NEW BULLISH Plays

ResMed Inc. - RMD - close: 34.64 change: -0.78

Stop Loss: 32.40
Target(s): 38.00
Current Gain/Loss: unopened
Time Frame: 8 to 10 weeks
New Positions: Yes, see trigger

Company Description:
ResMed is a leading developer, manufacturer and distributor of medical equipment for treating, diagnosing, and managing sleep-disordered breathing and other respiratory disorders. The company is dedicated to developing innovative products to improve the lives of those who suffer from these conditions and to increasing awareness among patients and healthcare professionals of the potentially serious health consequences of untreated sleep-disordered breathing. (source: company press release or website)

Why We Like It:
I've mentioned RMD before in an editor's note as a potential bullish candidate. Shares are starting to correct after surging to new all-time highs in December. Broken resistance near $34.00 should be new support. I am suggesting a trigger to launch bullish positions at $34.00 with a stop loss at $32.40. If triggered our multi-week target is $38.00.

Trigger to buy-the-dip @ $34.00

Suggested Position: Buy RMD stock @ $34.00

- or -

Buy the 2011 April $35.00 calls (RMD1116D35) current ask $2.05

Annotated chart:

Entry on January xx at $xx.xx
Earnings Date 02/03/11 (unconfirmed)
Average Daily Volume: 752 thousand
Listed on January 1st, 2010


Seagate Technology - STX - close: 15.03 change: +0.03

Stop Loss: 14.70
Target(s): 16.95, 17.75
Current Gain/Loss: unopened
Time Frame: 10 to 12 weeks
New Positions: Yes, see trigger

Company Description:
Seagate is the worldwide leader in hard disk drives and storage solutions (source: company press release or website)

Why We Like It:
STX has spent the last couple of months consolidating sideways after its big October gap higher. Shares are developing a bullish trend of higher lows and look ready to breakout over short-term resistance at $15.40. The 50-dma rising up and across the 200-dma is normally a bullish signal. Aggressive traders could launch positions now. I am suggesting a breakout trigger at $15.45. Our targets are $16.95 and $17.75. I anticipate this trade taking several weeks. However, STX is due to report earnings in about three weeks. Normally we do not want to hold over earnings. Conservative traders will want to exit ahead of the announcement.
FYI: The Point & Figure chart for STX is bullish with a long-term $28.50 target.

Trigger at $15.45

Suggested Position: Buy STX stock @ $15.45

- or -

Buy the 2011 February $15 calls (STX1119B15) current ask $0.91

Annotated chart:

Entry on January xx at $xx.xx
Earnings Date 01/20/11 (unconfirmed)
Average Daily Volume: 7.1 million
Listed on January 1st, 2010