NEW DIRECTIONAL CALL PLAYS

Medivation, Inc. - MDVN - close: 98.02 change: +1.85

Stop Loss: 94.75
Target(s): 104.50
Current Option Gain/Loss: Unopened
Time Frame: exit prior to Sept. 24th and the 2-for-1 split
New Positions: Yes, see below

Company Description

Why We Like It:
MDVN is a biotech stock that is only a few points from its all-time high. Shares have been channeling higher with traders buying dips at the 50-dma pretty consistently. Yesterday, after the closing bell, MDVN announced a 2-for-1 stock split scheduled for September 24th.

We think this up trend continues but we want to see a little confirmation of this bounce. I am suggesting a trigger to buy calls at $98.50. More conservative traders may want to wait for a rally past $100.50 or $101.00 instead. Our target is $104.50 but given the trend of higher highs readers could aim higher. Keep in mind that we do not want to hold over the stock split.

I am listing the October puts because they have smaller spreads than the Septembers but we will exit prior to the stock split.

Trigger @ 98.50

- Suggested Positions -

buy the Oct $105 call (MDVN1220j105) current ask $3.80

Annotated Chart:

Entry on August xx at $ xx.xx
Average Daily Volume = 360 thousand
Listed on August 29, 2012


NEW DIRECTIONAL PUT PLAYS

Dril-Quip - DRQ - close: 68.96 change: -1.51

Stop Loss: 70.75
Target(s): 64.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Some of the oil service stocks continue to show relative weakness. DRQ reversed at resistance a few days ago. Now DRQ is breaking support at $70.00 and its 50-dma. We want to hop on board the new trend lower.

I am suggesting small bearish positions at the open tomorrow. We'll use a stop loss at $70.75 to start (that's just above today's high). Our target is $64.00. More aggressive traders could aim lower.

- Suggested *Small* Positions -

buy the Sep $70 PUT (DRQ1222u70) current ask $2.95

Annotated Chart:

Entry on August xx at $ xx.xx
Average Daily Volume = 425 thousand
Listed on August 29, 2012