Editor's Note:

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

N - looks tempting with a breakout past resistance near $42.00. Earnings are coming up on Feb. 2nd.

ADS - is showing relative strength today with a +1.5% gain and a breakout to new highs past $110. Earnings are coming up on Feb. 2nd.

BBBY - shares look like they are ready to challenge resistance near $64.00 again.

AGN - A rally past $90 might be a new bullish entry point. Earnings are coming up on Feb. 2nd.

BWLD - if you like to buy bounces off support then BWLD could be a potential trade for you. Shares just rebounded off their 200-dma after a four-week correction.

NOTE: Normally we want to avoid holding positions over an earnings announcement.


NEW DIRECTIONAL CALL PLAYS

Lufkin Industries - LUFK - close: 75.25 change: +2.56

Stop Loss: 73.40
Target(s): 82.00
Current Option Gain/Loss: Unopened
Time Frame: up to the Feb. 9th earnings report.
New Positions: Yes, see below

Company Description

Why We Like It:
LUFK is in the basic materials sector but it serves the oil and energy industry. Shares have a multi-month bullish trend of higher lows. Yet over the last couple of weeks it has been churning sideways. There is resistance in the $76.50 area. I am suggesting a trigger to open bullish positions at $76.60 with a stop at $73.40. Our target is $82.00 but we want to exit prior to the Feb. 9th earnings report. FYI: The Point & Figure chart for LUFK is bullish with an $85 target.

Trigger @ 76.60

- Suggested Positions -

buy the Feb $80 call (LUFK1218B80) current ask $1.90

Annotated Chart:

Entry on January xx at $ xx.xx
Earnings Date 02/09/12 (confirmed)
Average Daily Volume = 300 thousand
Listed on January 24, 2012