NEW BULLISH Plays

Ryland Group - RYL - close: 23.25 change: +0.60

Stop Loss: 21.80
Target(s): 25.75
Current Gain/Loss: unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The company issued a press release this morning stating that 2012 April orders were up +37% from a year ago. The company's CEO Larry Nicholson said, "We are pleased that the sales momentum we experienced in the first quarter of 2012 carried over into April." This helped fuel a +2.6% gain in RYL. Several of the major homebuilding stocks were higher today. Shares of RYL look poised to breaokut from its two-week trading range.

I am suggesting a trigger to open small bullish positions at $23.60. We'll use a stop loss at 21.80, just under yesterday's low. We want to keep our position size small because the homebuilders can be so volatile. Our target is $25.75. FYI: The Point & Figure chart for RYL is bullish with a $34.50 target.

Trigger @ 23.60

Suggested Position: buy RYL stock @ (trigger)

- or -

buy the Jun $24 call (RYL1216F24) current ask $1.15

Annotated chart:

Entry on May xx at $ xx.xx
Earnings Date 07/25/12 (unconfirmed)
Average Daily Volume = 2.0 million
Listed on May 9, 2011


NEW BEARISH Plays

Hospira Inc. - HSP - close: 33.90 change: -0.20

Stop Loss: 34.25
Target(s): 30.25
Current Gain/Loss: unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
HSP is a specialty pharma and medication delivery company. Healthcare stocks have been underperforming lately. Shares of HSP have broken support near $34.00 and its 100-dma. Now it's on the verge of breaking down under its 150-dma.

Today's low was $33.26. I am suggesting a trigger to launch bearish positions at $33.20. If triggered we will aim for the $30.25 mark.

FYI: Readers should note that HSP does have above average short interest. The most recent data listed short interest at 7.8% of the 165 million share float.

Trigger @ 33.20

Suggested Position: short HSP stock @ (trigger)

- or -

buy the Jun $30 PUT (HSP1216R30) current ask $0.30

Annotated chart:

Entry on May xx at $ xx.xx
Earnings Date 07/26/12 (unconfirmed)
Average Daily Volume = 1.1 million
Listed on May 9, 2011