Editor's Note:

In addition to tonight's new candidate, consider these stocks as possible trading ideas and watch list candidates:

(bullish candidates) DKS, FAST, ALTR, INTC, CSX, WFR, HD, JJC, UYM


NEW BULLISH Plays

Discover Financial Services - DFS - close: 28.22 change: +0.47

Stop Loss: 26.95
Target(s): 31.50
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Credit-card related stocks are in rally mode thanks to the recent earnings report from MasterCard (MA). Rival Visa (V) reports earnings on Feb. 8th. The trend is clearly higher for the group. DFS just spent several days consolidating under resistance near $28.00. Friday's move marks a breakout to new multi-year highs.

I am suggesting new bullish positions at the open on Monday but only if both DFS and the S&P 500 open positive. We'll use a stop loss at $26.95. Our multi-week target is $31.50.

Do not enter position unless DFS and the S&P 500 are both positive at the open

Suggested Position: buy DFS stock @ the open

- or -

buy the MAR $28 call (DFS1217C28) current ask $1.15

Annotated chart:

Weekly chart:

Entry on February xx at $ xx.xx
Earnings Date 03/22/12 (unconfirmed)
Average Daily Volume = 6.2 million
Listed on February 04, 2011


Metals & Mining ETF - XME - close: 56.77 change: +0.96

Stop Loss: 53.95
Target(s): 64.75
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
With the market in rally mode we could see the metal and mining stocks accelerate higher as they try to catch up with the rest of the market. This past week saw the XME breakout past resistance near $56.00 and its exponential 200-dma. I am suggesting we open small bullish positions at the start of trading on Monday but only if both XME and the S&P 500 open positive. I do consider this an aggressive, higher-risk trade. The XME could still have resistance at its simple 200-dma near $58.50 and price resistance near the $60.00 level.

We will need some patience for this trade to pay off. Our multi-week target is $64.75. FYI: The Point & Figure chart for XME is bullish with a long-term $76 target.

Do not enter position unless XME and the S&P 500 are both positive at the open

(small positions)

Suggested Position: buy XME @ the open

- or -

buy the MAR $60 call (XME1217C60) current ask $1.01

Annotated chart:

Entry on February xx at $ xx.xx
Earnings Date --/--/--
Average Daily Volume = 3.2 million
Listed on February 04, 2011