NEW DIRECTIONAL CALL PLAYS

Packaging Corp. of America - PKG - close: 62.21 change: +0.59

Stop Loss: 59.75
Target(s): 67.50
Current Option Gain/Loss: Unopened
Time Frame: 6 to 9 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
PKG is in the consumer goods sector. They make container board and packaging products. If you believe in an improving economy then that should be bullish for PKG since more business activity should mean more demand for packaging. If you look at the stock you'll see that PKG popped higher back in mid September as investors reacted to news the company was buying rival packing company Boise (BZ) for $1.28 billion. Normally the acquiring company's stock tends to go down on an acquisition but Wall Street applauded the move. A month later PKG reported earnings that beat Wall Street's both top and bottom line estimates.

Since then PKG has broken out to a new all-time high. Friday's intraday high was $62.33. I am suggesting a trigger to buy calls at $62.50. If triggered our multi-week target is $67.50.

Trigger @ 62.50

- Suggested Positions -

Buy the 2014 Jan $65 call (PKG1418a65) current ask $1.40

Annotated Chart:

Entry on October -- at $---.--
Average Daily Volume = 1.0 million
Listed on October 23, 2013


Pall Corp. - PLL - close: 80.27 change: +0.87

Stop Loss: 77.90
Target(s): 86.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
PLL is in the industrial goods sector. The company operates in two segments, Life Sciences and Industrial. The stock has been showing relative strength. You may recall that the market peaked in mid September on the FOMC meeting and the S&P 500 corrected lower several days. Shares of PLL did not correct immediately and instead consolidating sideways. Traders were quick to buy the dip in early October near PLL's rising 30-dma. Since then shares have broken out past resistance near $78.00 to hit new all-time highs.

Friday's move over potential round-number resistance at $80.00 is bullish. Friday's intraday high was $80.29. I am suggesting a trigger to buy calls at $80.50. If triggered our target is $86.00. However, we will plan to exit prior to PLL's earnings report in late November (no date set yet). FYI: The Point & Figure chart for PLL is bullish with a long-term $113 target.

Trigger @ 80.50

- Suggested Positions -

Buy the DEC $85 call (PLL1321L85) current ask $1.05

Annotated Chart:

Entry on October -- at $---.--
Average Daily Volume = 551 thousand
Listed on October 23, 2013