LULU, home of the milfs.  I never liked them much as a brand, but just like Crocs, they have their niche.  It’s at an interesting point with a lot of potential downside.

Since CAT seems to be leading the bearish trend of the S&P 500, it looks like a decent short for a general market downturn.  If the market hangs around in distribution, this might be a good range bound play.  And if the market turns bullish, I’d probably ignore this since there are other better options I could consider right now.

GMCR has been a super hot topic amongst people talking growth stocks for a while now.  They also had a breakout that’s been holding up over the past few days, but the volume gives a conflicting signal.  I believe this stock is getting overbought and will eat it hard on the correction.  Normally I like to play stocks like this with triggers on both sides, playing the upwards momentum on short term trades of the breakouts, but trying to catch the crash after it starts.  Note that the key to this strategy is catching the crash AFTER it starts since you will get eaten alive trying to trade against momentum this strong.  With the volume dwindling the way it has on this one, I’m guessing the crash is close enough to start paying attention though. 

The volume of the drop today outpaced the breakout that brought us here, so it will be interesting to see what happens.  If the market follows through with its correction, RIMM may be a nice short play.  If not, it should at least be interesting to day trade on some bounce back days.  Either way, all of these stocks are interesting to watch if you like tech stuff for the long run too.

STEC is a hot tech company that makes solid state drives.  You definitely want to avoid this if you’re not an active trader, but it looks like it will have some nice swings to the upside and downside in the near future.  A fairly strong company by the numbers that carries no debt, the explosion this year was well founded and came at a good time to be amplified by the general bullish market conditions.  Increasingly powerful breakouts look like they may lead to a classic bump and run pattern.  While a company may stay fundamentally strong during a reversal, sometimes stocks just get too overbought to sustain the momentum. 

My play on this one is just to enter it manually as a prescreened stock into my auto trader.  If I were manually trading it, I would be waiting for the reversal since we’ve already passed the point that I would feel comfortable trying to swing trade to the upside.  Of course a stock this strong should also be put in the watch list for later on as a bullish position to take after a good correction and base.

Restaurants like CPKI, BJRI, and CAKE have all been on an absolute tear lately.  PNRA just got killed after hours for merely meeting expectations today, so I think the sector is showing that its hopes are a little too inflated.  If there is a market correction these will all be solid stocks to watch for short opportunities.

Triggers

• Above $17 – note the 52 week breakout and consider playing if there’s a lot of consolidation between now and then (and the economy is better)
• Below $14 – short

Aeropostale, yet another oldie that has come back on the scene.  Somehow their numbers have continued to grow, but I’ll have to admit that I’m out of their target audience so I have no personal anecdotal data to give about them.  The stock fell from $37.40 down to $12.52 in the course of a few months last year, but is breathing down the neck of the high again after another half dozen months.  That gives this stock one of our favorite attributes: volatility.  It also makes the stock interesting in both directions. 

The bearish plays are whatever typical plays you would make when a stock breaks down.  I wouldn’t trust a breakout anytime soon though due to the broader market conditions and the fact that there’s no real base unless you risk almost half.  Therefore, that’s only for a longer term look, maybe after the 2009 holiday season if we see a base formed between now and then.

Triggers

• Below $28.00 – watch for short entries
• Above $37.50 – examine the breakout and see if it’s playable