NEW DIRECTIONAL CALL PLAYS
Costco Wholesale Corp. - COST - close: 74.25 change: +0.12
Stop Loss: 72.95
Current Option Gain/Loss: Unopened
Time Frame: 3+ weeks
New Positions: Yes, see Trigger
Why We Like It:
COST looks like a potential momentum candidate. After six weeks of consolidating sideways under the $73-74 zone the stock has broken out. Stronger than expected same-store sales in January was the catalyst to kick COST out of its trading range. I would be tempted to buy calls right now but COST has significant resistance near $75.00 dating back to early 2008. The high was $75.23. I am suggesting we use a trigger to buy calls on a breakout at $75.50. If triggered our target is $79.75. However, we will plan to exit ahead of COST's early March earnings report. That gives us three or four weeks.
The Point & Figure chart for COST is bullish with an $88 target.
Trigger @ 75.50
- Suggested Positions -
Buy the March $75 calls (COST1119C75) current ask $1.39
Entry on February xxth at $ xx.xx
Earnings Date 03/02/11 (confirmed)
Average Daily Volume = 5.8 million
Listed on February 7th, 2010