Editor's Note:

In addition to tonight's new candidate(s), consider these stocks as possible trading ideas and watch list candidates. Many of these need to see a break past key support or resistance:

(bullish ideas) CHE, PII, LL, SNI, TWX, BDX, NBL, ANSS

(bearish ideas) FIRE, WCG, MNST,



NEW DIRECTIONAL CALL PLAYS

Sherwin-Williams Company - SHW - close: 160.96 change: +2.47

Stop Loss: 154.65
Target(s): 169.00
Current Option Gain/Loss: Unopened
Time Frame: Exit prior to earnings on Jan. 31st!
New Positions: Yes, see below

Company Description

Why We Like It:
SHW continues its winning ways with a +1.5% gain. Shares have been outperforming the market for months. This may be due to the perception that the housing industry is improving and finally found solid footing. SHW's current long-term up trend is sending it to new all-time, record highs.

I am suggesting we keep our position size small to limit our risk. Plus, this is a shorter-term trade. We do not want to hold over the January 31st earnings report.

I am suggesting small bullish positions at the open tomorrow. We'll use a stop loss at $154.65. More conservative traders might want to try a higher stop loss. Our exit target is $169.00. FYI: The Point & Figure chart for SHW is bullish with a $196 target.

- Suggested Positions - *Small Positions*

buy the Feb $165 call (SHW1316B165) current ask $3.20

Annotated Chart:

Entry on January xx at $ xx.xx
Average Daily Volume = 928 thousand
Listed on January 08, 2012


NEW DIRECTIONAL PUT PLAYS

Humana Inc. - HUM - close: 66.01 change: -1.27

Stop Loss: 69.01
Target(s): 62.00
Current Option Gain/Loss: Unopened
Time Frame: Exit prior to earnings on Feb. 4th!
New Positions: Yes, see below

Company Description

Why We Like It:
It's been a choppy ride but the trend for the healthcare sector has been up over the last several months. Not so for shares of HUM. The trouble began in early November when HUM announced earnings. The company actually beat estimates by a wide margin, revenues were a miss and HUM lowered its 2013 guidance. They also announced an acquisition of Metropolitan Health Networks.

The trouble lies with HUM's downgraded 2013 guidance. Since then the stock has been underperforming. The January 2nd market rally produced a short-term pop that investors quickly sold. There is potential short-term support at $66 and $64 but we are targeting a drop toward the $62-60 zone.

I am suggesting new bearish positions at the open tomorrow. More conservative traders could wait for decline under $65.75 as their entry point instead. Our target is $62.00. FYI: The Point & Figure chart for HUM is bearish with a $51 target.

- Suggested Positions -

buy the Feb $65 PUT (HUM1316N65) current ask $1.75

Annotated Chart:

Entry on January xx at $ xx.xx
Average Daily Volume = 1.5 million
Listed on January 08, 2012