NEW DIRECTIONAL CALL PLAYS

Express Scripts - ESRX - close: 61.58 change: +0.87

Stop Loss: 59.75
Target(s): 67.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The big two-day rally in early August was investor reaction to a bullish earnings report from ESRX. Management raised their 2012 guidance. Since then ESRX has been digesting its gains but now the consolidation appears to be over. Traders just bought the dip near round-number support at $60 a couple of days ago.

We are suggesting new bullish positions at the open tomorrow with a stop loss at $59.75. Our target is $67.50. FYI: The Point & Figure chart for ESRX is bullish with a $76 target.

- Suggested Positions -

Buy the Sep $62.50 call (ESRX1222i62.5) current ask $1.00

- or -

buy the Oct $62.50 call (ESRX1220j62.5) current ask $1.76

Annotated Chart:

Entry on August xx at $ xx.xx
Average Daily Volume = 5.1 million
Listed on August 23, 2012


NEW DIRECTIONAL PUT PLAYS

Weight Watchers Intl. - WTW - close: 48.33 change: -0.76

Stop Loss: 50.55
Target(s): 42.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
WTW plunged back in early August after the company issued an earnings warning with its Q2 earnings announcement. Shares have managed a sharp bounce back but now WTW is reversing at resistance near $50 and its 50-dma. The stock looks poised to resume the longer-term downtrend.

We are suggesting buying put options at the open tomorrow with a stop loss at $50.55. Our target is $42.50.

- Suggested Positions -

buy the Sep $47.50 PUT (WTW1222u47.5) current ask $1.70

- or -

buy the Oct $45.00 PUT (WTW1220V45) current ask $1.80

Annotated Chart:

Entry on August xx at $ xx.xx
Average Daily Volume = 929 thousand
Listed on August 23, 2012