Discover Financial Services - DFS - close: 24.06 change: -0.06

Stop Loss: 20.95
Target(s): 24.90
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Company Description

Why We Like It:
DFS has been outperforming its peers for weeks. I suspect that investors reaction to earnings from some of DFS' rivals could spark some profit taking in shares of DFS. JPM reports earnings on Wednesday morning and the news could impact the entire financial sector. We want to be ready to buy the dip when DFS nears support at $22.00. I am suggesting a trigger to open bullish positions at $22.25. We'll use a stop loss at $20.95.

Buy-the-Dip Trigger @ $22.25

Suggested Position: buy DFS stock @ $22.25

- or -

Buy the May $22 calls (DFS1121E22)

Annotated chart:

Entry on April x at $xx.xx
Earnings Date 06/23/11 (unconfirmed)
Average Daily Volume: 5.9 million
Listed on April 12th, 2011