Editor's Note:

There seems to be a lot of indecision in the stock market right now. Traders are nervous about holding over the weekend. Every day seems to present new headline risk. Will the next few days bring positive headlines regarding Japan's ability to cool their troubled reactors? Or will we see more negative headlines about out of control radiation and a spreading contamination. How about Libya? The U.N. has gotten involved. French fighter jets are flying over Libya trying to enforce a no-fly zone while the U.S. fires tomahawk missiles to destroy Qaddafi's anti-aircraft weapons. Violence is getting worse in places like Bahrain and Yemen as the governments there try to quell the protests for democracy and change.

The market's bounce off its lows could be nothing more than a bounce. The correction may not be over yet. If that's your view then I would avoid launching new bullish positions. Instead you may want to watch for the market to fail at overhead resistance to initiate new bearish plays. Potential failure points are 1275 and the 1300 level on the S&P 500. On the other hand if you are optimistic that the market will recover and focus on the bullish fundamentals in spite of the wall of worry then carefully consider new bullish trades. The best trade tonight might be to just stand back and wait and see if we have any more clarity on Monday or Tuesday before putting capital back to work in the market.

In addition to tonight's new candidates check out these stocks:

PLL - this stock has a slow and steady trend of higher highs and higher lows.

HSY - This candy maker has been pretty resistant to any profit taking and looks poised to run higher.

HAS - This toy maker looks like it could rally toward resistance near $50.

DPS - This soft drink maker does not move very fast but a breakout past $38.00 might be a bullish entry point.

SWY - I strongly considered buying SWY right here with the intraday bounce from support near $22.00. If you do I would use a tight stop and target a move toward $24.00.

PBCT - This financial stock has been underperforming for weeks. However, if the stock was going to find a bottom then this would be a good spot to bet on one. Traders willing to speculate on a bounce could launch bullish positions here with a stop loss under $12.00 or under this past week's low at $12.17.

- James


Dick's Sporting Goods Inc. - DKS - close: 39.08 change: +0.42

Stop Loss: 36.75
Target(s): 42.25, 44.50
Current Gain/Loss: +0.0%
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The recent pull back in stocks has dragged shares of DKS back toward prior resistance and what should be new support in the $38-39 zone. Big picture the trend is up and DKS has not seen much of a negative reaction to high gasoline prices (since higher fuel costs mean less money in consumers' pockets).

I am cautiously bullish here. Let's open small bullish positions now or you could wait for a dip into the $38.50-37.50 zone. I'm suggesting a stop loss at $36.75. I'm suggesting profit targets at $42.25 and $44.50.

FYI: The Point & Figure chart for DKS is bullish with a $65 target.

Suggested Position: Buy DKS stock @ current levels

- or -

Buy the June $40 calls (DKS1118F40) current ask $2.25

Annotated chart:

Entry on March x at $xx.xx
Earnings Date 05/18/11 (unconfirmed)
Average Daily Volume: 1.6 million
Listed on March 19th, 2010

Southwestern Energy Co. - SWN - close: 41.12 change: +0.22

Stop Loss: 37.95
Target(s): 44.85
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Company Description

Why We Like It:
SWN is a Texas-based oil and natural gas company focused on production in the U.S. Shares of SWN have been outperforming its peers in the energy sector and the wider market the past few days. The stock has been rising and on strong volume. SWN just recently broke out past key resistance near $40.00. On a short-term basis SWN looks overbought.

I am suggesting we launch bullish positions on a dip at $40.25 since resistance at $40.00 should be new support. More conservative traders might want to wait and hope for a dip closer to the $39.00 area. If we are triggered at $40.25 we'll use a stop loss at $37.95. Our firs target is $44.85.

FYI: The Point & Figure chart for SWN recently broke out past resistance and is now signaling a bullish target of $51.

Buy-the-Dip Trigger @ $40.25

Suggested Position: Buy SWN stock @ 40.25

- or -

Buy the June $42 calls (SWN1118F42) current ask $2.53

Annotated chart:

Entry on March x at $xx.xx
Earnings Date 04/28/11 (unconfirmed)
Average Daily Volume: 6.9 million
Listed on March 19th, 2010