NEW DIRECTIONAL CALL PLAYS

Pacira Pharmaceuticals - PCRX - close: 73.16 change: +0.32

Stop Loss: 69.95
Target(s): to be determined
Current Option Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
PCRX is in the healthcare sector. The company is in the drug manufacturing industry. Shares have come a long way from their IPO at $7.00 back in 2011. The stock's rise has been build on robust demand for its local analgesic Exparel. The company recently raised new money with a $100 million secondary offer at $64 a shares last month.

PCRX has been consolidating in the $60-74 zone the last few weeks and the current rally has PCRX poised for a breakout higher. If shares do breakout it could see a short squeeze. The most recent data listed short interest at 17% of the 33.6 million share float.

I do consider this a somewhat aggressive trade because the option spreads on PCRX are a bit wider than we like. Tonight we're suggesting a trigger to buy calls at $74.25. We'll start with a stop loss at $69.90. More conservative investors may want to wait for a rally above the $75.00 level before initiating positions.

FYI: The Point & Figure chart for PCRX is bullish with a $93 target.

Trigger @ $74.25

- Suggested Positions -

Buy the Aug $80 call (PCRX1416H80) current ask $6.00

Annotated Chart:

Weekly Chart:

Entry on May -- at $---.--
Average Daily Volume = 602 thousand
Listed on May 05, 2014


NEW DIRECTIONAL PUT PLAYS

Fluor Corp. - FLR - close: 74.28 change: -1.17

Stop Loss: 75.55
Target(s): to be determined (possibly $67.00)
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
FLR is in the industrial goods sector. The company is part of the construction industry. Unfortunately for shareholders the construction stocks have not been performing well in this market. The company recently reported earnings that missed estimates and revenues and management lowered their 2014 guidance.

The stock already had a bearish trend of lower highs prior to this disappointing earnings results. Now shares are poised to breakdown under significant support in the $74 area and its simple 200-dma. I am suggesting a trigger to buy puts at $73.25. We're not setting an exit target yet but I am tentatively aiming for the $67 area. The Point & Figure chart for FLR is bearish with a $64 target.

Trigger @ $73.25

- Suggested Positions -

Buy the Jun $72.50 PUT (FLR1421R72.5) current ask $1.55

Annotated Chart:

Weekly Chart:

Entry on May -- at $---.--
Average Daily Volume = 1.2 million
Listed on May 05, 2014