Editor's Note:

The market's major indices are down four weeks in a row. Yet I found more bullish candidates than bearish ones. There are so many people expecting a deeper correction the market might rise just to spite them. If you are interested in bullish trading ideas check out this list of stocks I'm watching:

BIDU, FFIV, CTXS, BMC, CMG, PX, NFLX, COH, JNJ, ZMH, ANF, SHW, MSI, and PCP

- James


NEW DIRECTIONAL CALL PLAYS

Avalonbay Communities - AVB - close: 130.00 change: +0.53

Stop Loss: 127.75
Target(s): 134.90, 139.50
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see trigger

Company Description

Why We Like It:
The market might be down four weeks in a row but many of the REIT stocks have avoided this decline. Shares of AVB have been consolidating sideways under resistance at $130 the past month. Now shares are poised to breakout past this level.

I'm suggesting a trigger to launch bullish positions at $130.51. If triggered we have two targets at $134.90 and $139.50.

Trigger @ 130.51

- Suggested Positions -

Buy the June $135 call (AVB1118F135) current ask $0.50

- or -

buy the July $135 call (AVB1116G135) current ask $1.30

Annotated Chart:

Entry on May xxth at $ xx.xx
Earnings Date 08/03/11 (unconfirmed)
Average Daily Volume = 571 thousand
Listed on May 28th, 2011


NEW DIRECTIONAL PUT PLAYS

Stericycle Inc. - SRCL - close: 88.34 change: -0.81

Stop Loss: 91.55
Target(s): 84.00, 80.50
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Technically things have turned bearish for SRCL. Shares produced a bearish head-and-shoulders pattern and broke down under the neckline last week. Shares of SRCL also broke down under its 50-dma and its up trend of higher lows. I am suggesting bearish positions now with a stop loss at $91.55. More conservative traders may want to use a stop closer to the $90 level. Our targets are $84.00 and $80.50. FYI: The Point & Figure chart for SRCL is bearish with a $82 target.

- Suggested Positions -

buy the June $85 PUT (SRCL1118R85) current ask $0.70

- or -

buy the July $85 PUT (SRCL1116S85) current ask $1.60

Annotated Chart:

Entry on May 30th at $ xx.xx
Earnings Date 07/27/11 (unconfirmed)
Average Daily Volume = 502 thousand
Listed on May 28th, 2011