NEW DIRECTIONAL CALL PLAYS

Monsanto Co - MON - close: 107.10 change: +1.45

Stop Loss: 104.95
Target(s): 114.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
MON is a giant in the agricultural chemicals industry. Their recent earnings report was better than expected and management raised their 2013 guidance. The stock has garnered a couple of new higher price targets in recent days. Shares have been consolidating sideways in the $103-107 zone most of April but now MON looks poised to breakout.

There seems to be short-term resistance near $107.25. I am suggesting a trigger to buy calls at $107.50. If triggered our target is $114.00.

Trigger @ 107.50

- Suggested Positions -

buy the May $110 call (MON1318E110) current ask $1.42

Annotated Chart:

Entry on April -- at $---.--
Average Daily Volume = 2.8 million
Listed on April 11 2013


Western Digital Corp. - WDC - close: 52.39 change: -0.82

Stop Loss: 50.90
Target(s): 57.50
Current Option Gain/Loss: Unopened
Time Frame: Exit PRIOR to earnings on April 24
New Positions: Yes, see below

Company Description

Why We Like It:
The tech sector had a rough day. The semiconductor sector was downgraded. Meanwhile anything related to PC was hurt following an IDC report showing a -13.9% drop in worldwide PC shipments in the first quarter. A drop in PC sales is not surprising given the growth of the tablet market. Many were blaming Microsoft's new Windows 8 operating system as a stumbling block to computer sales. Yet if this news was so bad then why were traders buying the dip in WDC today?

The stock had rallied to new 15-year highs yesterday. The intraday bounce today could be an entry point. I am suggesting we buy calls at the opening bell tomorrow. However, traders should consider this a more aggressive, higher-risk trade. Earnings are coming up on April 24th and we do not want to hold over the announcement. Furthermore, WDC's all-time high was set in the $54.50-54.75 zone way back in 1997. Thus the $54.50-55.00 area could be resistance.

We'll launch positions tomorrow and try and reduce our risk by keeping position size small and using a stop loss at $50.90. FYI: The Point & Figure chart for WDC is bullish with an $82 target.

*Small Positions*

- Suggested Positions -

buy the May $55 call (WDC1318E55) current ask $1.91

Annotated Chart:

Entry on April -- at $---.--
Average Daily Volume = 2.4 million
Listed on April 11 2013