NEW DIRECTIONAL CALL PLAYS

Dresser-Rand Group - DRC - close: 50.96 change: +0.21

Stop Loss: 49.45
Target(s): 54.75
Current Option Gain/Loss: Unopened
Time Frame: exit prior to Sept. option expiration
New Positions: Yes, see below

Company Description

Why We Like It:
DRC is in the industrial goods sector. The company's recent earnings report in early August was a miss but traders bought the news thanks to growing profit margins. Now after almost two weeks of consolidating under resistance at the $50.00 level DRC has broken out. Traders bought the dip today with prior resistance at $50 acting as new support.

I am suggesting new bullish positions at the open tomorrow. We'll use a stop loss a $49.45. Our target is $54.75. FYI: The Point & Figure chart for DRC is bullish with a $58 target.

- Suggested Positions -

buy the Sep $50 call (DRC1222i50) current ask $2.25

Annotated Chart:

Entry on August xx at $ xx.xx
Average Daily Volume = 489 thousand
Listed on August 20, 2012