NEW DIRECTIONAL CALL PLAYS

Armstrong World Industries - AWI - close: 49.35 change: +0.71

Stop Loss: 49.25
Target(s): 54.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
AWI is in the industrial good sector. The stock is bouncing after a painful November correction lower. Now shares are poised to breakout past $50.00 again. Shares could see another short squeeze. The most recent data listed short interest at 20% of the small 26.4 million share float.

I am suggesting a trigger to buy calls at $50.25. If triggered our target is $54.50.

Trigger @ 50.25

- Suggested Positions -

buy the DEC $50 call (AWI1222L50) current ask $1.35

Annotated Chart:

Entry on November xx at $ xx.xx
Average Daily Volume = 685 thousand
Listed on November 20, 2012


NEW DIRECTIONAL PUT PLAYS

InterOil Corp. - IOC - close: 59.99 change: -1.49

Stop Loss: 61.05
Target(s): 50.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 5 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
I am honestly surprised that shares of IOC did not see a bigger bounce on Friday last week or yesterday. There appears to be significant short interest in the stock. The most recent data listed short interest at almost 22% of the small 41.4 million share float. Yet the bounce has failed at resistance near $65.00 and its 20-dma. Now IOC looks poised to continues its bearish trend and breakdown to new lows.

The low on Nov. 19th was $58.74. I am suggesting a trigger to buy puts at $58.50. If triggered our target is $50.50. I would keep our position size small to limit risk. IOC can see some wide intraday swings.

Trigger @ 58.50 *Small positions*

- Suggested Positions -

buy the DEC $55 PUT (IOC1222x55) current ask $2.24

Annotated Chart:

Entry on November xx at $ xx.xx
Average Daily Volume = 790 thousand
Listed on November 20, 2012