NEW DIRECTIONAL CALL PLAYS

EOG Resources - EOG - close: 126.10 change: +1.47

Stop Loss: 123.40
Target(s): 134.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The energy sector has been trending higher and EOG is helping lead the way. This stock has rallied to new multi-year highs and looks poised to breakout past short-term resistance near $126.00.

I am suggesting we use a trigger to buy calls at $126.30. If triggered we will aim for $134.00. More aggressive traders could aim for the all-time highs in the $140 area but we do not want to hold positions over the earnings report in February.

Trigger @ 126.30

- Suggested Positions -

buy the Feb $130 call (EOG1316B130) current ask $2.44

Annotated Chart:

Entry on January xx at $ xx.xx
Average Daily Volume = 1.4 million
Listed on January 10, 2012


iShares Russell 2000 (ETF) - IWM - close: 87.47 change: +0.20

Stop Loss: 85.90
Target(s): 94.50
Current Option Gain/Loss: Unopened
Time Frame: 6 to 9 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The small cap Russell 2000 index (and ETF) have been showing relative strength for weeks. The $RUT and the IWM have broken out to new all-time, record highs. If earnings season continues to deliver better than expected news we could see the small caps race higher.

Today's high was $87.69. I am suggesting a trigger to buy calls at $87.85. If triggered our multi-week target is $94.50.

Trigger @ 87.85

- Suggested Positions -

buy the Mar $90 call (IWM1316c90) current ask $1.37

Annotated Chart:

Entry on January xx at $ xx.xx
Average Daily Volume = 41.2 million
Listed on January 10, 2012


NEW DIRECTIONAL PUT PLAYS

Green Mtn Coffee Roasters - GMCR - close: 39.63 change: -0.17

Stop Loss: 41.20
Target(s): 35.25
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
It looks like the rally or more likely the short squeeze in shares of GMCR has run its course. The new high in early January looks like a bull trap. Shares have been underperforming the market. Now the stock looks ready to retrace its gains.

Today's low was $38.83. I am suggesting a trigger to buy puts at $38.45. If triggered our target is $35.25. More aggressive traders might want to aim for a drop near $31.00 instead.

NOTE: GMCR can be a volatile stock. We want to keep our position size small.

Trigger @ 38.45 *Small Positions*

- Suggested Positions -

buy the Feb $35 PUT (GMCR1316n35) current ask $2.14

Annotated Chart:

Entry on January xx at $ xx.xx
Average Daily Volume = 4.2 million
Listed on January 10, 2012