NEW DIRECTIONAL CALL PLAYS

Flowserve Corp. - FLS - close: 140.90 change: +2.30

Stop Loss: 138.90
Target(s): 148.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Shares of FLS recovered quickly from their November lows. Yet the rally stalled at resistance in the $140-141 area. Now the stock looks poised to breakout past this level.

Today's high was $141.29. I am suggesting a trigger to buy calls at $141.50. If triggered our target is $148.50. FYI: The Point & Figure chart for FLS is bullish with a $153 target.

Trigger @ 141.50

- Suggested Positions -

buy the 2013 Jan $145 call (FLS1319a145) current ask $2.65

Annotated Chart:

Entry on December xx at $ xx.xx
Average Daily Volume = 518 thousand
Listed on December 04, 2012


NEW DIRECTIONAL PUT PLAYS

Range Resources - RRC - close: 63.21 change: -0.82

Stop Loss: 66.05
Target(s): 56.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
A sell-off in natural gas prices is not helping shares of RRC. The stock has reversed sharply. The recent weakness has produced a breakdown below support near $64.00 and several key moving averages. The $60.00 level might offer some round-number support but real support looks like it's down in the $55 area.

I do consider this an aggressive, higher-risk trade. RRC can be volatile and there has been takeover chatter in the past. We want to keep our position size small to limit our risk. I am suggesting small put positions now at current levels with a stop loss at $66.05. Our target is $56.50.

- Suggested *Small* Positions -

buy the 2013 Jan $60 PUT (RRC1319m60) current ask $1.50

Annotated Chart:

Entry on December xx at $ xx.xx
Average Daily Volume = 1.5 million
Listed on December 04, 2012