NEW BULLISH Plays

BioMarin Pharma. - BMRN - close: 35.85 change: +0.95

Stop Loss: 34.49
Target(s): 38.50
Current Gain/Loss: unopened
Time Frame: up to the Feb. 16th earning report
New Positions: Yes, see below

Company Description

Why We Like It:
BMRN is back! Last time we tried to trade this stock our play did not open. Now shares have spent more than a week consolidating under resistance near $36.00. Friday's outperformance (+2.7%) leaves it poised to break out past resistance again.

We want to open small bullish positions if BMRN can trade at $36.20 or higher. We'll use a stop loss at $34.49. Our target is $38.50. More aggressive traders could aim higher but we do not want to hold over the Feb. 16th earnings report.

FYI: The Point & Figure chart for BMRN is bullish with a long-term $47.50 target.

Breakout Trigger to buy @ $36.20 (small positions)

Suggested Position: buy stock @ 36.20

- or -

buy the Feb. $35 call (BMRN1218B35)

Annotated chart:

Entry on January xx at $ xx.xx
Earnings Date 02/16/12 (confirmed)
Average Daily Volume = 1.0 million
Listed on January 28, 2011


Eaton Corp. - ETN - close: 49.57 change: +0.64

Stop Loss: 47.45
Target(s): 54.75
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
ETN reported earnings this past week. The company missed by three cents and guided lower. Normally you would expect the stock to tank on a disappointing report like this. Yet shares only saw some minor selling on Thursday morning and have since rallied back toward resistance. ETN appears to have a trading range in the $47.50-50.00 zone.

I am suggesting bullish positions if ETN can trade at $50.25 or higher. We'll use a stop loss at $47.45 to start. Our multi-week target is $54.75.

FYI: The Point & Figure chart for ETN is bullish with a long-term $67 target.

Breakout Trigger to buy @ $50.25

Suggested Position: stock @ $50.25

- or -

buy the FEB $50 call (ETN1218B50) current ask $0.80

- or -

buy the APR $50 call (ETN1221D50) current ask $2.20

Annotated chart:

Entry on January xx at $ xx.xx
Earnings Date 01/26/12
Average Daily Volume = 3.7 million
Listed on January 28, 2011


Morgan Stanley - MS - close: 18.56 change: +0.41

Stop Loss: 17.75
Target(s): 21.90 (or 23.75)
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Tons of ink both real and digital have already been spilled about speculation and hype over the upcoming FaceBook IPO. Most believed it would happen in 2012 but suddenly there was news out late last week that FaceBook might actually start filing paperwork in a few days. It is believed that MS and GS will be fighting over the deal and may end up both brokering the IPO. It is estimated that FaceBook could reap upwards of $10 billion in capital for its initial offering, which could push the company's valuation to $100 billion.

It will undoubtedly be the largest IPO this year but don't expect MS or GS to get wealthy off of it. Rumors are floating around that the investment banks might do the deal for less just to get the prestige of handling the high-profile IPO. According to a Reuters article, investment banks normally charge about 7% for smaller IPOs and 2-to-3% for larger ones. Speculation is that MS or GS might offer to do it for just 1%. Of course 1% of $10 billion isn't chump change.

Looking at shares of MS the stock appears to have bottomed. Shares are now consolidating sideways under technical resistance at the simple and exponential 200-dma(s). I am suggesting we open bullish positions if MS can trade at $19.05 of higher. Our multi-week target $21.90 but more aggressive traders can aim for the $24.00 area instead.

FYI: If you are curious, FaceBook will start trading with the symbol: FB

Breakout trigger to buy @ $19.05

Suggested Position: buy MS stock @ $19.05

- or -

buy the FEB $20 call (MS1218B20)

- or -

buy the APR $20 call (MS1221D20)

Annotated chart:

Entry on January xx at $ xx.xx
Earnings Date 04/23/12 (unconfirmed)
Average Daily Volume = 25.5 million
Listed on January 28, 2011