Editor's Note:

In addition to tonight's new candidate, consider these stocks as possible trading ideas and watch list candidates:

UPL - shares underperformed the market today and the stock looks like a potential bearish candidate.

AIMC - keep an eye on this one for a breakout past potential resistance at the $20.00 level.

CRZO - the oversold bounce has reversed and CRZO looks like a potential bearish trade.

Z - A breakout past resistance near $30.00 could be a bullish entry point but we do not want to hold over earnings on Feb. 8th.


NEW BULLISH Plays

Zumiez Inc. - ZUMZ - close: 28.56 change: +0.61

Stop Loss: 27.40
Target(s): 32.25 or 34.50
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
ZUMZ could see a short squeeze soon. The most recent data listed short interest at 33% of the very small 21.8 million-share float. Now if you look at the daily chart you will see that investors have been buying dips to the simple 50-dma. That's where ZUMZ is at now, just starting to bounce at the 50-dma.

I am suggesting we open bullish positions on ZUMZ tomorrow morning but only if both ZUMZ and the S&P 500 open positive. If the market opens down and ZUMZ rallies anyway then we'll use a trigger at $29.25 instead. I am setting two different targets. Conservative traders can exit at $32.25. More aggressive traders can exit at $34.50.

Do not enter position unless ZUMZ and the S&P 500 are both positive at the open. However, we will use an alternative entry point at $29.25 (details above).

Suggested Position: buy ZUMZ stock

- or -

buy the Feb. $30 call (ZUMZ1218B30)

Annotated chart:

Entry on January xx at $ xx.xx
Earnings Date 03/12/12 (unconfirmed)
Average Daily Volume = 627 thousand
Listed on January 31, 2011


NEW BEARISH Plays

Portfolio Recovery Associates - PRAA - close: 64.95 change: -0.56

Stop Loss: 68.05
Target(s): 60.50
Current Gain/Loss: unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
PRAA is a debt collector. Shares have been slowly fading lower. The stock has been underperforming for several weeks. You can clearly see the bearish trend of lower highs and lower lows.

I am suggesting bearish positions at the open tomorrow morning. We'll use a stop loss at $68.05, which is a little bit wide but $68.00 was recent resistance. Our target is $60.50. More aggressive trades could aim lower. FYI: The Point & Figure chart for PRAA is bearish with a $56.00 target.

Open Positions Tomorrow Morning

Suggested Position: short PRAA stock @ the open

Annotated chart:

Entry on January xx at $ xx.xx
Earnings Date 02/15/12 (unconfirmed)
Average Daily Volume = 156 thousand
Listed on January 31, 2011