NEW BULLISH Plays

Bally Technologies - BYI - close 35.37 change +1.38 stop 32.30

Company Description:
Bally Technologies, Inc. is a gaming company that designs, manufactures, distributes and operates gaming devices and computerized monitoring and accounting and player-tracking systems for gaming devices. It also offers its customers a range of rental options. The Company also owns and operates the Rainbow Casino in Vicksburg, Mississippi. The Company operates in two business units: the Bally Gaming Equipment and Systems and the Rainbow Casino. The Bally Gaming Equipment and Systems segment consists of three primary revenue sources: Gaming Equipment, which includes the sale of gaming devices and related equipment, parts and conversion kits; Gaming Operations, which includes the operation of linked progressive systems, video lottery and centrally determined systems and the rental of gaming devices and content; and Systems, which includes the sale and support of computerized monitoring systems. Revenue from the casino operations is derived from the operation of the Rainbow Casino.

Target(s): 36.70, 37.50
Key Support/Resistance Areas: 37.50, 36.75, 35.75, 34.20, 32.50
Time Frame: Several Weeks

Why We Like It:
BYI broke out of a primary downtrend line today that began on 5/13. The stock closed +4% higher on the day but I expect a pullback with the broader market and suggest readers initiate long positions if BYI trades down to $34.30. The $34.30 is just above a resistance area from the past several weeks and there is also a newly formed upward trend line that should act as support if BYI retraces some of today's gains. I'm looking for BYI to trade up to its 50-day SMA which is above our first target of $36.70. If we get filled and BYI trades to our first target the gain would be just shy of +7%. Our stop will be $32.30 and it will be adjusted once we are in the position and have a better reference point to move it up.

Suggested Position: Long BYI stock if it trades to $34.30

Options Traders: September $35.00 CALL, current ask $2.30, estimated ask at entry $1.75

Annotated chart:

Entry on July xx
Earnings 8/12/10 (unconfirmed)
Average Daily Volume: 1.38 million
Listed on July 26, 2010


NEW BEARISH Plays

SPDR S&P 500 ETF - SPY - close 111.56 change +1.15 stop 113.55

Company Description:
SPDR S&P 500 ETF (the Trust), formerly SPDR Trust, Series 1, generally corresponds to the price and yield performance of the S&P 500 Index. The S&P 500 Index consists of 500 selected stocks, all of which are listed on the exchange, the NYSE or NASDAQ, and spans over 24 separate industry groups.

Target(s): 109.50, 108.60, 107.75
Key Support/Resistance Areas: 113.20, 111.65, 110.00, 109.50, 108.55
Time Frame: 1 to 2 weeks

Why We Like It:
SPY has rallied right into resistance and its 200-day SMA from below. This is a logical place for SPY to turn back lower towards its 50-day SMA. We are playing for a retracement which I think SPY will do prior to moving much higher. The bottom line is that SPY is need of healthy pullback before it can move much higher. I've chosen a stop of $113.55 which is above the June highs and the 100-day SMA.

Suggested Position: Short SPY stock

Options Traders: September $110.00 PUT, current ask $3.25

Annotated chart:

Entry on July xx
Earnings: N/A (unconfirmed)
Average Daily Volume: 236 million
Listed on July 26, 2010