NEW DIRECTIONAL CALL PLAYS

LyondellBasell Industries - LYB - close: 95.45 change: +1.00

Stop Loss: 92.45
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:
LYB is in the basic materials sector. The company manufactures chemicals and polymers. This stock has been consistently pushing higher in spite of a disappointing earnings report in late April. We see this as a relative strength trade.

LYB just recently broke through resistance near $94.00 and shares bounced there, near $94, on Thursday and Friday. We're suggesting new bullish positions at the opening bell on Monday with a stop loss at $92.45. It is possible that the $100.00 level could be round-number resistance but we are aiming higher. The Point & Figure chart for LYB is bullish with a $110 target.

FYI: LYB will begin trading ex-dividend on May 12th. The quarterly dividend should be 70 cents.

- Suggested Positions -

Buy the Sep $100 call (LYB140920C100)* current ask $2.55

*I've provided the more standardized option symbol format.
symbol-year-month-day-call-strike

Annotated Chart:

Entry on May -- at $---.--
Average Daily Volume = 3.1 million
Listed on May 10, 2014


United Parcel Service - UPS - close: 99.76 change: +0.77

Stop Loss: 97.75
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:
UPS is in the services sector. The company provides ground and air freight delivery services. Last year the stock market delivered a stellar performance. Shares of UPS certainly enjoyed the bull market last year and produced big gains in the fourth quarter. December 31st proved to be the peak as profit taking set in immediately and the first month of 2014 was painful for UPS. The company lowered their guidance in January, which only fueled the sell-off.

Fortunately UPS has found support at a long-term trend of higher lows. Even their recent disappointing earnings report and cautious guidance has failed to dislodge the up trend. Now we see UPS on the verge of breaking out past resistance at the $100.00 mark.

We're suggesting a trigger to buy calls at $100.25. If triggered we will start with a stop loss at $97.75. We're not setting an exit target yet but the Point & Figure chart for UPS is bullish with a $114 target.

Trigger @ $100.25

- Suggested Positions -

Buy the Jul $100 call (UPS140719C100)* current ask $1.75
*I've provided the more standardized option symbol format.
symbol-year-month-day-call-strike

Annotated Chart:

Weekly Chart:

Entry on May -- at $---.--
Average Daily Volume = 2.9 million
Listed on May 10, 2014


NEW DIRECTIONAL PUT PLAYS

Discovery Communications - DISCA - close: 73.06 change: -1.30

Stop Loss: 75.05
Target(s): to be determined
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
DISCA is in the services sector. The company operates as a media company with three segments: U.S. Networks, International Networks, and Education. In the U.S. they are probably best known for their Discovery Channel. The stock has had an amazing run over the last five years but the stock is starting to look broken with the correction in 2014. As of Friday's close DISCA is down -19% from its late December highs. That's almost bear-market territory.

The company's latest earnings report just a few days ago was mixed. DISCA beat the bottom line estimate by 4 cents with 75 cents a share. Revenues missed at $1.41 billion for the quarter. DISCA reaffirmed its 2014 guidance. Unfortunately investors sold the news. Now DISCA is sinking to new multi-month lows and is breaking some significant long-term trend lines.

We are suggesting a trigger to buy puts at $72.25. If triggered we will start with a stop loss at $75.05. We're not setting a target yet but the Point & Figure chart for DISCA is bearish with a $59 target.

Trigger @ $72.25

- Suggested Positions -

Buy the Jul $70 PUT (DISCA140719P70)* current ask $1.50
*I've provided the more standardized option symbol format.
symbol-year-month-day-put-strike

Annotated Chart:

Weekly Chart:

Entry on May -- at $---.--
Average Daily Volume = 1.63 million
Listed on May 10, 2014