NEW BULLISH Plays

ProShares Ultra Crude Oil - UCO - close 9.62 change +0.36 stop 8.90

Company Description:
ProShares Ultra DJ-UBS Crude Oil seeks daily investment results that correspond to twice (200%) the daily performance of the Dow Jones—UBS Crude Oil Sub-Index (the Index). The Index, a sub-index of DJ—UBS Commodity Index, is intended to reflect the crude oil segment of the commodities market. The Index consists of futures contracts on crude oil only. The Index is valued using the settlement prices for the underlying futures contracts.

Target(s): 10.00, 10.50, 10.95
Key Support/Resistance Areas: 9.00, 9.25, 9.70, 10.05, 10.30, 10.80
Time Frame: 1 week

Why We Like It:
UCO (and Crude Oil Futures) made a double bottom with yesterday's and today's lows. It also appears oil is making a higher low on the daily chart and I believe the commodity is poised to move higher from here. I would like to use $9.50 as an ideal entry point and have listed multiple targets above that can be used to exit positions. The 20-day SMA will most likely provide some resistance and is near our 1st target of $10.00. Ultimately I think UCO has a lot more room to run but we will take profits when the opportunity presents itself and look for better entries. Our initial stop will be $8.90 which is below the gap from 5/26 to 5/27. *NOTE: UCO is leveraged fund and with it comes volatility. Using a small position size to limit risk is recommended. I also view this as an aggressive and quick trade that may only last a few days.

Suggested Position: Long UCO at current levels or if it trades down near $9.50.

Annotated Chart:

Entry on June xx
Earnings Date 7/22/10 (unconfirmed)
Average Daily Volume: 7.8 million
Listed on 6/2/10


Quest Software - QSFT - close 19.26 change +0.58 stop 18.40

Company Description:
Quest Software, Inc. (Quest) designs, develops, markets, distributes and supports enterprise systems management software products. The Company’s primary portfolio of software products includes software solutions grouped into four categories: Application Management, Database Management, Windows Management and Virtualization Management. In addition to perpetual software licenses, it sells time-based software licenses wherein customers pay a single fee for the right to use the software and receive maintenance for a defined period of time. It also provides support, maintenance and implementation services for these products. Its segments include Licenses and Services. The Licenses segment develops, and markets and sells licenses to use, software products. The Services segment provides post-sale support for software products and fee-based training and consulting services related to its software products. In December 2009, the Company acquired PacketTrap Networks, Inc.

Target(s): $19.60, 20.50, 21.00
Key Support/Resistance Areas: 18.60, 19.36
Time Frame: Several weeks

Why We Like It:
QSFT is relative strength play that is involved in virtualization software and cloud computing, among other things. These stocks have done extremely well as the market has been under pressure over the past month. QSFT has recently broken out of a resistance level near $18.60 which has acted as support the last couple of days. The stock made new all time highs on 5/19 and if the market can continue its bounce from today I expect QSFT to make new highs again. I have also noticed unusual option activity picking up in the July strike prices and above average volume, both bullish signals. I would like to see QSFT pullback near the $19.00 level which we will use as a trigger to enter long positions. With all of that said I want to keep a tight leash on the trade with a stop at $18.60 to protect capital if things reverse lower. I am also choosing a $20.00 out of the money call option to limit capital at risk.

Suggested Position: Long QSFT stock if it trades down near $19.00

Option Traders:
Suggested Position: Buy July $20.00 CALL, current ask $1.10, estimated ask at entry $1.00

Annotated Chart:

Entry on June xx
Earnings Date 8/10/10 (unconfirmed)
Average Daily Volume: 1.9 million
Listed on 6/2/10