NEW BULLISH Plays

Rackspace Hosting - RAX - close: 45.16 change: +0.95

Stop Loss: 43.45
Target(s): 49.75
Current Gain/Loss: unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
RAX is in the hosting and cloud computing industry. Shares have been slowly working their way higher. Now it's challenging a key trendline of resistance. A breakout here could provoke some short covering, especially since the most recent data listed short interest at almost 14% of the 105.7 million share float.

We are suggesting a trigger to open bullish positions at $45.55 with a stop at $43.45. More conservative traders may want to wait for RAX to close over $46.0 instead since the spring 2011 highs may still be resistance.
FYI: The Point & Figure chart for RAX is bullish with a $65 target.

Trigger @ 45.55

Suggested Position: buy RAX stock @ 45.55

- or -

buy the Jan $45 call (RAX1221A45) ask $2.00

Annotated chart:

Entry on December xx at $ xx.xx
Earnings Date 02/09/12 (unconfirmed)
Average Daily Volume = 1.5 million
Listed on December 20, 2011


Ross Stores Inc. - ROST - close: 47.86 change: +1.61

Stop Loss: 45.75
Target(s): 52.50
Current Gain/Loss: unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
ROST continues to show strength. The stock rallied +3.4% to close at all-time highs near $48.00. The stock recently had a 2-for-1 split on December 15th. Nimble traders might want to try and buy a dip near $46.00, which has been support for two weeks. I am suggesting we open bullish positions when ROST trades at $48.05.

Trigger @ 48.05

Suggested Position: buy ROST stock @ 48.05

- or -

buy the 2012Jan $50 call (ROST1221A50) ask $0.45

Annotated chart:

Entry on December xx at $ xx.xx
Earnings Date 03/19/12 (unconfirmed)
Average Daily Volume = 1.1 million
Listed on December 20, 2011