Editor's Note:

Tonight we're adding a couple of bullish candidates. However, readers will want to keep an eye on the transports and the airline stocks. These groups could suffer as crude oil continues to go higher. Oil might see a little dip next week. That could produce a little oversold bounce in the airlines and transports, which might end up being an entry point for bearish put positions.


NEW DIRECTIONAL CALL PLAYS

American Express Co - AXP - close: 53.33 change: +0.66

Stop Loss: 51.25
Target(s): 57.50
Current Option Gain/Loss: Unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Financials have been chopping sideways the last couple of weeks. Yet AXP appears to be stair-stepping higher. The stock is on the verge of breaking out to new three-year highs. I am suggesting we open small bullish positions on Monday morning but only if both AXP and the S&P 500 index open positive. We'll use a stop loss at $51.25. Our multi-week target is $56.50. Keep in mind that AXP doesn't move super fast. Pick an option that gives you enough time. More conservative traders may want to wait for AXP to close over the $54.00 level before initiating new positions. FYI: The Point & Figure chart for AXP is bullish with a $75 target.

Do not enter position unless AXP and the S&P 500 are both positive at the open

- Suggested Positions - (Small Positions)

buy the Apr 52.50 call (AXP1221D52.5) current ask $2.21

Annotated Chart:

Entry on February xx at $ xx.xx
Earnings Date 04/19/12 (unconfirmed)
Average Daily Volume = 5.7 million
Listed on February 25, 2012


VMware, Inc. - VMW - close: 100.52 change: +0.90

Stop Loss: 97.25
Target(s): 108.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Technology stocks continue to show strength with the NASDAQ composite at multi-year highs. While VMW is not at multi-year highs the trend is definitely higher. The stock just broke out past round-number resistance at $100.00 on Friday. Shares also appear to have broken through a potential trend line of lower highs on the weekly chart (see below).

I am suggesting we open small bullish positions at the open on Monday morning but only if both VMW and the S&P 500 index both open positive. We'll use a stop loss at $97.25, which is just under Thursday's low. Our target is $108.50. FYI: The Point & Figure chart for VMW is bullish with a $117 target.

Do not enter position unless VMW and the S&P 500 are both positive at the open

- Suggested Positions - (Small Positions)

buy the Mar $105 call (VMW1217C105) current ask $1.30

- or -

buy the Apr $105 call (VMW1221D105) current ask $3.40

Annotated Chart:

Entry on February xx at $ xx.xx
Earnings Date 04/19/12 (unconfirmed)
Average Daily Volume = 1.5 million
Listed on February 25, 2012