NEW DIRECTIONAL CALL PLAYS

Starbucks Corp. - SBUX - close: 65.22 change: -1.19

Stop Loss: 61.85
Target(s): 69.50
Current Option Gain/Loss: Unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
We want to use the market pullback to our advantage. SBUX has been a strong performer this year hitting new record highs just yesterday morning. Traders have a habit of buying dips at the 30-dma. Tonight we're suggesting buying calls on a dip at $64.25. If triggered we'll use a stop loss at $61.85. Our multi-week target is $69.50.

Buy-the-dip Trigger @ 64.25

- Suggested Positions -

Buy the Jul $65 call (SBUX1320G65) current ask $1.86

- or -

Buy the Aug $65 call (SBUX1317H65) current ask $2.81

Annotated Chart:

Entry on June -- at $---.--
Average Daily Volume = 4.6 million
Listed on June 20, 2013


S&P500 SPDR ETF - SPY - close: 159.40 change: -4.05

Stop Loss: 154.90
Target(s): 168.00
Current Option Gain/Loss: Unopened
Time Frame: 6 to 9 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The stock market's sell-off accelerated today. From the closing high the SPY is only down -4.5%. From the intraday high the SPY is down about -6%. Today's breakdown below technical support at the 50-dma is bearish. However, the SPY has not yet broken its multi-month trend line of higher lows (see the dotted line on the chart). We suspect traders could use that level as a new entry point.

Tonight we're suggesting a buy-the-dip trigger to buy calls on the SPY at $158.00. We'll start with a wide stop loss at $154.90. More conservative traders may want to use a much tighter stop but I would keep it under the 100-dma (currently 157.80). I'm setting a multi-week target at $168.00 but we will adjust it as needed.

Buy-the-Dip Trigger @ $158.00

- Suggested Positions -

Buy the Aug $162 call (SPY1317H162) current ask $2.85

Annotated Chart:

Entry on June -- at $---.--
Average Daily Volume = 162 million
Listed on June 20, 2013