NEW BULLISH Plays

EXCO Resources - XCO - close: 7.70 change: +0.12

Stop Loss: 7.45
Target(s): 9.25
Current Gain/Loss: unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Based in Texas, XCO is an independent oil and gas company. It looks like the stock has finally found a bottom after a massive decline from its early 2011 highs. Currently shares are hovering under resistance at the $8.00 level. If XCO can breakout it could see a short squeeze. The most recent data listed short interest at 27% of the 135 million-share float.

I am suggesting a trigger to open bullish positions at $8.05. We'll use a stop loss at $7.45. Our target is $9.25.

Trigger @ $8.05

Suggested Position: buy XCO stock @ (trigger)

- or -

buy the JUN $8.00 call (XCO1216F8) current ask $0.40

Annotated chart:

Entry on May xx at $ xx.xx
Earnings Date 07/31/12 (unconfirmed)
Average Daily Volume = 7.0 million
Listed on May 22, 2011


NEW BEARISH Plays

Companhia Brasileira de Distribuicao - CBD - cls: 39.95 chg: -0.96

Stop Loss: 41.51
Target(s): 35.25
Current Gain/Loss: unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
CBD is a large Brazilian supermarket and department store operator. Shares broke down under key support near 445-44 earlier this month. Now the stock is breaking down under technical support at its 200-dma and the $40.00 level.

CBD is arguably oversold here but we want to launch bearish positions anyway. We'll try and limit our risk by using small positions and a stop loss above yesterday's high (at 41.51). I am suggesting we use a trigger at $39.70 to open positions.

Trigger @ $39.70 (small positions)

Suggested Position: short CBD stock @ (trigger)

Annotated chart:

Entry on May xx at $ xx.xx
Earnings Date 05/23/12 (unconfirmed)
Average Daily Volume = 2.2 million
Listed on May 22, 2011