NEW DIRECTIONAL CALL PLAYS

Sohu.com - SOHU - close: 44.62 change: +1.15

Stop Loss: 42.95
Target(s): 49.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The Chinese market has been showing strength in recent weeks. This has helped shares of Chinese Internet stock SOHU break through a number of resistance levels. Now after about a week of consolidating sideways and digesting gains SOHU is showing strength again.

SOHU can be a volatile stock so we want to limit our position size to reduce our risk. Today's high was $45.10. I am suggesting a trigger to buy calls at $45.20. If triggered our target is $49.75. More aggressive traders may want to aim higher since SOHU seems to have built a decent bottom over the last several months. With enough time you could aim for the $55-60 zone. FYI: The Point & Figure chart for SOHU is bullish with a $66 target.

Trigger @ 45.20

- Suggested Positions -

buy the Feb $47.50 call (SOHU1316b47.5) current ask $1.85

Annotated Chart:

Weekly Chart:

Entry on December xx at $ xx.xx
Average Daily Volume = 606 thousand
Listed on December 26, 2012


NEW DIRECTIONAL PUT PLAYS

Tiffany & Co - TIF - close: 56.68 change: -1.64

Stop Loss: 58.75
Target(s): 52.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Alarm bells were going off in the retail sector after MasterCard said their SpendingPulse report only showed retail sales rising +0.7% over last year compared to estimates of +3% to +4%. That immediately sent retail stocks lower and TIF plunged to a -2.8% loss and a new relative low. The stock was already in a bearish trend of lower highs and lower lows. We think momentum continues lower.

I am suggesting new bearish positions now with a stop loss at $58.75. Our target is $52.00.

- Suggested Positions -

buy the 2013Jan $55 PUT (TIF1319m55) current ask $1.08

Annotated Chart:

Entry on December xx at $ xx.xx
Average Daily Volume = 2.4 million
Listed on December 26, 2012