NEW BULLISH Plays

Beazer Homes - BZH - close: 2.20 change: +0.00

Stop Loss: 1.84
Target(s): 3.25
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Investor attitudes toward the homebuilders are improving. The industry is still suffering a very slow market but traders could be betting that all the bad news has been priced in. In recent weeks some of the homebuilders have produced a significant bottom and a breakout higher.

We are suggesting investors buy BZH. We're listing an entry point for Monday morning but readers could wait for a dip back toward the $2.00 level instead. This group can be volatile so we're using a wide stop loss.

Tonight I am listing a very high target at $3.25 but I anticipate scaling that down. This is sort of a just-in-case BZH delivers better than expected earnings and the stock explodes kind of target. This industry is very heavily shorted so a short squeeze is a definite possibility.

Please note we are going to take the unusual step and hold over BZH's earnings in November. Normally we try to always exit ahead of earnings to avoid holding over the announcement.

FYI: You could buy calls but the spreads are so wide they could actually increase your risk (but they'll definitely leverage any move higher).

*open positions now*

Suggested Position: buy BZH stock @ the open

- or -

buy the 2012 Jan $3.00 call (BZH1221A3) bid/ask $0.10/0.20

Annotated chart:

Entry on October 31 at $ xx.xx
Earnings Date 11/15/11 (confirmed)
Average Daily Volume = 2.4 million
Listed on October 29, 2011


Juniper Networks - JNPR - close: 24.81 change: -0.11

Stop Loss: 22.75
Target(s): 29.00
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Networking stock JNPR appears to have bottomed. The stock rallied past multiple layers of resistance. On a short-term basis the stock is overbought and at resistance near the bottom of its July gap down.

We are suggesting readers launch small bullish positions at $24.00 with a stop loss at $22.75. More conservative traders will want to consider waiting for a dip near $23.00 or even its simple 10-dma before initiating new bullish positions. Meanwhile aggressive traders will want to consider placing their stop loss under $22.00, which should be support. We want to keep our position size small to limit our risk. FYI: The Point & Figure chart for JNPR is bullish with a $41 target.

buy the dip trigger @ 24.00 (small positions)

Suggested Position: buy JNPR stock @ $24.00

- or -

buy the JAN $25 call (JNPR1221A25) current ask $2.21

10/29 alternative entry point: dip at $23.00

Annotated chart:

Entry on October xx at $ xx.xx
Earnings Date 10/18/11
Average Daily Volume = 13 million
Listed on October 29, 2011


Xilinx Inc. - XLNX - close: 33.19 change: +0.06

Stop Loss: 31.40
Target(s): 35.75
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The semiconductor stocks have helped lead the market higher. We suspect that trend will continue. Yet short-term the sector is overbought and due for a dip. XLNX should have support at its 200-dma near $32.50. I am suggesting we open small bullish positions on a dip at $32.50 with a stop loss at $31.40. More conservative traders may want to wait for a dip closer to $32.00 as their entry point instead.

Our multi-week target is $35.75. FYI: The Point & Figure chart for XLNX is bullish with a $46 target.

buy-the-dip trigger @ 32.50 (small positions)

Suggested Position: buy XLNX stock @ 32.50

- or -

buy the Jan $35 call (XLNX1221A35) current ask $1.03

Annotated chart:

Entry on October xx at $ xx.xx
Earnings Date 10/19/11
Average Daily Volume = 5.0 million
Listed on October 29, 2011