Editor's Note:

In addition to tonight's new candidate, consider these stocks as possible trading ideas and watch list candidates. Many of these need to see a break past key support or resistance:

(bullish ideas) CRS, SBS, PXD, MOS, ROSE, PM, UTX, FLS, IHS, BIDU


NEW DIRECTIONAL CALL PLAYS

Intl. Business Machines - IBM - close: 200.84 change: +2.44

Stop Loss: 197.40
Target(s): 209.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
IBM is one of the biggest I.T. firms on the planet. The company provides everything from hardware to software to services and more. The stock has been consolidating sideways under round-number resistance near $200 recently. Today's move looks like a bullish breakout past resistance.

I am suggesting we buy calls on this breakout (tomorrow morning) with a stop loss at $197.40. Our target is $209.00 since the $210 area has been prior resistance. FYI: The Point & Figure chart for IBM is bullish with a $226 target.

- Suggested Positions -

Buy the Sep $205 call (IBM1222i205) current ask $1.74

Annotated Chart:

Entry on August 17 at $ xx.xx
Average Daily Volume = 3.4 million
Listed on August 16, 2012


Joy Global, Inc. - JOY - close: 55.98 change: +1.51

Stop Loss: 52.75
Target(s): 59.75 & 62.40
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
JOY makes farming and mining equipment. Normally I would be wary of an economically sensitive stock like this with economic data suggesting a slowdown ahead. However, it seems that all the bad news has been priced in. JOY's drop from over $90 back in February to $48 a few weeks ago almost cut the stock in half. Now JOY is has broken out past is trend of lower highs and is retesting prior resistance at the 50-dma as new support. Essentially this new bounce this week looks like a bullish entry point.

I am suggesting positions tomorrow morning with a stop loss at 52.75. Our first target is $59.75. I am setting a secondary, more aggressive target at $62.40 but JOY will have to get past potential resistance at $60.00. FYI: The Point & Figure chart for JOY is bullish with a longer-term $74 target.

- Suggested Positions -

buy the Sep $57.50 call (JOY1222i57.5) current ask $2.43

- or -

buy the Oct $60.00 call (JOY1220j60) current ask $2.31

Annotated Chart:

Entry on August xx at $ xx.xx
Average Daily Volume = 2.1 million
Listed on August 16, 2012