Editor's Note:

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

(bullish candidates) FOSL, BBBY, AMGN, UTHR, UA, QCOM, LLL, GPC, COL, VTR IDXX, FFIV


NEW DIRECTIONAL CALL PLAYS

Chicago Bridge & Iron - CBI - close: 44.90 change: +0.92

Stop Loss: 43.25
Target(s): 49.25
Current Option Gain/Loss: Unopened
Time Frame: up to the Feb. 23rd earnings report
New Positions: Yes, see below

Company Description

Why We Like It:
The stock market's rally has helped lift CBI to major resistance at the $45.00 level. A failure here would look like a huge bearish double top. Yet a breakout could signal a run to the next level of significant resistance near $50.00.

I am suggesting a trigger to open bullish positions at $45.25. If triggered we'll use a stop at $43.25. Our exit target is $49.25. We do not want to hold over the Feb 23rd earnings report. FYI: The Point & Figure chart for CBI is bullish with a long-term $70 target.

(Buy Calls) Trigger @ $45.25

- Suggested Positions -

buy the MAR $45 call (CBI1217C45) current ask $2.10

Annotated Chart:

Entry on February xx at $ xx.xx
Earnings Date 02/23/12 (unconfirmed)
Average Daily Volume = 852 thousand
Listed on February 04, 2012


S&P Oil ETF - XES - close: 37.55 change: +0.62

Stop Loss: 36.45
Target(s): 43.00
Current Option Gain/Loss: Unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The XES is an oil services ETF. The industry is poised to breakout past major resistance and appears to be in the process of doing that right now. The XES just rally past its simple 200-dma and price resistance near $37.50. I want to see a little more confirmation. I am suggesting we buy calls at $37.75 or higher. More conservative traders may want to consider waiting for XES to close over $38.00 before initiating new positions. The Point & Figure chart for XES is currently bearish but a rally past $38.00 would create a brand new quadruple top breakout buy signal.

The option spreads on the XES a bit wide, which makes this a higher-risk trade. I am suggesting we keep our position size small to limit our risk. Our multi-week exit target is $43.00. I prefer the March calls but short-term traders can use February options but these expire in two weeks.

Trigger @ 37.75 (small positions)

- Suggested Positions -

buy the Feb $37 call (XES1218B37) current ask $1.05

- or -

buy the Mar $36 call (XES1217C36) current ask $2.55

Annotated Chart:

Entry on February xx at $ xx.xx
Earnings Date --/--/--
Average Daily Volume = 177 thousand
Listed on February 04, 2012