NEW DIRECTIONAL CALL PLAYS

Diageo Plc. - DEO - close: 115.13 change: +1.19

Stop Loss: 111.90
Target(s): 119.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
DEO is the U.K.-based producer for a wide number of spirits, beer, and wine. Shares have been channeling higher for months. DEO hit new record highs just a week ago. Today's bullish breakout above its 10-dma and the $115 level looks like a short-term bullish entry point.

I am suggesting small bullish positions at the open tomorrow. The stock tends to gap open each morning as shares here in the U.S. react to trade that started in Europe. Thus we want to limit our position size due to the volatility.

We'll use a stop loss at $111.90, just under the 30-dma. Our target is $119.75.

- Suggested *Small* Positions -

buy the NOV $115 call (DEO1217k115) current ask $2.40

Annotated Chart:

Entry on October xx at $ xx.xx
Average Daily Volume = 529 thousand
Listed on October 16, 2012