A few more stocks on my watch list are CLB, CHRW, and BBY. CLB is an oil services stock and shares are testing potential support near its 30-dma and the $90 level. This could be a bullish entry point but oil stocks have been somewhat volatile lately. I might wait until next week to consider an entry point. CHRW is testing its multi-month trendline of higher lows (support) and previous resistance near $55.00 (now support). This looks like a new bullish entry point but I'd use tight stops given the market's bearish tone this week. BBY is consolidating sideways in a large triangle pattern of higher lows and lower highs. Readers may want to consider strangles on this stock as a breakout from the formation should happen in the next week or two. Be sure to give yourselves enough time for the strangle to work.
NEW DIRECTIONAL CALL PLAYS
Compass Minerals - CMP - close: 54.57 chg: +1.37 stop: 51.90
Why We Like It:
If you check out a long-term weekly chart on CMP is looks like shares are poised to breakout from a long-term bearish trend. CMP has been showing some relative strength. The stock is on the verge of breaking out past its August highs and a few significant moving averages. I am suggesting a trigger to buy calls at $55.55. If triggered our first target is $59.75. We can tentatively set a second target at $64.00. FYI: The Point & Figure chart has turned bullish with a $69 target.
September strikes have more open interest but I am suggesting the Octobers. Decembers would work well too. My time frame is several weeks.
BUY CALL OCT 55.00 CMP-JK open interest= 164 current ask $2.85
BUY CALL OCT 60.00 CMP-JL open interest= 39 current ask $1.05
Picked on September xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/28/09 (unconfirmed)
Average Daily Volume = 415 thousand
Listed on September 02, 2009