NEW BULLISH Plays

Dr.PepperSnapple Group - DPS - close: 35.72 chg: +1.35 stop: 32.49

Company Description:
Dr Pepper Snapple Group (NYSE: DPS) is one of the largest beverage companies in the Americas. We manufacture, market and distribute more than 50 brands of carbonated soft drinks, juices, ready-to-drink teas, mixers and other premium beverages across the United States, Canada, Mexico and the Caribbean. Our diverse portfolio includes Dr Pepper, Snapple, 7UP, Mott’s, A&W, Sunkist Soda, Canada Dry, Hawaiian Punch, Schweppes, Peñafiel, Squirt, Clamato, Mr & Mrs T Mixers, Rose’s, Yoo-hoo and other consumer favorites. (source: company press release or website)

Why We Like It:
DPS is a simple relative strength trade. The stock has been climbing this past week while the rest of the market was sinking. Investors took a positive spin on the company's recent earnings report and DPS rallied 3.9% on Friday. After several weeks of slowly consolidating lower and sideways DPS could be poised to rally again. It's obviously marching to the beat of its own drum since Thursday's the stock was moving higher not lower.

I think DPS will pull back to the $35.00-34.50 zone before moving higher. Therefore I'm suggesting a trigger to open positions at $35.00 with a stop loss at $32.49. I would still keep your position size small since the market has been so volatile. There is some resistance near $36.80 but our target is $39.00.

Trigger @ 35.00

Suggested Position: stock @ 35.00

Annotated chart:

Entry on May xx at $xx.xx
Earnings Date 05/06/10
Average Daily Volume: 7.4 million
Listed on May 8th, 2010


Wells Fargo - WFC - close: 30.82 change: -0.36 stop: 27.45

Company Description:
Wells Fargo & Company is a diversified financial services company with $1.2 trillion in assets, providing banking, insurance, investments, mortgage, and consumer and commercial finance through more than 10,000 stores and 12,000 ATMs and the Internet (wellsfargo.com and wachovia.com) across North America and internationally. (source: company press release or website)

Why We Like It:
The banking stocks look like a buy. It's true the sector is facing potential challenges with financial reform in Washington but thus far the fear of reform has not had much affect on the stock price. WFC has seen a normal 10% correction and is testing support in the $29-30 zone. The stock bounced from its 100-dma near $29.30 on Thursday. I believe WFC will retest the $29.50-29.00 zone again before moving higher. Therefore I'm suggesting a trigger to open bullish positions in WFC at $29.50 with a stop loss at $27.45. If triggered our target is $33.50. We want to keep our positions small to limit our risk. More conservative traders may want to use a tighter stop loss near the 200-dma.

Trigger @ 29.50

Suggested Position: stock @ 29.50

Annotated chart:

Entry on May xx at $xx.xx
Earnings Date 07/22/10 (unconfirmed)
Average Daily Volume: 51 million
Listed on May 8th, 2010