Editor's Note:

Traders should be cautious here. Friday's breakout in the S&P 500 index past its 50-dma is technically bullish. Yet it was done on a very low-volume, post-holiday session. Furthermore the S&P 500 remains below the six-week trend of lower highs (from its May peak) and below its multi-month trend line of higher lows that it broke on June 20th.

Essentially, I am very concerned that the S&P 500's bounce has been just that, nothing more than a bounce and it could kiss these overhead trend lines of resistance and reverse sharply lower. Seeing the S&P 500 stall right at the convergence of two different trend lines of resistance does not inspire confidence in the market even though stocks were up on Friday.

What I'm trying to communicate is you don't have to trade every day. We are publishing new trade set ups tonight because the market might continue to climb. A breakout higher could spark some short covering. Yet sometimes the better trade might be to just step back and watch the market for a couple of more days.



NEW DIRECTIONAL CALL PLAYS

The Boeing Co. - BA - close: 104.20 change: +1.31

Stop Loss: 102.45
Target(s): 107.00
Current Option Gain/Loss: Unopened
Time Frame: Exit prior to option expiration on July 19th
New Positions: Yes, see below

Company Description

Why We Like It:
The defense industry stocks have been showing relative strength and BA is no exception. The stock ended the week near multi-year highs. Odds are good we're gong to see BA breakout past its June 2013 highs and rallied toward its 2007 highs near $107.00.

This should be a very short-term trade. I am suggesting a trigger to buy calls at $104.35. If triggered our short-term target is $107.00. More aggressive traders could definitely aim higher but I am expecting the $107.00-107.50 zone to be resistance. Since this is a short-term trade I'm using the July calls that only have two weeks left. If you are going to aim higher I would suggest a different month.

NOTE: You might see BA's name in the headlines this weekend. On Saturday a Boeing 777 model plane with Asiana Airlines, Flight 214m flying from Seoul, S. Korea, crash-landed at the San Francisco airport. Initial accounts report two dead and between 65 to 100 people injured but most of the injuries were minor and most people were walking away from the crash. I am not expecting this event to have any impact on BA's stock price. Thus far there has been no mention of what caused the crash.

Trigger @ 104.35 *small positions, short-term trade*

- Suggested Positions -

Buy the Jul $105 call (BA1320G105) current ask $0.88

Annotated Chart:

Entry on July -- at $---.--
Average Daily Volume = 4.7 million
Listed on July 06, 2013


Flowserve Corp. - FLS - close: 55.36 change: +1.16

Stop Loss: 53.95
Target(s): 59.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
FLS is in the industrial goods sector. The stock recently had a 3-for-1 stock split in late June. Since then shares have rebounded and this past week has produced a bullish breakout past multiple levels of resistance.

Friday's high was $55.41. I am suggesting a trigger to buy calls at $55.60. If triggered our multi-week target is $59.00 but we will plan on exiting prior to the earnings report.

Trigger @ 55.60

- Suggested Positions -

Buy the Oct $60 call (FLS1319J60) current ask $1.10

Annotated Chart:

Entry on July -- at $---.--
Average Daily Volume = 665 thousand
Listed on July 06, 2013


Noble Energy - NBL - close: 62.71 change: +1.08

Stop Loss: 60.95
Target(s): 68.50
Current Option Gain/Loss: Unopened
Time Frame: Exit PRIOR to earnings on July 25th
New Positions: Yes, see below

Company Description

Why We Like It:
NBL is an oil and natural gas company. The stock has been showing relative strength. This past week shares produced another bullish breakout to new all-time highs. Friday's high was $62.76. I am suggesting a trigger to buy calls at $63.05. If triggered our target is $68.50. However, we will plan on exiting positions prior to NBL's earnings report on July 25th.

More aggressive traders may want to aim higher. This past week has generated a new triple-top breakout buy signal on the point & figure chart with a $74.00 target.

Trigger @ 63.05

- Suggested Positions -

Buy the Aug $65 call (NBl1317H65) current ask $1.30

Annotated Chart:

Entry on July -- at $---.--
Average Daily Volume = 1.9 million
Listed on July 06, 2013