NEW BULLISH Plays

Vanguard Natural Resources - VNR - cls: 30.69 chg: +1.22

Stop Loss: 28.99
Target(s): 33.25
Current Gain/Loss: + 0.0%
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Oil and energy stocks were strong performers on Friday. VNR displayed relative strength with a rally past resistance at $30.00 and its 100-dma. Shares are now free to rally toward its 2011 highs in the $33.00-33.50 area. I am suggesting bullish positions now. However, we only want to open new positions if both the S&P 500 and VNR are both positive on Monday morning. More conservative traders may want to wait and buy VNR on a dip near the $30.00 level instead. I am suggesting a stop loss under the 200-dma at $28.99. Cautious traders might want to consider an alternative stop in the $29.30-29.40 area instead. Our target is $33.25.

Suggested Position: buy VNR stock @ current levels

- or -

buy the AUG $30 call (VNR1120H30) current ask $1.40

Annotated chart:

Entry on July 18 at $ xx.xx
Earnings Date 08/04/11 (unconfirmed)
Average Daily Volume = 193 thousand
Listed on July 16, 2011


NEW BEARISH Plays

OptionsXpress Holdings - OXPS - close: 15.21 change: -0.20

Stop Loss: 16.05
Target(s): 14.05, 13.65
Current Gain/Loss: + 0.0%
Time Frame: about 2 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Analysts are growing worried that trading volumes for the quarter across the industry have been a lot lower than expected. OXPS warned back in June that May volumes were down. This past week saw OXPS breakdown under its simple 200-dma and saw a bounce fail at new resistance near $16.00.

I am suggesting new bearish positions now. Nimble traders could choose to wait and try and launch positions on a bounce or failed rally near $15.50 or near the 200-dma instead. Our first target is $14.05 as the $14.00 level is likely support. I do want to point out the $14.85 level might offer some support. Don't be surprised to see a bounce there.

Suggested Position: short OXPS stock @ current levels

- or -

buy the AUG $15 PUT (OXPS1120T15) current ask $0.60

Annotated chart:

Entry on July 18 at $ xx.xx
Earnings Date 07/27/11 (unconfirmed)
Average Daily Volume = 696 thousand
Listed on July 16, 2011


VanceInfo Technologies - VIT - close: 18.08 change: -0.63

Stop Loss: 20.15
Target(s): 15.15, 12.75
Current Gain/Loss: + 0.0%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
VIT is a Chinese IT technology company. The stock has been struggling with a bearish trend of lower highs and lower lows for months. The most recent consolidation and rebound attempt just failed in late June. This past week saw VIT breakdown under support near $20.00 and sink to new lows for the year. You can certainly argue that VIT is short-term oversold here but the oversold bounce on Thursday quickly failed. Investors are selling into strength.

Before I go any further I do have to qualify this as a higher-risk trade. The most recent data listed short interest at more than 30% of the very small 23.6 million-share float. There is definitely reason to worry over a short squeeze, which explains the sharp oversold bounces. Thus readers may want to buy the puts to limit your risk instead of shorting the stock. FYI: The Point & Figure chart for VIT is bearish with a $6.00 target.

I am suggesting bearish positions now with a stop at $20.15. Our targets are $15.15 and $12.75.

Suggested Position: short VIT stock @ current levels

- or -

buy the AUG $17.50 PUT (VIT1120T17.5) current ask $2.15

Annotated chart:

Entry on July 18 at $ xx.xx
Earnings Date 08/15/11 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on July 16, 2011