Editor's Note:

There is no shortage of bullish candidates with the stock market in rally mode. Several stocks caught my eye this weekend but most of these need to see some sort of pull back before I would consider new bullish positions. On my watch list is: A, ALEX, JEF, SNDK, PAAS, WY, XLF, DBRN, JRCC.

- James


NEW BULLISH Plays

City National Corp. - CYN - close: 56.74 change: +0.53

Stop Loss: 52.95
Target(s): 58.00, 60.00+
Current Option Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Company Description

Why We Like It:
I am very encouraged by the rebound in the banking sector. Dow Theory suggests we can't have a sustained market rally without participation in the banks. On a short-term basis the group looks a little bit overbought given this past week's surge higher. That's why we want to look for a dip in CYN. Honestly, I'm tempted to buy the stock or buy call options now but the banking indices are due for a little pull back. Focusing on CYN I'm suggesting we use a trigger to open bullish positions at $55.50. We'll start the play with a stop loss at $52.95. Our first target to take profits is $58.00, just under the July-August highs. Our final target will be somewhere in the $60-62 zone. FYI: The Point & Figure chart is bullish with a $68 target.

Trigger @ $55.50

Suggested Position: buy CYN stock @ $55.50

- or -

Buy the 2011 February $60 calls (cyn1119B60) current ask $1.90*

*Caution: most of the option spreads on CYN seem a little too wide. I consider the options a more aggressive trade. You may want to keep your position size small.

Annotated chart:

Entry on December xx at $xx.xx
Earnings Date 01/27/11 (unconfirmed)
Average Daily Volume: 223 thousand
Listed on December 4th, 2010


Trimble Navigation - TRMB - close: 40.03 change: +1.19

Stop Loss: 36.40
Target(s): 41.00, 43.00
Current Option Gain/Loss: unopened
Time Frame: 8 to 10 weeks
New Positions: Yes, see trigger

Company Description

Why We Like It:
TRMB just hit new two-year highs on strong volume. The stock spent most of October and a good portion of November consolidating sideways so it should be rested and ready for another leg higher. If the market continues to climb the tech sector should continue to outperform. TRMB just broke out past resistance near $38.00 and surged to the $40 level. On a short-term basis shares look a little bit overbought. I am suggesting we wait for a dip to $38.50 and then open positions. If triggered we'll use a stop loss at $36.40. Our first target is $41.00. FYI: The Point & Figure chart is bullish with a $65 target for TRMB.

Trigger @ $38.50

Suggested Position: Buy TRMB stock @ $38.50

- or -

Buy the 2011 February $40.00 calls (TRMB1119B40) current ask $2.35

Annotated chart:

Entry on December xx at $xx.xx
Earnings Date 02/02/11 (unconfirmed)
Average Daily Volume: 435 thousand
Listed on December 4th, 2010