Editor's Note:

We did see a LOT of bullish reversals today. I looked through the S&P500 components and nearly 50% of them had produced a bullish engulfing (reversal) candlestick pattern. Normally these patterns need to see confirmation but the widespread nature of the reversal is definitely bullish.

-James


NEW BULLISH Plays

Broadcom Corp. - BRCM - close: 33.31 change: +1.19

Stop Loss: 31.75
Target(s): 36.25
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Technology stocks experienced a big reversal higher today. BRCM participated with a +6% rebound off its intraday lows. This is essentially a bounce from the bottom of BRCM's trading range. The stock never broke down under its June and August lows. We see today's rebound as an opportunity to go long BRCM.

Aggressive traders will want to place their stop under today's low (31.39). I am suggesting a stop loss at $31.75, under the afternoon low. Our target is $36.25. Please note that we do not want to open positions unless both BRCM and the S&P 500 index both open positive tomorrow morning.

*See Entry Point Details Above*

Suggested Position: buy BRCM stock @ the open

- or -

buy the OCT $34 call (BRCM1122J34) current ask $1.10

Annotated chart:

Entry on October xx at $ xx.xx
Earnings Date 10/25/11 (unconfirmed)
Average Daily Volume = 9.3 million
Listed on October 04, 2011


UnitedHealth Group - UNH - close: 42.78 change: -0.14

Stop Loss: 41.25
Target(s): 46.50
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
UNH is a healthcare stock. Shares are very short-term oversold and traders are buying the dip near support at its August lows. The late day bounce looks like an entry point for short-term bullish positions. Conservative traders may want to exit near the 200-dma around $46.00. I am suggesting a target at $46.50. We'll place our stop loss under today's low at $41.25. Please note that we do not want to open position unless both UNH and the S&P 500 index both open positive tomorrow morning.

*See Entry Point Details Above*

Suggested Position: buy UNH stock @ the open

- or -

buy the OCT $43 call (UNH1122J43) current ask $1.82

Annotated chart:

Entry on October xx at $ xx.xx
Earnings Date 10/18/11 (confirmed)
Average Daily Volume = 8.9 million
Listed on October 04, 2011