NEW BULLISH Plays

Idenix Pharmaceuticals - IDIX - close: 9.04 change: +0.00

Stop Loss: 8.49
Target(s): 11.50
Current Gain/Loss: unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
IDIX is a biotech firm focused on treating types of hepatitis. While the stock has not been immune to the market's recent weakness IDIX has managed to maintain its rather bullish pattern. Shares appeared to build a bullish double bottom with the lows in April and May. Now traders bought the dip this past week near the 50-dma and 200-dma. If there is any bounce in the market shares of IDIX could see a short squeeze. The most recent data listed short interest at 18.4% of the 55.5 million share float.

I am suggesting a trigger to open bullish positions at $9.25 with a stop loss at $8.49. That's a wide stop to start and we'll try and narrow it once the trade is opened. Our multi-week target is $11.50. FYI: The Point & Figure chart for IDIX is bullish with a $15.50 target.

Trigger @ 9.25

Suggested Position: buy IDIX stock @ (trigger)

- or -

buy the Jul $10 call (IDIX1221G10) current ask $1.30

Annotated chart:

Entry on June xx at $ xx.xx
Earnings Date 05/02/12
Average Daily Volume = 1.5 million
Listed on June 01, 2011


NEW BEARISH Plays

Tempur Pedic Intl. - TPX - close: 43.14 change: -3.07

Stop Loss: 45.55
Target(s): 38.50
Current Gain/Loss: unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
After an extremely impressive first quarter rally shares of TPX have collapsed. Investors are worried that the company's growth rates are slowing down. Now shares are hitting new 52-week lows. TPX spent a good part of May trading under resistance (prior support) at the $50 level.

Friday's breakdown under $45.00 could signal another leg lower. I am suggesting small bearish positions at the open on Monday with a stop loss at $45.55. We are aiming for $38.50 but more conservative traders will want to exit near $40.00, which might offer some round-number support.

(small positions)

Suggested Position: short TPX stock @ (the open)

- or -

buy the July $40 PUT (TPX1221S40) current ask $2.70

Annotated chart:

Entry on June xx at $ xx.xx
Earnings Date 07/26/12 (unconfirmed)
Average Daily Volume = 4.7 million
Listed on June 01, 2011