NEW DIRECTIONAL CALL PLAYS

Continental Resources - CLR - close: 113.27 change: +1.29

Stop Loss: 109.75
Target(s): 119.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
CLR is in the basic materials sector. They are a domestic oil company. The stock had a strong 2013 with a rally from $73 to $120. Since peaking at $120 in October-November last year CLR has already seen a -20% correction. Now after a multi-week consolidation shares of CLR look poised to breakout higher.

Friday's intraday high was $113.55. I am suggesting a trigger to buy calls at $113.75. If triggered our target is $119.75.

FYI: CLR is trying to bounce from support on its point & figure chart. A move over $114.00 would produce a new buy signal.

NOTE: CLR is due to report earnings in the next two to three weeks (very late February or early March) and we will plan to exit prior to the announcement.

Trigger @ 113.75

- Suggested Positions -

Buy the MAR $120 call (CLR1422C120) current ask $2.50

Annotated Chart:

Entry on February -- at $---.--
Average Daily Volume = 1.1 million
Listed on February 15, 2014


Starbucks Corp. - SBUX - close: 75.03 change: +0.34

Stop Loss: 73.95
Target(s): 79.00 & 81.75
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
SBUX is in the services sector. Shares of this ubiquitous coffee shop owner have had a rough couple of months. After an amazing performance in 2013 shares of SBUX lunged from all-time highs near $82 n very late November to about $69 in early February. That's a -15% correction in just over two months. The oversold bounce stalled a few days ago but since then SBUX has been consolidating sideways.

SBUX currently faces resistance at $75.00 and at the $76.00 levels. Plus there is potential resistance at its simple 50-dma (currently at 75.75). It is worth noting that SBUX appears to have broken the two-month trend of lower highs. If the stock can trade over $76.00 it should create a new buy signal on the Point & Figure chart.

Right now market pundits are worried that the unusually cold December, January and now February has negatively impacted the U.S. economy. The weather has been keeping people indoors, which would be negative for any retailer like SBUX. Then again it's possible the cold weather might inspire an extra trip to your nearby Starbucks store.

We are suggesting traders wait for a breakout over $76.00. I'm listing a suggested entry point at $76.15. If triggered I am setting two potential targets. Our conservative target is $79.00. Our more aggressive target is $81.75.

Trigger @ 76.15

- Suggested Positions -

Buy the Mar $77.50 call (SBUX1422C77.5) current ask $0.84

- or -

Buy the Apr $80 call (SBUX1419D80) current ask $0.79

Annotated Chart:

Entry on February -- at $---.--
Average Daily Volume = 8.1 million
Listed on February 15, 2014


NEW DIRECTIONAL PUT PLAYS

Pepsico, Inc. - PEP - close: 78.09 change: -1.60

Stop Loss: 80.15
Target(s): 74.00
Current Option Gain/Loss: Unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
PEP is in the consumer goods sector. The company is best known for its soft drink beverages but they also make snack food. PEP reported earnings on Thursday morning. Wall Street was expecting a profit of $1.01 a share on $20.21 billion in revenues. PEP delivered $1.05 a share with revenues of $20.12 billion. PEP said that foreign exchange rates hurt net revenues. Management's guidance was in-line with estimates. PEP is raising the dividend by 15% and announced another $5 billion in stock buybacks.

The market was unhappy with this latest earnings report. Before the report PEP's bounce had stalled right at technical resistance on its 50-dma. After the report PEP has been plunging, now down two days in a row. Shares ended the week on support at the $78.00 level.

The path of least resistance appears to be down. I am suggesting a trigger to buy puts at $77.85. If triggered our target is $74.00. This coincides with the bearish price target from its point & figure chart.

Trigger @ 77.85

- Suggested Positions -

Buy the APR $75 PUT (PEP1419P75) current ask $0.96

Annotated Chart:

Weekly Chart:

Entry on February -- at $---.--
Average Daily Volume = 5.7 million
Listed on February 15, 2014