NEW DIRECTIONAL CALL PLAYS

Discovery Communications, Inc. - DISCA - close: 90.46

Stop Loss: 87.90
Target(s): 97.50
Current Option Gain/Loss: Unopened
Time Frame: exit PRIOR to earnings in mid February
New Positions: Yes, see below

Company Description

Why We Like It:
DISCA is in the services sector. This is a media company that owns a number of well known channels including the Discovery Channel, Animal Planet, Military Channel, TLC, Discovery Fit & Health, and more. There has been recent speculation that DISCA could be looking at Scripps Network Interactive (SNI) as an acquisition target. SNI owns several channels including the Food Network, HGTV, the Travel Channel, and more. Thus far any rumors do not seem to be negatively impacting shares of DISCA. The stock has been showing relative strength the last three weeks. More importantly DISCA just broke out significant resistance at the $90.00 level today.

I am suggesting a trigger to buy calls at $90.75. If triggered our target is $97.50 but we will plan to exit prior to DISCA's earnings report in mid February. FYI: The Point & Figure chart for DISCA is bullish with a $107 target.

Trigger @ 90.75

- Suggested Positions -

Buy Feb $90 call (DISCA1422B90) current ask $3.40

Annotated Chart:

Weekly Chart:

Entry on December -- at $---.--
Average Daily Volume = 1.1 million
Listed on December 30, 2013


NEW DIRECTIONAL PUT PLAYS

SodaStream Intl. - SODA - close: 49.15 change: -1.06

Stop Loss: 51.25
Target(s): 41.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
SODA is in the consumer goods sector. The company sells at home carbonated beverage systems. The stock has been underperforming the broader market since SODA peaked back in summer. Shares accelerated lower following its late October earnings report. Since then traders have been selling the rallies. The path of least resistance is down. However, I am suggesting we use small positions to limit our risk. There are a lot of bears already in this trade. The most recent data listed short interest at more than 50% of the very small 17.5 million share float.

The December intraday low was $48.80. SODA bounced at $48.85 today. I am suggesting a trigger to buy puts (remember, small positions) at $48.70. If triggered our target is $41.50. However, I want to warn you that the $45.00 level could be potential support.

Trigger @ 48.70 *small positions*

- Suggested Positions -

Buy Feb $45 PUT (SODA1422N45) current ask $2.50

Annotated Chart:

Entry on December -- at $---.--
Average Daily Volume = 980 thousand
Listed on December 30, 2013