NEW DIRECTIONAL CALL PLAYS

UnitedHealth Group - UNH - close: 74.85 change: +0.72

Stop Loss: 73.95
Target(s): 82.50
Current Option Gain/Loss: Unopened
Time Frame: Exit PRIOR to earnings on January 16th.
New Positions: Yes, see below

Company Description

Why We Like It:
UNH is in the healthcare sector. The company offers healthcare insurance plans. The stock has been volatile of late as investors reacted to UNH's earnings report in October and some legislation that affected Obamacare and Medicare payments. Through all of the volatility in UNH over the past few months the stock has created what appears to be a potential inverse head-and-shoulders pattern, which is bullish. The neckline (in this case resistance) of the pattern is in the $75.00-76.00 zone. A breakout would suggest a rally into the $83-84 area.

Tonight we're suggesting a trigger to buy calls at $76.05, which would be a new all-time high for UNH. If triggered at $76.05 our short-term target is $82.50 but we will plan to exit prior to UNH's earnings report on January 16th. Our target is optimistic and we'll make adjustments as needed. We may end up exiting closer to $80.00 instead.

Trigger @ 76.05

- Suggested Positions -

Buy the Feb $75 call (UNH1422B75) current ask $2.57

Annotated Chart:

Entry on December -- at $---.--
Average Daily Volume = 4.4 million
Listed on December 26, 2013


United Technologies - UTX - close: 112.69 change: +1.22

Stop Loss: 110.40
Target(s): 118.50
Current Option Gain/Loss: Unopened
Time Frame: exit PRIOR to earnings in late January
New Positions: Yes, see below

Company Description

Why We Like It:
UTX is in the industrial goods sector. We've seen some of the market's strongest performers rise recently from the industrial goods sector. UTX is one of them with a sharp bounce from its December lows. Today's rally (+1.0%) is a bullish breakout to new all-time highs. We suspect this momentum will continue.

Today's intraday high was $112.76. I am suggesting a trigger to buy calls at $113.05. If triggered our target is $118.50 but we'll plan on exiting prior to UTX's earnings report in late January. More aggressive investors might want to consider aiming higher. The Point & Figure chart for UTX is bullish with a $139 target.

Trigger @ 113.05

- Suggested Positions -

buy the Feb $115 call (UTX1422B115) current ask $1.68

Annotated Chart:

Entry on December -- at $---.--
Average Daily Volume = 2.8 million
Listed on December 26, 2013