BUY STOCKS - MAGS,BFRM,BDGR,GSI

Magal Security Systems Ltd (NASDAQ: MAGS) — This $41 million Israeli-based computer security stock could be on the verge of a strong week following a breakout above the 50-day moving average in New Year’s Eve’s trading session. That breakout sends a technical signal that the stock is headed higher… potentially up to the next resistance level around $4.25 per share. That’s a 15% upside potential that we’re going to bet on starting today.

BioForm Medical (NASDAQ: BFRM) — Medical aesthetics company BioForm Medical is up nearly 61% today following a buyout announcement from German-based Merz Pharma Group. While this stock popped onto quite a few investors’ radars this morning on its price jump, with shares currently hovering right around the offer price of $5.45, there’s not a trade to be made here. Stay away from this one unless it drops well below the offer.

Black Dragon Resource Companies (PINK: BDGR) — Black Dragon Resources is an oil and natural gas developer based in aptly-named Oil City, Louisiana. Black Dragon’s business is fairly typical of the industry, but its chart isn’t. Shares have rallied hard in the past few trading sessions, possibly the result of some ruthless penny stock promotion. If you want to ride the rally, place tight stops (10% or so): pink sheets companies are volatile, and heavily promoted ones are even more so.

General Steel Holdings (NYSE: GSI) — Strong performance today could keep this potential trade from triggering, but watch it close this week, a sustained breakdown below the 50 and 200 day moving averages tells traders to short this stock — particularly after shares failed to keep enough momentum to reach a triple-top at $6.00 per share.