Editor's Note:

In addition to tonight's new candidate, consider these stocks as possible trades:

FAST, MMR, JAZZ, CBST, COV, TYC, TLAB, FLO, and DF

-James


NEW BULLISH Plays

Bristol-Myers Squibb - BMY - close: 30.62 change: -0.33

Stop Loss: 28.90
Target(s): 33.50
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
BMY surged to new 52-week highs a couple of days ago. This morning the stock was upgraded to a "buy" from Goldman Sachs, which probably helped limit today's losses to just -1.0%. Traders bought the dip near BMY's rising 10-dma.

Big cap drug stocks are old fashioned safe-haven trades. While nothing is guaranteed to go up when the market drops (not counting inverse ETFs or put options) the big cap drug stocks will likely outperform during market turmoil. Shares of BMY still have a bullish trend and we want to take advantage of the pull back.

I am suggesting small bullish positions now but we only want to open positions if both BMY and the S&P 500 index both open positive tomorrow morning. We'll start with a stop loss at $28.90. More conservative traders may want to use a stop near the $30.00 level instead.

*See Entry Details Above*

Suggested Position: buy BMY stock @ the open

- or -

buy the 2012 Jan. $30 call (BMY1221A30) current ask $2.04

Annotated chart:

Entry on September xx at $ xx.xx
Earnings Date 10/26/11 (unconfirmed)
Average Daily Volume = 13.6 million
Listed on September 22, 2011


Energy XXI Ltd. - EXXI - close: 21.59 change: -1.30

Stop Loss: 20.85
Target(s): 25.00
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
EXXI is a volatile oil services stock with a high amount of short interest. If the market can bounce from its August lows then EXXI should outperform. I am suggesting small bullish positions now but only if EXXI and the S&P 500 index both open positive tomorrow morning. We'll use a stop loss at $20.85, which is under both today's low and under the August lows. Our first target is $25.00.

NOTE: Technically you could argue that EXXI has broken down from a pennant-shaped consolidation pattern. That's bearish. We want to keep our position size pretty small to limit our risk.

*See Entry Details Above*

Suggested Position: buy EXXI stock @ the open

- or -

buy the OCT $23 call (EXXI1122J23) current ask $1.30

Annotated chart:

Entry on September xx at $ xx.xx
Earnings Date 10/26/11 (unconfirmed)
Average Daily Volume = 983 thousand
Listed on September 22, 2011


iShares Russell 2000 ETF - IWM - close: 64.73 change: -1.86

Stop Loss: 62.95
Target(s): 69.75
Current Gain/Loss: unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Technically the picture looks pretty bearish for the market's major indices and the Russell 2000 small cap index is no different. However, the Russell did tag its August lows and bounce. Well, actually it hit a new relative low and bounce. This looks like a chance for a buy-the-bounce from support trade on the IWM.

We do want to keep our position size small to limit our risk. I am suggesting small positions now with a stop loss at $62.95. Our first target is $69.75.

Suggested Position: buy the IWM @ the open

- or -

buy the NOV $68 call (IWM1119K68) current ask $2.82

Annotated chart:

Entry on September 23 at $ xx.xx
Earnings Date --/--/--
Average Daily Volume = 76.7 million
Listed on September 22, 2011


U.S. Oil ETF - USO - close: 31.13 change: -1.79

Stop Loss: 29.90
Target(s): 34.50
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Growing worries over a global economic slow down sent everything lower today, including oil. That's not surprising. Another recession means less demand for oil. Yet we suspect the move is overdone, at least short-term.

We want to launch small bullish positions now on the USO but only if the USO and the S&P 500 index both open higher tomorrow. If triggered we'll place our stop under the August low and aim for a bounce to $34.50.

*See Entry Details Above*

Suggested Position: buy the USO @ the open

- or -

buy the NOV $32 call (USO1119K32) current ask $2.00

Annotated chart:

Entry on September xx at $ xx.xx
Earnings Date --/--/--
Average Daily Volume = xxx million
Listed on September 22, 2011