Editor's Note:

Traders should be cautious here. Friday's breakout in the S&P 500 index past its 50-dma is technically bullish. Yet it was done on a very low-volume, post-holiday session. Furthermore the S&P 500 remains below the six-week trend of lower highs (from its May peak) and below its multi-month trend line of higher lows that it broke on June 20th.

Essentially, I am very concerned that the S&P 500's bounce has been just that, nothing more than a bounce and it could kiss these overhead trend lines of resistance and reverse sharply lower. Seeing the S&P 500 stall right at the convergence of two different trend lines of resistance does not inspire confidence in the market even though stocks were up on Friday.

What I'm trying to communicate is you don't have to trade every day. We are publishing new trade set ups tonight because the market might continue to climb. A breakout higher could spark some short covering. Yet sometimes the better trade might be to just step back and watch the market for a couple of more days.



NEW BULLISH Plays

Seagate Tech. - STX - close: 45.72 change: +0.62

Stop Loss: 44.40
Target(s): 49.85
Current Gain/Loss: unopened

Entry on July -- at $--.--
Listed on July 06, 2013
Time Frame: exit PRIOR to earnings on July 24th
Average Daily Volume = 3.5 million
New Positions: Yes, see below

Company Description

Why We Like It:
STX makes data storage and disk drives. Shares have seen a strong rebound off their 50-dma. Currently STX is sitting at all-time highs. The $46.00 level does look like short-term resistance. Tonight we're suggesting a trigger to open bullish positions at $46.05. If triggered our target is $49.85.

Trigger @ 46.05

Suggested Position: buy stock @ (trigger)

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

buy the Aug $47 call (STX1317H47) current ask $1.63

Annotated chart:



Whole Foods Market - WFM - close: 53.23 change: +0.20

Stop Loss: 52.25
Target(s): 58.50
Current Gain/Loss: unopened

Entry on July -- at $--.--
Listed on July 06, 2013
Time Frame: exit PRIOR to earnings on July 31st.
Average Daily Volume = 2.2 million
New Positions: Yes, see below

Company Description

Why We Like It:
High-end grocer WFM looks poised for a breakout. The stock has been consolidating sideways in the $50.00-53.60 zone even since the big gap higher in May. Now with the current rally shares finally look poised to breakout of this trading range.

Resistance is at $53.60. I am suggesting a trigger to launch bullish positions at $53.75. If triggered our target is $58.50. However, we will plan to exit prior to the earnings report on July 31st.
FYI: The Point & Figure chart for WFM is bullish with a $78.00 target.

Trigger @ 53.75

Suggested Position: buy WFM stock @ (trigger)

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

buy the Aug $55 call (WFM1317H55) current ask $1.39

Annotated chart: