NEW BULLISH Plays

Cisco Systems - CSCO - close: 20.15 change: -0.37

Stop Loss: 19.75
Target(s): 22.25, 23.75
Current Gain/Loss: +0.00%
Time Frame: 6 to 8 weeks
New Positions: Yes

Company Description:
Cisco, (NASDAQ: CSCO), the worldwide leader in networking that transforms how people connect, communicate and collaborate, this year celebrates 25 years of technology innovation, operational excellence and corporate social responsibility. (source: company press release or website)

Why We Like It:
CSCO reported earnings last week and the company guided its Q2 revenues under Wall Street's expectations. Investors hammered the stock on Thursday with a massive gap down. CNBC called its CSCO's biggest one-day loss in 16 years. It looks like all the bad news has been priced in. I suspect that CSCO will test the August 2010 low near $19.82 and bounce. I'm suggesting bullish positions now. We can use a stop loss at $19.45 (more cautious traders could use a stop at $19.75).

Our targets are $22.25 and $23.75.

Suggested Position: Buy CSCO stock at current levels.
- or
Buy the 2011 January $20.00 calls (symbol: CSCO1122A20) current ask $1.19

Annotated chart:

Entry on November 15 at $xx.xx
Earnings Date 02/03/11 (unconfirmed)
Average Daily Volume: 72 million
Listed on November 13th, 2010


Onyx Pharmaceuticals - ONXX - close: 29.72 change: -0.19

Stop Loss: 26.45
Target(s): 32.00, 34.50
Current Gain/Loss: unopened
Time Frame: 8 to 10 weeks
New Positions: Yes, see trigger

Company Description:
Onyx Pharmaceuticals, Inc. is a biopharmaceutical company committed to improving the lives of people with cancer. The company, in collaboration with Bayer HealthCare Pharmaceuticals Inc., is developing and marketing Nexavar® (sorafenib) tablets, a small molecule drug that is currently approved for the treatment of liver cancer and advanced kidney cancer. Additionally, Nexavar is being investigated in several ongoing trials in a variety of tumor types. Beyond Nexavar, Onyx has established a development pipeline of anticancer compounds at various stages of clinical testing, including carfilzomib, a next-generation proteasome inhibitor, that is currently being evaluated in multiple clinical trials for the treatment of patients with relapsed or relapsed/refractory multiple myeloma and solid tumors. ONX 0801, an alpha-folate receptor targeted inhibitor of thymidylate synthase, and ONX 0912, an oral proteasome inhibitor, are currently in Phase 1 testing (source: company press release or website)

Why We Like It:
Biotech stocks are always higher-risk trades. You never know when a drug test or clinical trial result will turn out worse than expected or if the FDA will delay or deny a drug's approval. Any of these events can send a stock plunging. Of course these news events can go both ways. Keep that in mind as you consider bullish positions. Currently ONXX looks bullish with a breakout past resistance near $28.00. The stock looks ready to correct and should find support near $28.00-28.50. I'm suggesting we launch bullish positions on a dip at $28.60. use a stop loss at $26.45.

Suggested Position: Buy ONXX stock @ 28.60

Annotated chart:

Entry on November xx at $xx.xx
Earnings Date 02/23/11 (unconfirmed)
Average Daily Volume: 1.1 million
Listed on November 13th, 2010