NEW DIRECTIONAL CALL PLAYS

Nu Skin Enterprises. - NUS - close: 47.08 change: +1.47

Stop Loss: 45.45
Target(s): 54.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
A better than expected earnings report and strong growth numbers in Asia helped fuel a big short squeeze in NUS in late October. Shares spent last week consolidating sideways and completely ignoring the stock market's post-election sell-off.

Now shares of NUS look poised to rally. If the stock continues to climb it could spark another short squeeze. The most recent data listed short interest at 20% of the 50.7 million share float. Due to NUS' volatility I am suggesting we keep our position size small to limit our risk. We do not know what sort of headlines might emerge from NUS' annual investor day on November 14th (this Wednesday).

I am suggesting a trigger to buy calls at $47.60. FYI: The Point & Figure chart for NUS is bullish with a $65 target.

Trigger @ 47.60 *Small Positions*

- Suggested Positions -

buy the DEC $50 call (NUS1222L50) current ask $2.00

Annotated Chart:

Entry on November xx at $ xx.xx
Average Daily Volume = 1.2 million
Listed on November 12, 2012


NEW DIRECTIONAL PUT PLAYS

Mercadolibre - MELI - close: 75.06 change: -1.26

Stop Loss: 77.75
Target(s): 70.25
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
MELI is an Argentine company that offers an automated online commerce service. The big drop in early November was a reaction to a disappointing earnings report. Shares have now broken down through support near $80. The stock is now about to break support at $75.00.

I do consider this a higher-risk trade. MELI can be volatile and is arguably already oversold with a four-week decline. Of course stocks can always get more oversold. I am suggesting a trigger to launch small bearish positions at $74.75. Our target is $70.25.

Trigger @ 74.75

- Suggested *Small* Positions -

buy the DEC $72.50 PUT (MELI1222x72.5) current ask $2.60

Annotated Chart:

Entry on November xx at $ xx.xx
Average Daily Volume = 603 thousand
Listed on November 12, 2012