NEW DIRECTIONAL CALL PLAYS

Whole Foods Market - WFM - close: 93.17 change: +0.75

Stop Loss: 91.40
Target(s): 99.50
Current Option Gain/Loss: Unopened
Time Frame: Exit PRIOR to earnings on Feb. 13th
New Positions: Yes, see below

Company Description

Why We Like It:
WFM is a high-end grocery chain. The stock has been correcting lower since its peak in October last year. However, traders bought the "dip" when WFM neared a long-term trend line of higher lows (see weekly chart below). Now the stock has broken higher above a three-month trend line of resistance (see daily chart).

I still see potential resistance in the $93.50-94.00 zone, along with the 100-dma and 150-dma both near $94.00. Therefore I am suggesting we wait and use a trigger to buy calls at $94.25. If triggered our target is $99.50. We do not want to hold over the Feb. 13th earnings report.

NOTE: because of a previous dividend the option strike for February is an odd one (95.50)

Trigger @ 94.25

- Suggested Positions -

buy the Feb $95.50 call (WFM1316B95.5) current ask $1.61

Annotated Chart:

Weekly Chart:

Entry on January -- at $---.--
Average Daily Volume = 1.5 million
Listed on January 23, 2012