NEW DIRECTIONAL CALL PLAYS

Anadarko Petroleum - APC - close: 65.37 change: +1.41

Stop Loss: 63.40
Target(s): 69.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
APC is an oil and natural gas producer. After a very painful three and a half month plunge, shares of APC have finally bounced near their 2011 lows. The stock has been consolidating under resistance near the $65.00 level these last few days.

We're going to hear more about the oil industry soon as we get closer to the July 1st EU oil embargo against buying Iranian oil. That could help put a bottom under oil prices.

APC's bullish breakout past $65.00 on Friday looks like a new entry point to buy calls. The high on Friday was $65.41. I am suggesting a trigger to buy calls at $65.55. We'll use a stop loss at $63.40. Our target is $69.75.

Trigger @ 65.55

- Suggested Positions -

buy the Jul $67.50 call (APC1221G67.5) current ask $2.08

Annotated Chart:

Entry on June xx at $ xx.xx
Earnings Date 07/23/12 (unconfirmed)
Average Daily Volume = 5.2 million
Listed on June 16, 2012


NEW DIRECTIONAL PUT PLAYS

Advance Auto Parts - AAP - close: 69.74 change: -0.92

Stop Loss: 71.05
Target(s): 65.25
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The big gap down on AAP's chart on May 17th is the reaction to the company's earnings report. Investors were not happy to hear that AAP missed both the earnings and revenue estimates. Many of the auto part stocks had been rising on the expectation that the U.S. consumer was keeping their car longer and thus spending more on maintenance and repair. Looks like they aren't spending as much as Wall Street thought.

The oversold bounce in AAP seems to have failed. Now the stock is breaking down under $70.00 again. The low on Friday was $69.39. I am suggesting a trigger to buy puts at $69.25. We'll aim for $65.25. More aggressive traders could aim lower. FYI: The Point & Figure chart for AAP is bearish with a $40 target.

Trigger @ 69.25

- Suggested Positions -

buy the Jul $65 PUT (AAP1221S65) current ask $1.10

Annotated Chart:

Entry on June xx at $ xx.xx
Earnings Date 08/08/12 (unconfirmed)
Average Daily Volume = 1.5 million
Listed on June 16, 2012