NEW DIRECTIONAL CALL PLAYS

Flowserve Corp. - FLS - close: 134.81 change: +2.78

Stop Loss: 129.75
Target(s): 139.50
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
FLS is an industrial goods company. Shares hit new 52-week highs on Friday with a +2.1% gain. After a week of moving sideways the stock looks poised to run further. However, we'd like to try and buy a dip. I am suggesting a buy-the-dip entry point at $132.25. We'll use a stop loss at $129.75. There is potential resistance in the $135 area but we are aiming for $139.50. The Point & Figure chart for FLS is bullish with a $151 target.

buy-the-dip trigger @ 132.25

- Suggested Positions -

buy the Oct $135 call (FLS1220j135) current ask $3.60

Annotated Chart:

Entry on September xx at $ xx.xx
Average Daily Volume = 521 thousand
Listed on September 15, 2012


Sherwin-Williams - SHW - close: 146.22 change: +0.53

Stop Loss: 141.35
Target(s): 149.75
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
SHW is another industrial goods stock. Shares have been consolidating sideways in the $142-144.50 are for three weeks. This past week saw a bullish breakout to new all-time highs. Aggressive traders may want to buy calls now. I am suggesting we wait for a pullback. We'll use a buy-the-dip trigger at $144.75 and a stop loss at $141.35 Our initial target is $149.75. FYI: The Point & Figure chart for SHW is bullish with a long-term $192 target.

Trigger @ 144.75

- Suggested Positions -

buy the Oct $150 call (SHW1220j150) current ask $1.85

Annotated Chart:

Entry on September xx at $ xx.xx
Average Daily Volume = 814 thousand
Listed on September 15, 2012


The Ultimate Software Group - ULTI - close: 100.41 change: +2.33

Stop Loss: 97.45
Target(s): 106.00 or 109.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Shares of this software stock have been channeling higher for months. ULTI just bounced near a trend line of higher lows (a.k.a. support). This looks like an entry point but I want to see a little more confirmation. I am suggesting a trigger to buy calls at $100.75. We'll use a stop loss at $97.45, which is just under Thursday's low. I am setting two different targets. Our conservative target is $106.00. Our aggressive target is $109.50.

Trigger @ $100.75

- Suggested Positions -

buy the Oct $105 call (ULTI1220j105) current ask $2.20

Annotated Chart:

Entry on September xx at $ xx.xx
Average Daily Volume = 169 thousand
Listed on September 15, 2012