NEW BULLISH Plays

Rackspace Hosting - RAX - close: 38.95 change: +0.25

Stop Loss: 37.25
Target(s): 43.25
Current Gain/Loss: unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Cloud computing is a buzz word for the market right now. RAX plays in this space and shares recently broke through key resistance in the $38 area and some key moving averages (100 and 200). Today's intraday rebound looks like a bullish entry point.

I am suggesting new bullish positions tomorrow but only if both RAX and the S&P 500 index both open positive tomorrow. Our target is $43.25. FYI: The Point & Figure chart for RAX is bullish with a $59 target.

*See Entry Details Above*

Suggested Position: buy the stock @ the open

- or -

buy the NOV $40 call (RAX1119K40) current ask $

Annotated chart:

Entry on October xx at $ xx.xx
Earnings Date 11/07/11 (unconfirmed)
Average Daily Volume = 1.6 million
Listed on October 18, 2011


Financial Sector ETF - XLF - close: 12.79 change: +0.58

Stop Loss: 12.15
Target(s): 14.45
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Financial stocks are in rally mode in spite of negative earnings headlines. When investors are buying bad news the path of least resistance is up. This can be a volatile sector so we want to keep our position size small.

I am suggesting bullish positions now but only if both the XLF and the S&P 500 index both open positive tomorrow morning. More conservative traders may want to wait for a breakout past $13.00 instead.

*See Entry Details Above*

Suggested Position: buy XLF @ the open

- or -

buy the NOV $13 call (XLF1119K13) current ask

Annotated chart:

Entry on October xx at $ xx.xx
Earnings Date --/--/--
Average Daily Volume = 125 million
Listed on October 18, 2011