NEW BULLISH Plays

Honeywell Intl. - HON - close: 54.65 change: +0.69

Stop Loss: 52.25
Target(s): 58.50
Current Gain/Loss: unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Industrial stock HON was upgraded this morning. This helped push shares past resistance near $54.00 and its simple 200-dma. After days of consolidation under this level we see today's move as a new entry point to launch bullish positions.

I am suggesting we buy HON or calls on the stock tomorrow morning but only if both HON and the S&P 500 index both open positive. We'll use a stop loss at $52.25 and aim for a move to $58.50. More aggressive traders could aim higher (near $60.00). FYI: The Point & Figure chart for HON is bullish with a $79 target.

*See Entry Details Above*

Suggested Position: buy the stock @ the open

- or -

buy the DEC $55 call (HON1117L55) current ask $1.87

Annotated chart:

Entry on November xx at $ xx.xx
Earnings Date 01/30/12 (unconfirmed)
Average Daily Volume = 5.3 million
Listed on November 8, 2011


Red Hat, Inc. - RHT - close: 50.53 change: -0.05

Stop Loss: 48.40
Target(s): 54.90
Current Gain/Loss: unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Shares of RHT were downgraded to a "neutral" this morning but the news didn't have much affect on the stock price. RHT is still trading inside the $49.00-51.00 trading range. I suspect the stock is poised to breakout highs thanks to its bullish trend of higher lows.

We are suggesting bullish positions on RHT at the open tomorrow but only if both RHT and the S&P 500 index open positive. More conservative traders may want to use a trigger above $51.00 as their entry point instead. Our target is $54.90.

*See Entry Details Above*

Suggested Position: buy the stock @ the open

- or -

buy the DEC $52.50 call (RHT1117L52.5) current ask $1.80

Annotated chart:

Entry on November xx at $ xx.xx
Earnings Date 12/21/11 (unconfirmed)
Average Daily Volume = 2.1 million
Listed on November 8, 2011