Editor's Note:

In addition to tonight's new candidate, consider these stocks as possible trades:

HITK - shares displayed some relative strength today. Further strength might be a buy signal here. The trend of higher lows is bullish.

CBRL - this restaurant stock is consolidating sideways under resistance at $50.00. Look for a breakout.

- James


Varian Medical Sys. - VAR - close: 64.75 change: +0.33

Stop Loss: 62.80
Target(s): 69.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
VAR makes medical equipment and software. The stock has been consolidating sideways under resistance at the $65.00 level. Shares managed to show some relative strength today with a +0.5% gain. If the stock can breakout past resistance it should see a run towards the next level of resistance near $70.00.

I am suggesting a trigger to buy calls at $65.25 with a stop at $62.80. Our target is $69.75. FYI: The Point & Figure chart for VAR is bullish with a $89 target.

Trigger @ 65.25

- Suggested Positions -

buy the JAN $65 call (VAR1221A65) ask $2.50

Annotated Chart:

Entry on December xx at $ xx.xx
Earnings Date 01/25/12 (unconfirmed)
Average Daily Volume = 1.1 million
Listed on December 12, 2011