The rise in retail sales and the improvement in consumer sentiment should bode well for these two stocks.

Editor's Note:

I hesitate to load up on new bullish trades right now with the S&P 500 stuck in its trading range. If the index can breakout it should herald a new leg higher. I am listing a few stocks that caught my eye and made it to my watch list as possible bullish candidates if the market improves.

Stocks to watch: SCL, AXE, CHKP, PDCO, KO, WY, HON, and F


NEW BULLISH Plays

Disney - DIS - close: 31.70 change: +0.40 stop: 29.99

Why We Like It:
Improving consumer sentiment and rising retail sales should be a positive environment for all of DIS' products and divisions. The stock just broke out higher from a four-week consolidation. This looks like an entry point but I would be cautious when it comes to position size with the major market indices still stuck in a trading range.

Shares of DIS are testing a trendline of higher highs. Patient traders may want to wait for a dip back toward $31.00-30.50 before initiating positions. Our target is a little optimistic at $34.75 but we will plan to exit ahead of the February earnings report. FYI: The Point & Figure chart currently points to a $45 target.

Annotated chart:

Entry on  December 12 at $31.70 
Change since picked:     + 0.00   			
Earnings Date          02/09/10 (unconfirmed)    
Average Daily Volume:      11.0 million 
Listed on  December 12, 2009    


Home Depot - HD - close: 28.49 change: +0.50 stop: 27.40

Why We Like It:
HD is another stock that should benefit from rising retail sales and stronger consumer sentiment. Shares have rallied to resistance near $28.50. I'm suggesting traders use a trigger to buy the stock at $28.60. If triggered our target is $30.60. We'll plan to exit ahead of the February earnings report. FYI: The P&F chart is very bullish with a $44 target.

Annotated chart:

Entry on  December xx at $xx.xx <-- TRIGGER @ 28.60
Change since picked:     + 0.00   			
Earnings Date          02/23/10 (unconfirmed)    
Average Daily Volume:      15.7 million 
Listed on  December 12, 2009