NEW DIRECTIONAL CALL PLAYS

Northrop Grumman - NOC - close: 115.63 change: +0.44

Stop Loss: 113.75
Target(s): 124.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 5 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
NOC is in the industrial goods sector. The company is a major player in the defense and aerospace industry. This group of stocks performed very well last year and they have kept the momentum alive thus far in 2014 (check out names like BA, LMT, GD,). We like NOC because shares seem to be a little bit less volatile on a daily basis. The stock just set a new all-time closing high today.

Looking ahead to tomorrow the market will be moving in reaction to the December jobs report. If stocks rally on the news we could see NOC surge to new highs. I am suggesting a trigger to buy calls at $116.50. If triggered our target is $124.00. I'll confess that might be a little bit optimistic since the $120 level could be round-number resistance. We will plan on exiting prior to NOC's earnings in very late January or early February (no date yet).

Trigger @ 116.50

- Suggested Positions -

buy the FEB $1120 call (NOC1422B120) current ask $1.20

Annotated Chart:

Entry on January -- at $---.--
Average Daily Volume = 1.3 million
Listed on January 09, 2014