NEW BULLISH Plays

Popular Inc. - BPOP - close: 3.11 change: +0.11

Stop Loss: 2.69
Target(s): 3.40, 3.95
Current Option Gain/Loss: unopened
Time Frame: 12 to 16 weeks
New Positions: Yes, see trigger

Company Description:
Popular, Inc., a Nasdaq-listed [BPOP], full-service financial services provider with operations in Puerto Rico, the United States, the Caribbean and Latin America. Founded in 1893, Popular is the leading banking institution by both assets and deposits in Puerto Rico and ranks 33th by assets among U.S. banks. (source: company press release or website)

Why We Like It:
If you have been following the market this past you undoubtedly know that financials were one of the best performers. Shares of BPOP finally started participating in the sector rally. Shares broke out past major resistance near $3.00 on Friday. There were a couple of headlines highlighting what appears to be a big investors launching a bull-put spread on the stock.

After months of consolidating sideways under $3.00 this breakout could herald a new leg higher. While we could launch positions now the banks look overbought and due for some profit taking. I am suggesting we wait to launch new positions at $3.00. Cautious traders could wait for a dip to $2.95 or even $2.90. We'll start with a stop loss at $2.69 since BPOP should have support at $2.75. If triggered our first target is $3.40. Our second, much longer-term target is $3.90.

Buy the Dip trigger @ $3.00

Suggested Position: Buy BPOP stock @ $3.00

- or -

Buy the 2011 April $3.00 calls (BPOP1116D3) current ask $0.36

Annotated chart:

Entry on December xx at $xx.xx
Earnings Date 01/20/11 (unconfirmed)
Average Daily Volume: 11.7 million
Listed on December 11th, 2010


SAKS Inc. - SKS - close: 11.92 change: +0.33

Stop Loss: 10.90
Target(s): 13.95, 14.95
Current Option Gain/Loss: unopened
Time Frame: 10 to 12 weeks
New Positions: Yes

Company Description

Why We Like It:
Consumer confidence is improving and investors are growing a lot more comfortable with the idea of a rebound in consumer spending. We're hearing more positive news about sales growth and analysts are turning more optimistic about the high-end consumer, especially since the stock market's gains help make people feel wealthier. Normally I would prefer to wait for a dip but SKS is just starting to breakout from a multi-week consolidation. I'm suggesting bullish positions now. Readers may want to start small and slowly build up a full-sized position. We'll use a stop loss at $10.90.

Suggested Position: Buy SKS stock @ current levels.

- or -

Buy the 2011 February $12.50 calls (SKS1119B12.5) current ask $0.80

Annotated chart:

Entry on December 13 at $xx.xx
Earnings Date 02/22/11 (unconfirmed)
Average Daily Volume: 3.1 million
Listed on December 11th, 2010