NEW DIRECTIONAL CALL PLAYS

Wal-Mart Stores Inc. - WMT - close: 68.52 change: +0.71

Stop Loss: 67.40
Target(s): 72.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The fallout over WMT's bribery scandal in Mexico was short lived. The stock has been showing plenty of relative strength over the last few weeks. Over the last few days WMT has been digesting its gains in a sideways consolidation.

It looks like that consolidation is ending with WMT breaking out to new multi-year highs today. Make no mistake, WMT looks overbought here but the trend is up and traders have been buying the dips. The 1999 high near $70.00 could be resistance. I wouldn't be surprised to see WMT run to $70 and pause or pull back toward $68 again. We are aiming higher and targeting $72.00. FYI: The Point & Figure chart for WMT is bullish with a long-term $91 target.

Use a trigger to buy calls at $68.65. We'll use a stop loss at $67.40

Trigger @ 68.65

- Suggested Positions -

buy the Jul $70 call (WMT1221G70) current ask $0.44

- or -

buy the Aug $70 call (WMT1218H70) current ask $0.91

Annotated Chart:

Entry on June xx at $ xx.xx
Earnings Date 08/16/12 (unconfirmed)
Average Daily Volume = 11.7 million
Listed on June 20, 2012


NEW DIRECTIONAL PUT PLAYS

Deckers Outdoor Corp. - DECK - close: 47.11 change: -0.90

Stop Loss: 50.05
Target(s): 42.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
DECK is a shoemaker. Unfortunately for shareholders the stock has been underperforming the market for months. The long-term trend has turned bearish with a pattern of lower highs and lower lows.

DECK's recent breakdown under key support at $50.00 is very bearish and could signal a drop toward the $40 area. I want to warn you that traders should consider this an aggressive trade because so many investors are already short this stock. The most recent data listed short interest at 26% of the small 36.7 million share float. That does raise the risk of a short squeeze, although DECK hasn't seen a squeeze in a while.

I am suggesting small bearish positions at the open tomorrow. We will start with a stop loss at $50.05. Our target is $42.00. FYI: The Point & Figure chart for DECK is bearish with a $34 target.

- Suggested Positions -

buy the Jul $45 PUT (DECK1221S45) current ask $1.40

- or -

buy the Aug $45 PUT (DECK1218T45) current ask $2.95

Annotated Chart:

Entry on June xx at $ xx.xx
Earnings Date 07/26/12 (unconfirmed)
Average Daily Volume = 1.45 million
Listed on June 20, 2012