NEW DIRECTIONAL CALL PLAYS

Trimble Navigation - TRMB - close: 55.43 change: +0.57

Stop Loss: 51.90
Target(s): 59.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
TRMB is a key player in the GPS navigation industry and all the myriad forms this technology takes. The stock's breakout past resistance near $52.00 was a significant buy signal. Now after several days of digesting its gains the stock is on the rise again.

I am suggesting bullish positions tomorrow morning but only if both TRMB and the S&P 500 index open positive. We will start with a stop loss under support at the $52.00 level. More conservative traders may want to use a tighter stop loss. Our multi-week target is $59.75. FYI: The Point & Figure chart for TRMB is bullish with a $63 target.

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

- Suggested Positions -

buy the Apr $55 call (TRMB1221D55) current ask $1.75

- or -

buy the May $60 call (TRMB1219E60) current ask $0.80

Annotated Chart:

Entry on March xx at $ xx.xx
Earnings Date 04/26/12 (unconfirmed)
Average Daily Volume = 522 thousand
Listed on March 27, 2012


NEW DIRECTIONAL PUT PLAYS

iShares Russell 2000 ETF - IWM - close: 83.81 change: -0.59

Stop Loss: 87.51
Target(s): 78.50
Current Option Gain/Loss: Unopened
Time Frame: several weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The small cap index and ETF is struggling to build on its recent breakout attempt. The small caps could struggle even further once the end of the quarter passes and fund managers stop window dressing. Nimble traders should be able to scalp a few points on a correction lower.

We are suggesting a trigger to open small bearish put positions at $83.45 with a stop loss at $87.51. Our exit target is $78.50 near the early March lows.

Or as an alternative entry point you could wait for the IWM to break the trend line of higher lows (on the second chart below) and use a trigger to buy puts at $80.75 and target a drop toward the $76.00 area or its simple 200-dma instead. We're not going to track this alternative trade set up and will focus on the first one.

Trigger @ $83.45

- Suggested Positions -

buy the Jun $82 PUT (IWM1216R82) current ask $2.88

Trade Set Up IWM 90-minute chart:

Alternative Trade Set Up IWM chart:

Entry on March xx at $ xx.xx
Earnings Date --/--/--
Average Daily Volume = 54.8 million
Listed on March 27, 2012