NEW DIRECTIONAL CALL PLAYS

Ross Stores Inc. - ROST - close: 61.50 change: -0.72

Stop Loss: 59.45
Target(s): 64.50
Current Option Gain/Loss: + 0.0%
Time Frame: exit prior to the mid May earnings report
New Positions: Yes, see below

Company Description

Why We Like It:
Shares of this discount apparel chain have shown incredible strength over the last several months. Investors are constantly buying the dips. I would prefer to buy a dip near the rising 30-dma or 50-dma but that doesn't happen every often. Traders were already buying the dip this afternoon when ROST fell toward $61.00.

I am suggesting small bullish positions at the open tomorrow. We'll set our exit target at $64.50 but if shares don't hit our exit in time we'll close this trade prior to the mid May earnings report. I'm suggesting an initial stop loss at $59.45 since the $60.00 level should be support. More aggressive traders will want to aim higher and use a stop loss just under $59.00 instead.

(small positions) at the open tomorrow

- Suggested Positions -

buy the May $62.50 call (ROST1219E62.5) current ask $1.10

Annotated Chart:

Entry on April xx at $ xx.xx
Earnings Date 05/17/12 (unconfirmed)
Average Daily Volume = 2.0 million
Listed on April 30, 2012


NEW DIRECTIONAL PUT PLAYS

Ulta Salon - ULTA - close: 88.18 change: -1.44

Stop Loss: 91.65
Target(s): 82.50
Current Option Gain/Loss: + 0.0%
Time Frame: up to May option expiration
New Positions: Yes, see below

Company Description

Why We Like It:
This beauty products retailer appears to be correcting lower. The oversold bounce turned into a bear-flag pattern that just failed near its 40 and 30-dma. Today's drop looks like the beginning of its next leg lower.

I am suggesting bearish positions at the open tomorrow. We'll use a stop just above Friday's high. Our target is $82.50.

- Suggested Positions -

buy the May $85 PUT (ULTA1219Q85) current ask $1.40

Annotated Chart:

Entry on April xx at $ xx.xx
Earnings Date 06/07/12 (unconfirmed)
Average Daily Volume = 651 thousand
Listed on April 30, 2012