NEW DIRECTIONAL CALL PLAYS

Chicago Bridge & Iron - CBI - close: 75.78 change: -6.13

Stop Loss: 72.40
Target(s): 82.50
Current Option Gain/Loss: + 0.0%
Time Frame: Exit PRIOR to CBI's earnings report in February
New Positions: see below

Comments:
01/25/14: CBI was an active call play until shares collapsed on Friday. This sell-off is way overdone. We want to take advantage of this temporary weakness. Tonight we're suggesting traders buy calls at the opening bell on Monday morning with a stop loss at $72.40, which is just below the November 2013 lows. Our target is $82.50 but we will plan on exiting prior to CBI's earnings report in late February.

More nimble traders may want to try and launch positions on a dip at $75.00 or the simple 10-dma near $74.40 instead of just buying calls at the opening bell on Monday.

- Suggested Positions -

Buy the Mar $80 call (CBI1422C80) current ask $1.70

Annotated Chart:

Entry on January 27 at $00.00
Average Daily Volume = 1.5 million
Listed on January 25, 2014


Honeywell Intl. - HON - close: 88.47 change: -1.33

Stop Loss: 84.75
Target(s): 94.50
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
HON is in the industrial goods sector. The stock is in a long-term up trend (see the weekly chart). On Friday the company reported better than expected earnings results on both the top and bottom line. Shares look headed for technical support at the simple 100-dma. We want to be ready to buy calls on a dip near this level. I am suggesting a trigger to buy calls at $87.25 with a stop loss at $84.75.

Trigger @ 87.25

- Suggested Positions -

Buy the Mar $90 call (HON1422C90) current ask $1.53

Annotated Chart:

Weekly Chart:

Entry on January -- at $---.--
Average Daily Volume = 2.2 million
Listed on January 25, 2014


iShares Russell 2000 ETF - IWM - close: 113.45 change: -2.97

Stop Loss: 109.25
Target(s): 118.00
Current Option Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The small cap Russell 2000 index hit new all-time highs on Wednesday last week. Since then the market's profit taking has shaved off more than 3%. We suspect that the Russell 2000 and its ETF, the IWM, will dip toward its long-term trend line of support (see charts). We want to be ready to buy calls on this dip. I'm suggesting a trigger at $111.00 with a stop loss at $109.25.

Trigger @ $111.00

- Suggested Positions -

Buy the Mar $115 call (IWM1422C115) current ask $2.27

Annotated Chart:

Weekly Chart:

Entry on January -- at $---.--
Average Daily Volume = 31.7 million
Listed on January 25, 2014


NASDAQ-100 ETF - QQQ - close: 86.74 change: -1.74

Stop Loss: 84.45
Target(s): 92.00
Current Option Gain/Loss: + 0.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
01/25/14: The QQQ was an active call play on the newsletter until Friday's profit taking. Odds are good we will see the QQQ test support near $86.00 and its rising 50-dma. We want to be ready to take advantage of this temporary weakness and buy calls on a dip at $86.00 with a stop loss at $84.45.

*small positions* - Suggested Positions -

Buy the Mar $87 call (QQQ1422C87) current ask $1.93

Annotated Chart:

Entry on January 00 at
Average Daily Volume = 29 million
Listed on January 25, 2014