NEW BULLISH Plays

Zillow, Inc. - Z - close: 38.47 change: +1.25

Stop Loss: 36.90
Target(s): 44.50
Current Gain/Loss: unopened
Time Frame: up to the early May earnings report
New Positions: Yes, see below

Company Description

Why We Like It:
Zillow is a real estate website. Shares have been showing relative strength and didn't see that much selling pressure when the market broke down recently. The stock looks poised to rally and that could spark a short squeeze. The most recent data listed short interest at 16% of the very small 8.9 million-share float.

Zillow has found resistance in the $38.50-39.00 zone the last couple of weeks. I am suggesting a trigger to open bullish positions at $39.25. Our target is $44.50. We're going to start this trade with a stop loss at $36.75.

Trigger @ 39.25

Suggested Position: buy Z stock @ (trigger)

- or -

buy the May $40 call (Z1219E40) current ask $2.10

Annotated chart:

Entry on April xx at $ xx.xx
Earnings Date 05/09/12 (unconfirmed)
Average Daily Volume = 379 thousand
Listed on April 11, 2011


NEW BEARISH Plays

Cabot Oil & Gas - COG - close: 29.81 change: -0.82

Stop Loss: 31.25
Target(s): 25.50
Current Gain/Loss: unopened
Time Frame: up to the earnings report on April 25th
New Positions: Yes, see below

Company Description

Why We Like It:
COG is an oil and gas company. Shares have been forming a bearish trend of lower highs for months. Now the stock is flirting with a breakdown under major support near the $30.00 level. If you look at the weekly chart (below) you could argue COG has formed a bearish head-and-shoulders pattern and a break below $30 would be a major sell signal.

Before you get too enthusiastic here I want to warn you that prior breakdowns under $30.00 were quickly reversed. Plus the stock has spiked higher a couple of times on rumors that COG was a takeover target. Therefore we want to keep our positions small to limit our risk.

Last week's low was $29.44. I am suggesting a trigger to open bearish positions at $29.40. We'll use a stop at $31.25. Our target is $25.50. We do not want to hold over the April 25th earnings report.

Trigger @ $29.40 (small positions)

Suggested Position: short COG stock @ (trigger)

- or -

buy the May $28 PUT (COG1219Q28) current ask $1.05

Annotated chart:

Weekly chart:

Entry on April xx at $ xx.xx
Earnings Date 04/25/12 (unconfirmed)
Average Daily Volume = 4.0 million
Listed on April 11, 2011