NEW DIRECTIONAL CALL PLAYS

Advance Auto Parts - AAP - close: 109.85 change: +1.92

Stop Loss: 107.95
Target(s): 117.50
Current Option Gain/Loss: Unopened
Time Frame: exit PRIOR to January option expiration
New Positions: Yes, see below

Company Description

Why We Like It:
AAP is in the services sector. They run a specialty retail operation for auto parts with almost 4,000 stores. Looking at the chart of AAP you might notice the big gap higher back in October. That was the market's reaction to news that AAP was buying General Parts International in an all-cash deal worth about $2 billion. That's impressive since usually the stock of the acquiring company goes down on a deal. The market obviously approved.

Shares have been showing relative strength and they're currently up five weeks in a row. Friday's +1.7% display of relative strength left AAP at a new all-time closing high. We are suggesting a trigger to buy calls at $110.65. If triggered our short-term target is $117.50. Longer-term traders may want to aim higher since the Point & Figure chart for AAP is bullish with a $140 target.

Trigger @ 110.65

- Suggested Positions -

buy the Jan $110 call (AAP1418a110) current ask $3.60

Annotated Chart:

Entry on December -- at $---.--
Average Daily Volume = 923 thousand
Listed on December 14, 2013


3D Systems - DDD - close: 80.97 change: +0.61

Stop Loss: 78.90
Target(s): 89.00
Current Option Gain/Loss: Unopened
Time Frame: exit PRIOR to January option expiration
New Positions: Yes, see below

Company Description

Why We Like It:
DDD is in the technology sector. The company is one of the major players in the growing field of 3-D printing. The company made headlines on Friday with news they acquired Village Plastics, a provider of 3D printing materials. DDD stock has been showing strength the last couple of days. If this rally continues the stock could see some short covering. The most recent data listed short interest at almost 20% of the 95 million share float.

Friday's high was $81.93. Tonight we're suggesting a trigger to buy calls at $82.05. More conservative traders may want to wait for DDD to trade above its December 11th high of $82.65 before initiating positions.

If our trade is triggered our target is $89.00. Keep in mind that DDD shares can be volatile. I am suggesting we keep our position size small to limit our risk.

Trigger @ 82.05 *small positions*

- Suggested Positions -

buy Jan $85 call (DDD1418a85) current ask $3.40

Annotated Chart:

Entry on December -- at $---.--
Average Daily Volume = 5.7 million
Listed on December 14, 2013


Lockheed Martin - LMT - close: 139.03 change: +1.05

Stop Loss: 137.75
Target(s): 149.00
Current Option Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
LMT is in the industrial goods sector. The company is a major player in the aerospace and defense industries. News this past week that congress has passed the new two-year U.S. budget deal that eliminates the defense-sector sequestration cuts should be bullish for the defense stocks. It is widely assumed that the senate will vote in favor of the new budget this coming week.

Currently shares of LMT are hovering below short-term resistance at the $140.00 level. I am suggesting a trigger to buy calls at $140.25. If triggered our multi-week target is $149.00. Keep in mind that the $144-145 area is currently overhead resistance.

I'm listing the March calls. If you want to take a more short-term approach then the 2014 January calls are much cheaper.

Trigger @ 140.25

- Suggested Positions -

Buy the Mar $145 call (LMT1422C145) current ask $3.00

Annotated Chart:

Entry on December -- at $---.--
Average Daily Volume = 2.0 million
Listed on December 14, 2013