Bernie Schaeffer uses a combination of fundamental and technical and sentiment indicators to select his stock and options trades. Here's a long and a short idea from The Options Advisor.

"While Armstrong World Industries (NYSE: AWI) specializes in flooring, the shares are far from getting trampled underfoot.

"In fact, following a 319% rally off its March lows, AWI now sports a year-to-date gain of nearly 78%. What’s more, the shares have outperformed the S&P500 Index by some 62% on a relative-strength basis during the past 60 trading days.

"Currently, the shares are trending higher along solid support at their 10-day and 20-day moving averages, below which AWI has closed only once since mid-July.

"Sentiment is decidedly bearish on the security; the 10-day put/call ratio arrives at 5.8, as puts bought to open have nearly sextupled calls purchased during the past two weeks.

"Additionally, short interest accounts for more than 6% of AWI’s float. An unwinding of this pessimism should help propel the shares steadily higher. For options traders, we recommend buying the June 35 calls.

"St. Jude Medical (NYSE: STJ) has been a broad-market laggard lately, underperforming the SPX by 22% during the past 60 sessions.

"Weighing on the stock has been its 20-month moving average, which has been breached only once on a monthly closing basis since September 2008. Nevertheless, the Street’s outlook toward STJ remains sunny, with 14 out of 24 ranking analysts deeming the stock a 'buy' or better.

"Plus, the equity’s open intererest rate rests at 0.35, suggesting calls virtually triple puts among options slated to expire within three months. Amid the stock’s technical troubles, these bulls could abandon ship. 

"A round of downgrades or a reversal in sentiment in the options pits could exacerbate STJ’s challenges on the charts. For options traders, we recommend buying the April 40 puts."