NEW DIRECTIONAL CALL PLAYS

Kimberly-Clark Corp. - KMB - close: 91.20 change: +1.01

Stop Loss: 89.25
Target(s): 94.75
Current Option Gain/Loss: Unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
KMB is in the consumer goods sector. The stock could be viewed as a "safe haven" trade since consumers continue to buy diapers and paper towels even in a bad economy. Plus, KMB currently has a 3.3% dividend yield. The last few weeks have seen the stock breakout from a significant, multi-month consolidation pattern. Now KMB is hitting new all-time highs.

I am suggesting new bullish positions now at the open on Monday morning. However, we do want to keep our position size small because the overall market's momentum seems to be slowing a bit. We'll start with a stop loss under last week's low. Our target is $94.75. More aggressive traders could aim higher.

- Suggested Positions -

buy the Mar $90 call (KMB1316c90) current ask $1.75

- or -

buy the Apr $92.50 call (KMB1320c92.5) current ask $1.00

Annotated Chart:

Weekly Chart:

Entry on February 18 at $---.--
Average Daily Volume = 2.2 million
Listed on February 16, 2012


NEW DIRECTIONAL PUT PLAYS

Alexion Pharma. - ALXN - close: 86.01 change: -1.62

Stop Loss: 87.55
Target(s): 80.25 and 76.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
ALXN is down on good news. The company reported earnings on Feb. 14th before the opening bell. Analysts were expecting a profit of 52 cents a share. ALXN delivered 60 cents with revenues surging +40% to $320.5 million for the quarter. Management even raised their 2013 guidance. The stock should have rallied on this bullish earnings report and guidance. Instead the initial pop was sold at the $95 level and the 50-dma on Thursday morning. Now ALXN has broken support at $90 and broken below its November lows near $86 when it bounced off its rising 300-dma.

The stock looks broken on both the daily and the weekly chart (see below). Aggressive traders could buy puts on ALXN now. Alternatively you could wait for a bounce and another failed rally near what should be new resistance at the $90.00 level. I am suggesting we wait for ALXN to trade below its Thursday afternoon low. Therefore we'll use a trigger to buy puts at $84.50. I am setting two targets. Our first target is $80.25. Our second, more aggressive target is $76.00.

Trigger @ 84.50

- Suggested Positions -

buy the Mar $80 PUT (ALXN1316o80) current ask $0.95

Annotated Chart:

Weekly Chart:

Entry on February -- at $---.--
Average Daily Volume = 2.2 million
Listed on February 16, 2012