NEW BULLISH Plays

Gilead Sciences Inc. - GILD - close: 41.29 change: +0.52

Stop Loss: 39.75
Target(s): 44.75
Current Gain/Loss: + 0.0%
Time Frame: 8 to 9 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
GILD is a biotech stock that produced a bullish double bottom in late April. The stock has spent the last several days digesting the rally from early May. Now it looks like GILD is poised to breakout from this consolidation. More conservative traders may want to wait for a rally past $42.00 before initiating positions. I am suggesting bullish positions now with a stop loss at $39.75. The spring highs near $43 could be resistance but I'm setting our target at $44.75. FYI: The Point & Figure chart for GILD is bullish with a $57 target.

Suggested Position: buy GILD stock @ current levels

- or -

Buy the June $41 calls (GILD1118F41) current ask $1.44

Annotated chart:

Entry on May 13 at $xx.xx
Earnings Date 07/19/11 (unconfirmed)
Average Daily Volume: 10.9 million
Listed on May 12th, 2011


Semiconductor HOLDRs - SMH - close: 36.75 change: +0.38

Stop Loss: 35.49
Target(s): 39.95
Current Gain/Loss: unopened
Time Frame: 8 to 12 weeks
New Positions: Yes, see trigger

Company Description

Why We Like It:
The action in the semiconductor sector is improving. Many of the individual stocks look poised to rally. However, instead of choosing an individual name that might be subject to headline risk or downgrades I am suggesting bullish positions on the SMH. Readers may want to go ahead and launch positions now but I see short-term resistance at $37.00. I'm suggesting a trigger to open bullish positions at $37.05. If triggered we'll use a stop loss at $35.49. The SMH doesn't move very fast so it could take several weeks for this play to work out. Our first target is $39.95. The Point & Figure chart for SMH is bullish with a $61 target.

FYI: The top ten components in the SMH are: TXN, INTC, AMAT, ALTR, ADI, LLTC, XLNX, KLAC, BRCM, and ATML.

Trigger @ 37.05

Suggested Position: buy the SMH @ $37.05

- or -

Buy the August $40 calls (SMH1120H40) current ask $0.61

Annotated chart:

Entry on May x at $xx.xx
Earnings Date --/--/--
Average Daily Volume: 9.8 million
Listed on May 12th, 2011