NEW BULLISH Plays

Best Buy Co. Inc. - BBY - close: 27.70 change: +0.93

Stop Loss: 26.45
Target(s): to be determined
Current Gain/Loss: unopened

Entry on April -- at $--.--
Listed on April 05, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 5.4 million
New Positions: Yes, see below

Company Description

Why We Like It:
BBY is in the services sector. The company operates a big-box chain of consumer electronics stores. The stock was crushed on January 16th after the company reported worse than expected same-store sales and lowered their earnings forecast. After a drop from $44 to $22 this could be a case where all the bad news is priced in.

Shares of BBY have slowly been trending higher since its February lows. Now shares are testing significant resistance near the $28.00 level. BBY displayed relative strength on Friday by ignoring the market's widespread sell-off and posting a +3.4% gain.

One of Microsoft's most popular operating systems, Windows XP, is about to be retired. Windows XP came out in 2001 but after April 8th this year Microsoft will stop producing security updates for it. BBY just launched a new promotion to bring in customers. Anyone who turns in a computer or laptop with Windows XP on it can get a $100 credit toward a new computer in Best Buy.

We like the relative strength in BBY and it looks like the stock is poised for a breakout past resistance. The January 16th high was $28.20. We're suggesting a trigger to open bullish positions at $28.30.

Trigger @ $28.30

Suggested Position: buy BBY stock @ (trigger)

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

Buy the May $28 call (BBY1417E28) current ask $1.07

Annotated chart:



NEW BEARISH Plays

Incyte Corp. - INCY - close: 50.50 change: -0.92

Stop Loss: 51.25
Target(s): 45.25
Current Gain/Loss: unopened

Entry on April -- at $--.--
Listed on April 05, 2014
Time Frame: exit PRIOR to earnings on May 1st
Average Daily Volume = 2.2 million
New Positions: Yes, see below

Company Description

Why We Like It:
INCY is in the healthcare sector. The company is part of the biotech industry. After massive gains last year in the biotech stocks the group has suddenly and violently reversed lower. The IBB biotech ETF is nearing a bear market at -17% from its late February highs. INCY is already in a bear market with a -28% drop from its $70 highs.

Analysts keep trying to call a bottom on this biotech sell-off and the group just keeps falling. INCY's oversold bounce from support at $50.00 just reversed at resistance near $55 and its 10-dma. Now INCY is testing support near $50.00 again.

This newsletter considers biotech stocks to be aggressive, higher-risk trades. The stocks can see huge moves both up and down on headlines. I suggest traders use caution and limit their position size. Friday's low was $49.52. We are suggesting a trigger to open bearish positions at $49.35. If triggered we will aim for $45.25. More aggressive traders can aim lower but the $45.00 level and the 200-dma could be support.

Trigger @ 49.35

Suggested Position: short INCY stock @ $49.35

Annotated chart: