Editor's Note:

Tonight we have some exciting news. The Option Investor Newsletter is going to expand its play selection. In recent years the newsletter has been publishing more short-term trades. Option traders benefit from being nimble and jumping in or jumping out of a trade to both to protect their capital and capture gains. Yet the wonderful thing about using options is the numerous ways investors can alter their strategy.

We already produce strategy-focused newsletters that cater to more advanced investing like the Option Writers newsletter, the Monthly Cash Machine newsletter, the Couch Potato newsletter. Plus we have long(er)-term investments with the LEAPStrader newsletter and Ultimate Investor. You can read more about these services by clicking here.

The Option Investor Newsletter is going to start adding trades with a longer time frame. In addition to technical analysis we will be including stocks with more fundamental stories behind their moves. Of course finding the right candidate that fits a longer-term entry will be more challenging. We scour the market every week for new ideas but sometimes a stock needs to ripen before it is ready for a trade. Thus this new category of trade will only be published when we've found a promising candidate.

We look forward to adding more content for our amazing readers and providing more choices for active investors.



NEW DIRECTIONAL CALL PLAYS

Clorox Co. - CLX - close: 89.53 change: +0.69

Stop Loss: 87.95
Target(s): 94.00
Current Option Gain/Loss: Unopened
Time Frame: exit PRIOR to earnings on May 1st
New Positions: Yes, see below

Company Description

Why We Like It:
Clorox might be considered a more defensive name. Consumers continue to buy bleach and detergent even if the economy is in a recession. Given the stock's 2.9% yield CLX looks a lot more attractive than the bond market. Investors have been buying the dips for months. Currently CLX is testing round-number resistance at the $90.00 level. These are new all-time, historic highs for the stock. It's an old market maxim that stocks which hit $90 also tend to hit $100 a share.

Unfortunately this is going to be a short-term trade. We may not have time for CLX to make it to $100. The company is due to report earnings on May 1st and we do not want to hold over the announcement. There is too much risk that investors could sell the news after CLX's impressive rally.

Friday's high was $90.10. I am suggesting a trigger to buy calls at $90.25. If triggered our short-term target is $94.00.

NOTE: CLX will begin trading ex-dividend on Monday morning, April 22nd. The quarterly cash dividend is 64 cents a share. Odds are good we'll see CLX gap down by 64 cents on Monday.

Trigger @ 90.25

- Suggested Positions -

buy the May $90 call (CLX1318E90) current ask $1.35

Annotated Chart:

Entry on April -- at $---.--
Average Daily Volume = 738 thousand
Listed on April 20 2013


NEW DIRECTIONAL PUT PLAYS

SINA Corp. - SINA - close: 46.26 change: -0.28

Stop Loss: 48.25
Target(s): 42.00
Current Option Gain/Loss: Unopened
Time Frame: exit PRIOR to earnings in mid-May
New Positions: Yes, see below

Company Description

Why We Like It:
SINA is a Chinese Internet-related company with online advertising, web portals and more like its Chinese version of Twitter. Although there seems to be a growing chorus of critics claiming that SINA's "Weibo" service is not Twitter. The stock seems to be suffering from investor concerns over rising competition.

Traders have been selling into strength recently and now shares of SINA are breaking down to new multi-month lows. I am suggesting we buy puts immediately at the open on Monday morning. More conservative traders might want to wait for a drop below the April 16th low of $45.68 as an alternative entry point. Our short-term target is $42.00, just above the December 2012 lows.

Investors should be aware that SINA's stock could be influenced by earnings results from its rivals. BIDU is scheduled to report earnings on April 25th. SOHU is due on April 29th. NTES should report earnings in mid-May.

- Suggested Positions -

buy the May $45 PUT (SINA1318Q45) current ask $2.23

Annotated Chart:

Entry on April -- at $---.--
Average Daily Volume = 1.7 million
Listed on April 20 2013



NEW LONGER-TERM TRADES

Chicago Bridge & Iron Co. - CBI - close: 51.38 change: +0.46

Stop Loss: 49.25
Target(s): 62.50
Current Option Gain/Loss: July's: +0.0% or Jan's: +0.0%
Time Frame: 3 to 4 months
New Positions: see below

Company Description

Why We Like It:
CB&I, as the company likes to call itself, is one of the world's largest construction companies. According to their website CBI is the "most complete provider of a wide range of services including design, engineering, construction, fabrication, maintenance, and environmental services, no project is too big for CB&I." They have graduated from building bridges over one hundred years ago to present day where they build oil refineries, LNG terminals, and nuclear power plants and a lot more. CBI is the largest storage tank construction company on the planet.

Last year the company spent $3 billion to acquire (merge) with the Shaw Group. This doubled their employee count and gave CBI a much bigger presence in the U.S. It also produced a dramatic improvement in its revenues and earnings. CBI recently held an investor day and issued 2013 guidance of the newly combined company (CBI and Shaw) forecasting revenues of $10.7 to $11.2 billion. CBI guided 2013 earnings in the $4.00-4.35 range. According to Reuters the average analyst estimate was only $4.00. Currently CBI has a trailing P/E near 17 but based on its new EPS guidance the forward P/E is closer to 11.

More importantly the company seems to be in the right place and at the right time as far as global infrastructure development. Current estimates suggest countries and businesses around the world plan on spending more than $1 trillion (with a T) on energy infrastructure projects. Right now CBI's revenues are only $11 billion (current 2013 forecast) but they have a backlog of $27 billion. This is likely to grow.

Given all of this good news the stock was marching higher from mid-November 2012 up until March this year. CBI started to pullback in early April. That pullback accelerated about two weeks ago, around April 11th, on news that one of its customers in Australia, Woodside Petroleum, was canceling its $45 billion onshore LNG project and is considering a offshore development instead.

We think the correction is done. The pullback from its 2013 high (near $62) stalled near round-number support at $50.00 and its 100-dma. Coincidentally a dip from $62 to $50 is a -20% correction. I suspect that the reversal near $62 was also some profit taking since CBI was nearing its all-time highs from back in 2007 near $63 a share. We are not the only ones who believe the sell-off is overdone. There has been a significant surge in call buying on CBI's pullback.

We are suggesting new bullish positions now at current levels. We will start with a stop loss at $49.25. More conservative traders could wait for a little confirmation of the bounce and look for a rally past $52.50 as an alternative entry point (you could also tighten your stop closer to $50.00). Our time frame is three to four months. This means that we will be holding over CBI's May 2nd earnings report. By the way, Wall Street is expecting a profit of 79 cents a share.

Our long-term target is $62.50.

- Suggested Positions -

buy the 2013 Jul $55 call (CBI1320G55) current ask $2.15

- or -

buy the 2014 Jan $60 call (CBI1418A60) current ask $2.85

Annotated Chart:

Entry on April 22 at $---.--
Average Daily Volume = 2.5 million
Listed on April 20 2013