NEW DIRECTIONAL CALL PLAYS

Costco Wholesale - COST - close: 119.37 change: +1.03

Stop Loss: 117.90
Target(s): 124.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
COST has been performing well. Traders bought the dip at its long-term trend line of support in June. They bought the dip again just over a week ago near prior highs around the $115 area. This technical trading has pushed COST toward resistance at the $120 level and we suspect it will breakout higher.

Tonight we're suggesting a trigger to buy calls at $120.25. If triggered our target is $124.75.

NOTE: COST is due to begin trading ex-dividend on August 7th. The dividend should be 31 cents.

Trigger @ 120.25

- Suggested Positions -

buy the Sep $120 call (COST1321i120) current ask $2.05

Annotated Chart:

Entry on August -- at $---.--
Average Daily Volume = 1.4 million
Listed on August 03, 2013


Stericycle, Inc. - SRCL - close: 117.19 change: +0.48

Stop Loss: 115.95
Target(s): 124.00
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
SRCL is in the waste management industry. The stock peaked at all-time highs near $119.60 around two weeks ago. Since then shares have corrected lower (about -3.5%) and traders have been buying the dips near its rising 20-dma. Shares displayed relative strength on Friday and we suspect that SRCL will not only retest its highs but breakout past the $120 level.

We are suggesting a trigger to buy calls at $117.35. If triggered our target is $124.00. I do expect some resistance and a pullback near $120 but we have a four to six week time frame.

Trigger @ 117.35

- Suggested Positions -

buy the Sep $120 call (SRCL1321i120) current ask $1.50

Annotated Chart:

Entry on August -- at $---.--
Average Daily Volume = 334 thousand
Listed on August 03, 2013


United Technologies - UTX - close: 107.77 change: +0.59

Stop Loss: 104.90
Target(s): 109.85
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
UTX is in the industrial goods sector. Some of the industrial names have been super strong. UTX is one of them with the stock showing impressive relative strength over the last few weeks. Shares are considered overbought here but this is a momentum trade.

You could choose to buy calls at the open on Monday. One alternative would be to wait for a rally past $108.00. We are suggesting traders wait and buy calls on a dip at $106.55. If triggered we'll start with a stop loss at $104.90, about 40 cents below the simple 10-dma. Our initial target is $109.85 but we will adjust the target as the play progresses.

FYI: UTX will begin trading ex-dividend on August 14th. The quarterly dividend should be 53.5 cents.

Buy the dip trigger @ $106.50

- Suggested Positions -

Buy the Sep $110 call (UTX1321i110) current ask $1.25

Annotated Chart:

Entry on August -- at $---.--
Average Daily Volume = 3.2 million
Listed on August 03, 2013