NEW DIRECTIONAL CALL PLAYS

The Boeing Company - BA - close: 129.94 change: +1.48

Stop Loss: 128.40
Target(s): to be determined
Current Option Gain/Loss: Unopened
Time Frame: 6 to 9 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
BA is in the industrial goods sector. The company is a major manufacturer in the aerospace and defense industries. The company's earnings results have been coming in better than expected. Shares peaked back on January 22nd, 2014 at $144.57 a share. A few days later BA reported Q4 earnings that beat Wall Street's top and bottom line estimates. Unfortunately BA lowered their 2014 guidance and the stock plunged on this news.

BA has been stuck consolidating sideways in the $121-131 trading range ever since. The most recent earnings report on April 23rd also beat the street's estimates on both the profit and revenue number. BA also raised their 2014 guidance. This lifted the stock but the rally stalled at technical resistance near the top of its trading range and the 100-dma.

BA has been affected by the Ukraine-Russian conflict since the U.S. State Department did suspend licenses for defense sales to Russia. Plus BA's and Lockheed's joint-venture has been banned from working with a Russian rocket-engine maker. Yet these headlines do not seem to be affecting BA's stock price.

Investors could be focusing on BA's aerospace business. A recent Reuters report unveiled that BA is on time to launch three new jet designs, the 787-9 Dreamliner, the 737 Max and the 777X. BA plans to introduce a total of six new jets between now and 2020, which could drive huge sales for an aerospace industry that is projected to surpass $4 trillion.

A handful of analysts have put a $160-161 price target on BA's stock. Currently the point & figure chart has a new buy signal and forecasting at $148 target. If shares can breakout from its trading range it could move quickly.

The $131.00-131.75 area is resistance. Therefore we're suggesting a trigger to buy BA calls at $132.00. I'm not setting an exit target yet but readers may want to target the $144 area.

Trigger @ $132.00

- Suggested Positions -

Buy the Jul $135 Call (BA1419G135) current ask $2.14

Annotated Chart:

Weekly Chart:

Entry on May -- at $---.--
Average Daily Volume = 3.7 million
Listed on May 03, 2014


NEW DIRECTIONAL PUT PLAYS

LinkedIn Corp. - LNKD - close: 147.73 change: -13.49

Stop Loss: 158.25
Target(s): to be determined
Current Option Gain/Loss: Unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
LNKD is in the technology sector. The company is considered a major part of the social media space with its online professional network of 300 million people. Unfortunately investor sentiment on the high-flying momentum names has reversed this year.

A number of the momentum stocks peaked in the first quarter of 2014. Yet for LNKD the stock peaked in September last year at $256 a share. High-profile momentum names are usually driven by high expectations for growth. When growth slows down so does the stock price. That seems to be the predicament for LNKD. They're so big now that growth is slowing. They've now seen six consecutive quarters of slowing growth.

LNKD's earnings report back in February sparked a sell-off when the company lowered their 2014 guidance. Management quickly followed that up with a big announcement they were moving into a Chinese market. That seemed like a sure bet since China has more than 1.3 billion people and broad access to the Internet. Yet the China news failed to stop the decline in LNKD shares.

LNKD's latest report this past week came in better than expected and revenues soared +45% from a year ago. LNKD management even raised their 2014 guidance this time. Unfortunately they didn't raise it enough and their new raised guidance is still below Wall Street's 2014 estimates.

Analysts are divided on the name. Many are still bullish and were telling investors to buy on weakness although a few of them have been saying that for months. A handful of other firms have lowered their price targets on LNKD following its latest earnings report and guidance.

The stock's recent sell-off has broken some long-term support. The trend of lower highs and lower lows is very much intact. The Point & Figure chart is bearish and forecasting at $106 target.

We are suggesting readers take advantage of this bearish trend and weakened expectations with puts. Buy puts on Monday morning. Traders should consider this an aggressive, higher-risk trade due to LNKD's volatility. The stock can see big swings. Many of its bounces within the current down trend are $20-$30 each. I suggest small positions to limit risk. The April 7th low was $158.06 and this area could be resistance. We will start with a stop loss at $158.25.

*small positions* - Suggested Positions -

Buy the Jun $140 PUT (LNKD1421R140) current ask $6.15

Annotated Chart:

Weekly Chart:

Entry on May -- at $---.--
Average Daily Volume = 3.8 million
Listed on May 03, 2014