Editor's Note:

We want to keep our position size small!

The market rallied on news of a fiscal cliff deal but the deal could end up being a bitter pill for the market to swallow. The initial euphoria of avoiding the cliff might sour. Be cautious on adding new positions.

The market's trend is up but I'm worried if stocks will see any follow through.



NEW BULLISH Plays

Lennar Corp. - LEN - close: 39.88 change: +1.21

Stop Loss: 38.40
Target(s): 44.50
Current Gain/Loss: unopened

Entry on January xx at $ xx.xx
Listed on January 02, 2012
Time Frame: 6 to 8 weeks
Average Daily Volume = 4.0 million
New Positions: Yes, see below

Company Description

Why We Like It:
Shares of homebuilder LEN have been consolidating under major resistance at the $40.00 level for several weeks. Today's market rally has pushed the stock right back to this resistance level and LEN finally looks poised to break through it.

I am suggesting a trigger to open small bullish positions at $40.15. If triggered our multi-week target is $44.50.

Trigger @ $40.15 *Small Positions*

Suggested Position: buy LEN stock @ (trigger)

- (or for more adventurous traders, try this option) -

buy the Feb $40 call (LEN1316B40) current ask $1.89

Annotated chart:



Pandora Media - P - close: 9.49 change: +0.31

Stop Loss: 8.95
Target(s): 10.75
Current Gain/Loss: unopened

Entry on January xx at $ xx.xx
Listed on January 02, 2012
Time Frame: 6 to 8 weeks
Average Daily Volume = 5.8 million
New Positions: Yes, see below

Company Description

Why We Like It:
It looks like shares of Pandora may have bottomed. The stock has been building on a bullish pattern of higher lows. Now P is poised to breakout past resistance at the $9.50 level.

Please note that I do consider this an aggressive, higher risk trade. Not only is P a somewhat volatile stock but in addition to resistance at $9.50 there is also potential resistance at the 200-dma (near 9.65), the exponential 200-dma (near $10.00) and the $10.00 level itself.

If Pandora is able to breakout it could spark a short squeeze. The most recent data listed short interest at 60% of the 110.9 million-share float.

I am suggesting a trigger to open small bullish positions at $9.60. If triggered our target is $10.75.

Trigger @ 9.60 *Small Positions*

Suggested Position: buy P stock @ (trigger)

Annotated chart: