NEW BULLISH Plays

The Gap, Inc. - GPS - close: 45.48 change: -0.15

Stop Loss: 44.40
Target(s): 49.50
Current Gain/Loss: unopened

Entry on July -- at $--.--
Listed on July 27, 2013
Time Frame: exit PRIOR to earnings in late August
Average Daily Volume = 2.5 million
New Positions: Yes, see below

Company Description

Why We Like It:
Shares of GPS were panned and disparaged the last several years as the stock languished in the shadow of the glory days of the late 1990s. However, it looks like the company, and the stock, has gotten its mojo back. Shares have a consistent trend higher with investors buying every significant dip.

The last couple of weeks have seen GPS consolidate sideways in a narrow range but the stock broke out of that range on Thursday. Traders were quick to buy the dip again on Friday morning. Thursday's high was $45.65. We are suggesting a trigger to open bullish positions at $45.75. If triggered our target is $49.50. We will plan to exit prior to GPS' earnings report in late August.

Trigger @ 45.75

Suggested Position: buy GPS stock @ (trigger)

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

Buy the Sep $45 call (GPS1321i45) current ask $2.13

Annotated chart:



L Brands, Inc. - LTD - close: 53.68 change: +0.43

Stop Loss: 52.45
Target(s): 58.50
Current Gain/Loss: unopened

Entry on July -- at $--.--
Listed on July 27, 2013
Time Frame: exit PRIOR to the earnings report on Aug. 21st
Average Daily Volume = 1.7 million
New Positions: Yes, see below

Company Description

Why We Like It:
Previously called "Limited Brands" the company changed their name to "L Brands" in March 2013. They are best known for their Victoria's Secret and Bath & Body works chain stores. The long-term trend has been up for a couple of years but it has been a very choppy chart. What investors might find interesting is how LTD reported disappointing June same-store sales growth of +0.0% and traders bought the news anyway. The current rally has pushed LTD past recent resistance in the $53.00-53.50 zone and the stock closed at a new all-time high.

Tonight we are suggesting a trigger to launch small bullish positions at $53.85. If triggered our target is $58.50 but that might be a bit optimistic. LTD is due to report earnings on August 21st and we do not want to hold over the announcement.

FYI: The Point & Figure chart for LTD is bullish with a $68.00 target.

Trigger @ 53.85 *small positions*

Suggested Position: buy LTD stock @ (trigger)

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

Buy the Sep $55 call (LTD1321i55) current ask $1.30

Annotated chart: