NEW DIRECTIONAL CALL PLAYS

L-3 Communications - LLL - close: 81.83 change: -0.57

Stop Loss: 79.90
Target(s): 84.85
Current Option Gain/Loss: Unopened
Time Frame: Exit prior to earnings on April 25th
New Positions: Yes, see below

Company Description

Why We Like It:
Many of the big defense contractor names are performing quite well in spite of the sequestration cuts. Shares of LLL hit new 52-week highs late last week. The stock was downgraded by JPM this morning but traders quickly bought the dip near $80.85.

I am suggesting we buy calls if LLL can trade at $82.50 or higher. More aggressive traders could just buy calls right now given today's intraday rebound. We will start with a stop loss at $79.90. Our short-term target is $84.85. However, we will plan on exiting positions prior to LLL's earnings report on April 25th.

NOTE: I am listing the May $85 calls. You could limit the impact of the bid/ask spread if you went with the May $80 calls instead.

Trigger @ 82.50

- Suggested Positions -

buy the May $85 call (LLL1318E85) current ask $0.55

Annotated Chart:

Entry on April -- at $---.--
Average Daily Volume = 600 thousand
Listed on April 08 2013