NEW BULLISH Plays

Cirrus Logic - CRUS - close: 27.45 change: +0.29

Stop Loss: 26.35
Target(s): 32.00
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
CRUS is in the specialty semiconductor industry. The company gets the majority of its revenues by selling audio chip solutions to Apple Inc. (AAPL). The good news is that AAPL's growth is bullish for CRUS. The challenge is that any negative headlines for AAPL could negatively impact CRUS.

Right now CRUS is showing strength and poised to breakout past resistance near $28.00 and hit new ten-year highs. I am suggesting a trigger to launch positions at $28.35. with a stop loss at $26.35.

Trigger @ 28.35

Suggested Position: buy CRUS stock @ (trigger)

- or -

buy the Jul $30 call (CRUS1221G30) current ask $1.45

Annotated chart:

Entry on May xx at $ xx.xx
Earnings Date 07/19/12 (unconfirmed)
Average Daily Volume = 2.4 million
Listed on May 26, 2011


NEW BEARISH Plays

Silicon Motion Tech. - SIMO - close: 13.42 change: +0.16

Stop Loss: 14.15
Target(s): 10.25
Current Gain/Loss: unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
SIMO reported a pretty good earnings report in late April. Yet investors sold the news due to cautious corporate guidance. They actually sold it pretty hard with shares falling from $21 to almost $13 in less than two weeks. Now traders are selling the bounces and SIMO is forming a bearish consolidation pattern with support near $13.00.

The path of least resistance is now down. We want to wait for a breakdown. I am suggesting a trigger to open bearish positions at $12.85. If triggered we'll use a stop loss at $14.15. Our exit target is $10.25.

Trigger @ 12.85

Suggested Position: short SIMO stock @ (trigger)

- or -

buy the Jun $15 PUT (SIMO1216R15) current ask $1.95

Annotated chart:

Entry on May xx at $ xx.xx
Earnings Date 07/26/12 (unconfirmed)
Average Daily Volume = 819 thousand
Listed on May 26, 2011