NEW DIRECTIONAL CALL PLAYS

EV Energy Partners - EVEP - close: 65.41 change: -0.24

Stop Loss: 63.95
Target(s): 69.85
Current Option Gain/Loss: Unopened
Time Frame: exit prior to the Nov. 8th earnings report (not yet confirmed)
New Positions: Yes, see below

Company Description

Why We Like It:
Energy stock EVEP has done a decent job of ignoring the market's recent weakness. This stock has been consolidating sideways while still maintaining a larger bullish trend of higher lows. Now EVEP looks poised to breakout past resistance.

The October 11th high was $66.08. I am suggesting a trigger to buy calls at $66.25. If triggered our short-term target is $69.85. FYI: The Point & Figure chart for EVEP is bullish with an $83 target.

Trigger @ 66.25

- Suggested Positions -

buy the NOV $65 call (EVEP1217k65) current ask $2.70

Annotated Chart:

Entry on October xx at $ xx.xx
Average Daily Volume = 111 thousand
Listed on October 27, 2012


iShares Russell 2000 - IWM - close: 81.14 change: -0.39

Stop Loss: 81.45
Target(s): 86.00
Current Option Gain/Loss: Unopened
Time Frame: several weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The stock market's intermediate trend is clearly down. The market has been falling for about six weeks. After a parade of disappointing earnings reports and corporate guidance it is understandable that investors would be in a selling mood. However, the market's decline has been slowing. The S&P 500 and the Russell 2000 indices have been hovering just above support. You could start to argue that all the disappointing earnings news has been priced in. If that's true then stocks could be poised for an oversold bounce.

The Russell 2000 index and its IWM ETF are testing a trend line of support as well as technical support at its 100-dma (and near its 200-dma). I am suggesting we buy calls if the IWM bounces. Thursday's high was $82.14. I am suggesting a trigger to buy calls at $82.25. We'll use a stop loss at $81.45. Our multi-week target is $86.00.

Trigger @ 82.25

- Suggested Positions -

buy the 2013 Jan $85 call (IWM1319a85) current ask $1.20

Annotated Chart:

Annotated Chart:

Entry on October xx at $ xx.xx
Average Daily Volume = 35 million
Listed on October 27, 2012