NEW DIRECTIONAL CALL PLAYS

iShares Russell 2000 ETF - IWM - close: 120.81 change: +1.36

Stop Loss: 116.40
Target(s): To Be Determined
Current Option Gain/Loss: Unopened
Average Daily Volume = 41 million
Entry on February -- at $---.--
Listed on February 12, 2015
Time Frame: 10 to 12 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The IWM is the iShares exchange traded fund (ETF) on the small cap Russell 2000 index. The market rally in 2014 was mostly a large-cap affair. The S&P 500 index delivered a +11% gain and the small caps lagged behind with a +3.6% gain for 2014. That could change this year.

Small caps tend to see bigger moves, both up and down, than their larger-cap rivals. Right now the small caps are poised to breakout higher.

Many people look to the small cap index as a sentiment indicator for the broader market. The small cap Russell index has (about) 2,000 stocks. Compared to 500 in the S&P large cap index and only 30 stocks in the Dow Industrials.

Small cap companies in the Russell 2000 tend to be more U.S. focused so they're not encumbered by the strong dollar as much as the large cap global companies can be.

Right now the IWM is on the verge of breaking out past its all-time highs set in December (in the $121.40 area). Tonight we are suggesting a trigger to buy calls if the IWM can trade at $121.55.

We are not setting a target tonight but I will note that the IWM's point & figure chart is forecasting a long-term target of $154.00.

Trigger @ 121.55

- Suggested Positions -

Buy the MAY $125 CALL (IWM150515C125) current ask $2.30

Option Format: symbol-year-month-day-call-strike

Daily Chart:

Weekly Chart: