NEW DIRECTIONAL CALL PLAYS

3M Company - MMM - close: 101.49 change: +0.72

Stop Loss: 100.70
Target(s): 106.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
MMM has delivered a very impressive rally over the last five weeks. The stock has pushed through round-number resistance at $100 and hit new all-time record highs. By all accounts MMM's stock is overbought yet the rally remains intact. The last few days have seen MMM hover near new resistance at the $102.00 level. We think the stock will breakout soon especially following the company's press release after the closing bell tonight.

MMM's board of directors has raised its quarterly cash dividend by +8% to 63.5 cents a share. This dividend is payable on March 12th, 2013 to shareholders of record on Feb. 15th. Plus, the board has authorized a stock buyback program of $7.5 billion to replace its prior program.

I am suggesting a trigger to buy calls at $102.25. There is a chance that MMM might gap open higher following the press release tonight. You may want to wait on launching positions if MMM gaps open too high. I am suggesting we keep our position size small to limit our risk. I am placing the stop loss at $100.70, just below its rising 10-dma.

Trigger @ 102.25 *small positions*

- Suggested Positions -

buy the Mar $100 call (MMM1316c100) current ask $2.44

Annotated Chart:

Entry on February -- at $---.--
Average Daily Volume = 3.0 million
Listed on February 05, 2012


NEW DIRECTIONAL PUT PLAYS

SourceFire, Inc. - FIRE - close: 41.19 change: -0.56

Stop Loss: 41.55
Target(s): 35.25
Current Option Gain/Loss: Unopened
Time Frame: exit prior to earnings on Feb. 21
New Positions: Yes, see below

Company Description

Why We Like It:
FIRE is a network security and software company. The stock has been sinking under a trend of lower highs since the peak last summer. Now FIRE is nearing support near $40.00. A breakdown at $40.00 could spark the next leg lower. The January 30th low was $39.51. I am suggesting a trigger to open small bearish put positions at $39.40. If triggered our target is $35.25. We do not want to hold over the earnings report on Feb. 21st.

Trigger @ 39.40 *Small Positions*

- Suggested Positions -

buy the Mar $35 PUT (FIRE1316o35) current ask $1.15

Annotated Chart:

Entry on February -- at $---.--
Average Daily Volume = 890 thousand
Listed on February 05, 2012