NEW BULLISH Plays

Electronic Arts Inc. - ERTS - close: 24.41 change: +0.51

Stop Loss: 23.25
Target(s): 26.25, 28.00
Current Gain/Loss: + 0.0%
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
You could certainly argue that ERTS looks overbought here and I would probably agree with you. Yet ERTS spent two weeks consolidating its gains under the $24.00 level of resistance. There was plenty of opportunity for investors to take profits and sell the stock with the market falling four weeks in a row and that didn't happen. Thus today's breakout past resistance looks like a new bullish entry point.

I am suggesting that we keep our position size small to limit our risk. We'll start with a stop loss at $23.25. Our targets are $26.25 and $27.00.

- Small Positions -

Suggested Position: buy ERTS stock @ current levels

- or -

buy the July $25 call (ERTS1116G25) current ask $0.77

Annotated chart:

Entry on June 1 at $xx.xx
Earnings Date 08/02/11 (unconfirmed)
Average Daily Volume: 5.8 million
Listed on May 31st, 2011


Lennar Corp. - LEN - close: 18.98 change: +0.08

Stop Loss: 18.15
Target(s): 21.00
Current Gain/Loss: + 0.0%
Time Frame: 8 to 9 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The real estate market is still suffering from serious problems and yet the homebuilders have been able to rally in spite of all the bad news. The last few days have seen a bullish breakout for many stocks in this industry. LEN rallied past resistance at its 50-dma and its trendline of lower highs last week. Traders bought the dip today near the 50-dma intraday. In spite of my concerns about the long-term outlook for real estate the technical picture for stocks like LEN have turned bullish.

I am suggesting bullish positions now but we want to keep our position size small to limit our risk. We'll start with a stop loss at $18.15. Our target is $21.00. FYI: The Point & Figure chart for LEN is bullish with a $26 target.

- Small Positions -

Suggested Position: buy LEN stock @ current levels

- or -

buy the July $20 call (LEN1116G20) current ask $0.49

Annotated chart:

Entry on June 1 at $xx.xx
Earnings Date 06/23/11 (unconfirmed)
Average Daily Volume: 3.4 million
Listed on May 31st, 2011