NEW DIRECTIONAL CALL PLAYS

Starwood Hotels & Resorts - HOT - close: 74.85 change: +0.22

Stop Loss: 73.40
Target(s): 79.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 5 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Starwood is in the services sector. HOT runs a hotel and leisure company. When HOT last reported earnings in late October the company beat Wall Street's estimates on both the top and bottom line. The market reacted by lifting HOT to new multi-year highs. Since then HOT has garnered some bullish analyst comments and new price targets in the $80s.

The last few days have seen HOT consolidating sideways below resistance near $75.00. HOT's all-time high is closer to $75.50. I am suggesting a trigger to buy calls at $75.25. More conservative traders may want to wait for a rally past $75.50 instead. If we are triggered at $75.25 our target is $79.75. More aggressive traders could aim higher. The Point & Figure chart for HOT is bullish with a $96 target.

Trigger @ 75.25

- Suggested Positions -

Buy the DEC $75 call (HOT1322L75) current ask $1.93

Annotated Chart:

Entry on November -- at $---.--
Average Daily Volume = 1.8 million
Listed on November 04, 2013


Kansas City Southern - KSU - close: 124.06 change: +1.45

Stop Loss: 122.00
Target(s): 134.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 5 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
KSU is in the transportation industry, specifically the railroads. The transportation index has been showing significant relative strength and the Dow Jones railroad index is poised to breakout to new all-time highs.

Shares of KSU exploded higher in mid October following its earnings report even though the company missed estimates on both the top and bottom line. Investors must have been expecting a bigger miss. The post-earnings rally has lifted KSU to new all-time highs. Now after last week's pullback the stock looks poised to resume the up trend.

I am suggesting a trigger to buy calls at $125.25. More aggressive traders may want to jump in just over KSU's high at $124.55 instead. If we are triggered at $125.25 our target is $134.00. More aggressive investors could aim higher. The Point & Figure chart for KSU is bullish with a $152 target.

Trigger @ 125.25

- Suggested Positions -

Buy the DEC $125 call (KSU1322L125) current ask $3.10

Annotated Chart:

Entry on November -- at $---.--
Average Daily Volume = 813 thousand
Listed on November 04, 2013