Six Flags Entertainment - SIX - close: 61.87 change: +0.42

Stop Loss: 60.90
Target(s): 64.95
Current Option Gain/Loss: Unopened
Time Frame: exit prior to the Oct. 24th earnings report
New Positions: Yes, see below

Company Description

Why We Like It:
Shares of SIX, a theme park operator, have been outperforming the broader market. SIX broke out past resistance near $60.00 a few days ago and now it's consolidating sideways under resistance near $62.00.

I am suggesting a trigger to buy calls at $62.25 with a stop loss at $60.90. Our target is $64.90 but more aggressive traders could definitely aim higher. We do not want to hold over the earnings report on Oct. 24th. FYI: The Point & Figure chart for SIX is bullish with a long-term $98 target.

NOTE: Readers may want to keep their position size small. The bid/ask spread on options for SIX are a little wide.

Trigger @ 62.25

- Suggested Positions -

buy the Nov $65 call (SIX1217k65) current ask $0.75

Annotated Chart:

Entry on October xx at $ xx.xx
Average Daily Volume = 334 thousand
Listed on October 10, 2012

Lorillard, Inc - LO - close: 114.87 change: -1.43

Stop Loss: 116.15
Target(s): 110.25
Current Option Gain/Loss: Unopened
Time Frame: exit ahead of the late October earnings report
New Positions: Yes, see below

Company Description

Why We Like It:
LO is a cigarette company. Even though the stock sports a strong dividend yield of 5.3% that's not stopping investors from selling the stock. Shares are in a bearish trend of lower highs and LO is breaking down through support near $115.00.

I am suggesting a trigger to buy puts at $114.50. Our target is $110.25. More aggressive traders could aim lower but we do not want to hold over the late October earnings report (not yet confirmed).

Trigger @ 114.50

- Suggested Positions -

buy the NOV $110 PUT (LO1217w110) current ask $2.12

Annotated Chart:

Entry on October xx at $ xx.xx
Average Daily Volume = 1.4 million
Listed on October 10, 2012