Editor's Note:

It's going to be an interesting week with a flood of earnings and the debt ceiling tussle. Cautious traders may want to step back and not trade or at least scale back and trade very small. Headlines concerning the debt ceiling talks could roil the markets up or down on a daily basis. On top of that earnings will produce waves of headlines and plenty of volatility for individual stocks.

We're adding some bullish candidates but enter cautiously!

- James


NEW BULLISH Plays

China Sunergy Co. Ltd. - CSUN - close: 1.64 change: +0.08

Stop Loss: 1.48
Target(s): 2.00, 2.25
Current Gain/Loss: unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
If you have been following the solar energy stocks then you already know that most of them had a terrible quarter. Shares of solar energy ETFs like TAN and KWT are stuck in a bearish trend of lower highs and lower lows. What is interesting is that both seem like they may have found a bottom near their 2010 lows. One stock that has seen an accelerated decline lower is CSUN. Yet shares found support at $1.50 last month and traders bought the dip at $1.50 again this past week. We could be witnessing a bullish double bottom.

I am suggesting we do some bottom fishing here and buy CSUN now with a stop loss at $1.48. We should consider this an aggressive, higher-risk trade given the trend lower so trade small. Our first target is $2.00. I would expect some resistance at the 50-dma. Our final target is $2.25 but we do not want to hold over the earnings report in mid August.

Suggested Position: buy CSUN stock @ current levels

Annotated chart:

Entry on July 25 at $ xx.xx
Earnings Date 08/15/11 (unconfirmed)
Average Daily Volume = 325 thousand
Listed on July 23, 2011


Sandridge Energy, Inc. - SD - close: 12.11 change: +0.84

Stop Loss: 11.20
Target(s): 13.20, 13.90
Current Gain/Loss: + 0.0%
Time Frame: 2 to 3 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
SD is an oil and natural gas company. Shares have been consolidating sideways for weeks. It would have been nice to catch the bounce near $11.00 last week. Shares have broken out through the trendline of lower highs. Now the short covering (squeeze?) has pushed SD right to resistance at its late May high. Normally I would expect a pull back at this resistance and hope to launch bullish positions on a dip in the $11.70-11.50 area. The $11.50 level should be short-term support. However, the most recent data listed short interest at almost 10% of SD's 346 million-share float. That means this rally could keep going.

I am suggesting bullish positions now. If we're lucky, SD will produce a dip on Monday morning that we can buy. I'll plan on adding some calls to this trade if we do see a dip or a bounce in the $11.75-11.50 area. Please note that we do not want to hold over the August 4th earnings report so we don't have much time. FYI: The Point & Figure chart for SD is bullish with a long-term target at $31.

Suggested Position: buy SD stock @ current levels

- or -

We will look at buying calls on a dip near $11.60ish.

Annotated chart:

Entry on July 25 at $ xx.xx
Earnings Date 08/04/11 (unconfirmed)
Average Daily Volume = 12.1 million
Listed on July 23, 2011