target.

Do not enter position unless DLTR and the S&P500 are both positive at the open

- Suggested Positions -

buy the Feb $87.50 call (DLTR1218B87.5) current ask $1.30

Annotated Chart:

Entry on January xx at $ xx.xx
Earnings Date 02/22/12 (unconfirmed)
Average Daily Volume = 1.2 million
Listed on January 23, 2012


NEW DIRECTIONAL PUT PLAYS

Abercrombie & Fitch - ANF - close: 44.23 change: -0.28

Stop Loss: 46.05
Target(s): 40.00 or 37.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Shares of this apparel company stock are really struggling. ANF is not participating in the market's rally. The stock has been consolidating sideways along the bottom of its two-month trading range with a bearish trend of lower highs. Now ANF looks poised to breakdown to new lows. More aggressive traders may want to buy puts now. I am suggesting a trigger to buy puts at $43.40 (new relative low). I am listing two different targets. I'd look to exit at $40.00 or $37.00. Keep in mind the $40.00 level could offer some round-number support. FYI: The Point & Figure chart for ANF is very bullish with a long-term $12 target.

Trigger @ 43.40

- Suggested Positions -

buy the Feb $43 PUT (ANF1218N43) current ask $1.97

Annotated Chart:

Entry on January xx at $ xx.xx
Earnings Date 02/15/12 (unconfirmed)
Average Daily Volume = 2.9 million
Listed on January 23, 2012