Editor's Note:

Additional Trading Ideas:

In addition to tonight's new candidate, consider these stocks as possible trading ideas and watch list candidates. Many of these need to see a break past key support or resistance:

(bullish ideas) LEN, DFS, VRSN, VECO, DIS, SIG, XHB


NEW BULLISH Plays

Aruba Networks - ARUN - close: 15.49 change: +0.30

Stop Loss: 14.90
Target(s): 19.00
Current Gain/Loss: unopened
Time Frame: 2 to 4 weeks

Entry on August xx at $ xx.xx
Listed on August 8, 2011
Average Daily Volume = 3.4 million New Positions: Yes, see below

Company Description

Why We Like It:
It looks like shares of this networking and communications company may have found a significant bottom. ARUN has been consolidating sideways under resistance near the $15.00 level for two months. You could argue this stock has built a bullish double bottom with the lows in early June and mid July.

ARUN could see a short squeeze. The most recent data listed short interest at 24% of the 104.8 million-share float. I would be tempted to buy the stock now but I'm worried the market's major indices could be poised for a short-term decline. Therefore I am suggesting a trigger to launch bullish positions on ARUN at $15.75. If triggered our target is $19.00. More aggressive traders could aim higher but there is a cloud of major moving averages in the $19-20 area.

Trigger @ 15.75

Suggested Position: buy ARUN stock @ (trigger)

- or -

buy the Sep $16 call (ARUN1222i16) current ask $1.25

Annotated chart:


PulteGroup - PHM - close: 12.09 change: +0.38

Stop Loss: 11.40
Target(s): 14.50
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks

Entry on August xx at $ xx.xx
Listed on August 8, 2011
Average Daily Volume = 14.5 million New Positions: Yes, see below

Company Description

Why We Like It:
Some of the homebuilding stocks are starting to show some relative strength. PHM was definitely looking strong today with a +3.2% gain but it stalled right near the late July high. Shares have a bullish trend of higher lows and look poised to breakout. PHM is currently near two-year highs.

I am suggesting a trigger to launch bullish positions at $12.25. Our multi-week target is $14.50. We will need to be patient for PHM to get there.

Trigger @ 12.25

Suggested Position: buy PHM stock @ (trigger)

- or -

buy the Oct $13 call (PHM1220j13) current ask $0.62

Annotated chart: