NEW DIRECTIONAL CALL PLAYS

Ashland Inc. - ASH - close: 67.31 chagne: +1.01

Stop Loss: 64.49
Target(s): 74.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
ASH is a specialty chemical company. The stock has been consolidating sideways the last couple of weeks while still maintaining a bullish trend of higher lows in spite of the market's recent weakness. This relative strength looks ready to blossom into a new bullish breakout higher.

I am suggesting a trigger to launch positions at $67.75. We'll use a stop $64.49, just under its May low. I am expecting possible round-number resistance at $70.00 but our multi-week target is $74.00. FYI: The Point & Figure chart for ASH is bullish with an $84 target.

Trigger @ 67.75

- Suggested Positions -

buy the Jun $70 call (ASH1216F70) current ask $1.10

Annotated Chart:

Entry on May xx at $ xx.xx
Earnings Date 07/26/12 (unconfirmed)
Average Daily Volume = 763 thousand
Listed on May 12, 2012


NEW DIRECTIONAL PUT PLAYS

Fluor Corp. - FLR - close: 53.89 change: -0.71

Stop Loss: 56.35
Target(s): 50.25
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
FLR is a heavy construction company that just reported earnings a few days ago. You can see the spike higher on May 4th when FLR beat earnings estimates by four cents. Yet that news was not enough to reverse the bearish trend of lower highs and lower lows. The earnings rally reversed at technical resistance at the 50-dma. Now FLR has broken down under support near $56 and its 200-dma and 150-dma. The recent oversold bounce just two days ago failed at this level near $56.00.

I am suggesting we launch bearish put positions at the open on Monday morning. We'll use a stop loss at $56.35, just above Thursday's high. It's possible that FLR might see some support at a trend of higher lows (on the chart as a dotted line) near $52 but we are setting our exit target at $50.25.

- Suggested Positions -

buy the Jun $52.50 PUT (FLR1216R52.5) current ask $1.75

Annotated Chart:

Entry on May xx at $ xx.xx
Earnings Date 05/03/12
Average Daily Volume = 1.8 million
Listed on May 12, 2012


Tiffany & Co. - TIF - close: 63.04 change: -0.59

Stop Loss: 65.25
Target(s): 59.00
Current Option Gain/Loss: Unopened
Time Frame: exit prior to the May 24th earnings report
New Positions: Yes, see below

Company Description

Why We Like It:
This is going to be a short-term trade. TIF, a high-end jewelry store, has broken down under support. Now after three days of consolidating sideways the stock looks poised to continue lower again. I am suggesting a trigger to buy puts at $62.75, which would be a new relative low and we'll exit at $59.00. More aggressive traders could definitely aim lower but we do not want to hold over the May 24th earnings report.

Trigger @ 62.75

- Suggested Positions -

buy the Jun $60 put (TIF1216R60) current ask $1.74

Annotated Chart:

Entry on May xx at $ xx.xx
Earnings Date 05/24/12 (confirmed)
Average Daily Volume = 1.5 million
Listed on May 12, 2012