NEW BULLISH Plays

PowerShares Gold Double Long - DGP - close: 53.99 change: -7.03

Stop Loss: 51.45
Target(s): 59.00, 64.00
Current Gain/Loss: +0.0%
Time Frame: 8 to 10 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
How many investors have been praying for a pull back in gold so they can hop on board? The sell-off this past week was pretty dramatic but part of it was fueled by fears of a margin hike. Those fears proved to be correct. After the closing bell on Friday the CME raised margin requirements by 21%. The sell-off has already occurred so gold could rally on Monday.

Short-term gold could see a lot of volatility but long-term the trend is higher. U.S. debt and the need to print dollars will keep gold in an up trend and eventually Greece will default, which will drive more money into the "safety" of gold. Personally, I agree with legendary trader Dennis Gartman who says gold moves way too fast to be considered a safe haven investment.

After last week's plunge gold looks oversold and I suspect it will bounce. You could trade the GLD gold ETF, which is currently at $160 a share. Or you can try to get more bang for your buck with the DGP double-long ETF. I am suggesting small bullish positions on the DGP now (Monday morning). We want to keep our position size small because the DGP can be volatile and there is still a chance that precious metals dip on Monday due to the margin hike.

I am suggesting a stop loss at $51.45. If we get stopped out we might try buying the dip again near $50.00 or its 200-dma. Our targets are $59.00 and $64.00.

- Small Positions -

Suggested Position: buy the DGP @ the open

Annotated chart:

Entry on September xx at $ xx.xx
Earnings Date --/--/--
Average Daily Volume = 1.3 million
Listed on September 24, 2011


Human Genome Sciences Inc. - HGSI - close: 14.21 change: +0.67

Stop Loss: 12.89
Target(s): 16.25, 17.50
Current Gain/Loss: unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
HGSI has been outperforming the market for two weeks now. Shares are up +28% from its $11.05 low on September 12th. Traders bought the dip near $13.00 this past week. On Wednesday the stock rallied sharply on positive news that its new lupus drug Benlysta was selling better than expected.

I am suggesting small bullish positions now but only if HGSI and the S&P 500 index both open positive on Monday morning. There is potential resistance near $15.50 and near its 50-dma but I am setting our targets at $16.25 and at $17.50.

*See Entry Point Details Above* (Small Positions)

Suggested Position: buy HGSI @ the open

- or -

buy the OCT $15 call (HGSI1122J15) current ask $0.90

Annotated chart:

Entry on September xx at $ xx.xx
Earnings Date 10/27/11 (unconfirmed)
Average Daily Volume = 4.8 million
Listed on September 24, 2011


Red Hat Inc. - RHT - close: 42.32 change: +0.83

Stop Loss: 39.75
Target(s): 46.50, 48.00
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
RHT is a tech stock that is bucking the market's trend. Shares are breaking out from a sideways consolidation following its earnings report last week. The company reported earnings on September 21st. RHT delivered 28 cents a shares versus estimates for 25 cents. Revenues were also better than expected and management guided its 2012 numbers higher.

RHT's gain last week pushed it past resistance near $42 and its 100-dma. There is still potential resistance at the 200-dma near $43.00 but I am suggesting bullish positions now. We want to buy RHT (or call options) at the open on Monday but only if shares of RHT and the S&P 500 index both open positive.

Last week's low was $39.77. I am setting our stop at $39.75. Our target is $46.50 and $48.00.

*See Entry Point Details Above*

Suggested Position: Buy RHT stock @ the open

- or -

buy the OCT $45 call (RHT1122J45) current ask $1.40

Annotated chart:

Entry on September xx at $ xx.xx
Earnings Date 12/21/11 (unconfirmed)
Average Daily Volume = 2.7 million
Listed on September 24, 2011