Vulcan Materials Co. - VMC - close: 44.78 change: +1.50

Stop Loss: 39.95
Target(s): 47.75
Current Option Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Company Description

Why We Like It:
Commodity and material stocks were showing relative strength on Monday thanks in part to weakness in the U.S. dollar. Shares of VMC surged past technical resistance at the 200-dma to close at new four-month highs. The stock market's afternoon swoon could be the start of a multi-day correction. While VMC was showing relative strength it will probably still pull back if we see a market-wide decline. We want to use a dip to buy calls. I'm suggesting a trigger at $43.00. We'll start the play with a stop loss at $39.95 but cautious traders might be able to get away with a stop loss a lot closer to $41.00.

Trigger @ $43.00

Suggested Position: Buy the 2011 January $45 calls (VMC1122A45)

- or -

Buy the 2011 February $45 calls (VMC1119B45)

Annotated Chart:

Entry on December xxth at $ xx.xx
Earnings Date 02/07/11 (unconfirmed)
Average Daily Volume = 1.5 million
Listed on December 13th, 2010