NEW DIRECTIONAL CALL PLAYS

Lumber Liquidators - LL - close: 83.90 change: +2.00

Stop Loss: 79.45
Target(s): 89.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
That big surge higher you see in LL's chart was a reaction to the company's earnings report. LL beat estimates by 15 cents and beat the revenue estimate as well. Same-store sales were very strong. LLL had a lot of short interest prior to the report and the good news sparked a short squeeze. The most recent data listed short interest at 27% of the small 26.2 million share float but that number may be out of date.

There wasn't much profit taking last week and traders quickly bought the dip. Now shares of LL are hitting new all-time highs. The intraday high today was $83.91. I am suggesting a trigger to buy calls at $84.10. If triggered our short-term target is $89.50. I would keep our position size small to limit our risk.

Trigger @ 84.10 *Small Positions*

- Suggested Positions -

buy the Jun $85 call (LL1322F85) current ask $3.70

Annotated Chart:

Entry on May -- at $---.--
Average Daily Volume = 761 thousand
Listed on May 06 2013


NEW DIRECTIONAL PUT PLAYS

Expedia Inc. - EXPE - close: 58.29 change: -0.71

Stop Loss: 60.25
Target(s): 1st target: 55.10, 2nd target 53.00
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
EXPE is an online travel company. The company reported earnings on April 25th. Investors were unhappy with the better than expected results. Cautious guidance and concerns over rising costs and growing competition sparked a sell-off. EXPE was already looking vulnerable prior to the earnings report. The post-earnings drop created a breakdown below multiple levels of support. Now the oversold bounce is reversing near its 200-dma.

This looks like a spot to buy puts for a resumption of the down trend. I am suggesting bearish positions now. We'll use a stop loss at $60.25. Please note I am listing two targets. Our conservative target is $55.10 since the $55 level has been support in the past. Our more aggressive target is $53.00. You choose which target you want to exit at. FYI: The Point & Figure chart for EXPE is bearish with a $55 target.

- Suggested Positions -

buy the Jun $55 PUT (EXPE1322R55) current ask $1.50

Annotated Chart:

Entry on May 07 at $---.--
Average Daily Volume = 2.9 million
Listed on May 06 2013