Editor's Note:

While looking for trading candidates tonight I noticed that Sturm Ruger (RGR) appears to be finding support at its exponential 200-dma. Traders could use a rally past $41.50 or $42.00 as a bullish entry point although I would consider buying a bounce in RGR a higher-risk trade. The stock is definitely oversold and due for a bounce. The $45.00 and $46.75 levels could be overhead resistance.


NEW BULLISH Plays

Potash Corp. - POT - close: 40.20 change: +0.93

Stop Loss: 38.90
Target(s): the 50-dma (currently 43.20)
Current Gain/Loss: unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
POT manufacturers the materials used in fertilizers. The stock has found support in the $39.00-38.50 zone near its December 2011 lows. Now shares are bouncing back above round-number resistance at $40.00.

POT can be a volatile stock so I am suggesting we keep our position size small. The high today was $40.22. Let's use a trigger at $40.30 to open small bullish positions. We'll stop loss at $38.90. There is potential resistance near $42.00 but we're aiming for the 50-dma (currently at $43.20).

Trigger @ 40.30 (small positions)

Suggested Position: buy POT stock @ (trigger)

- or -

buy the JUN $40 call (POT1216F40) current ask $1.46

Annotated chart:

Entry on May xx at $ xx.xx
Earnings Date 07/26/12 (unconfirmed)
Average Daily Volume = 5.4 million
Listed on May 24, 2011


NEW BEARISH Plays

Netgear Inc. - NTGR - close: 30.48 change: -1.87

Stop Loss: 31.55
Target(s): 26.00
Current Gain/Loss: unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
NTGR makes networking equipment. Shares have broken down to multi-month lows this month. Today saw NTGR's oversold bounce reverse sharply lower. Now the stock is poised to break key support near $30.00.

I am suggesting a trigger to open bearish positions at $29.75 with a stop at $31.55. Our multi-week target is $26.00.
FYI: The Point & Figure chart for NTGR is bearish with a $25.00 target.

Trigger @ 29.75

Suggested Position: short NTGR stock @ (trigger)

- or -

buy the Jun $30 PUT (NTGR1216R30) current ask $1.45

Annotated chart:

Entry on May xx at $ xx.xx
Earnings Date 07/26/12 (unconfirmed)
Average Daily Volume = 549 thousand
Listed on May 24, 2011


Marriott Vacations Worldwide - VAC - close: 28.05 change: -0.70

Stop Loss: 30.05
Target(s): 25.25
Current Gain/Loss: + 0.0%
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
VAC reported better than expected earnings back in early May. Yet it wasn't until Goldman Sachs upgraded the stock on May 10th that the rally picked up speed. VAC surged to the $33 level before collapsing in what appears to be profit taking. Now that profit taking has pushed the stock through what should have been support near $30 and a cloud of moving averages. Today's drop confirms the close under its 50-dma.

I am suggesting small bearish positions at the open tomorrow with a stop loss at $30.05. Our target is $25.25.

(small positions)

Suggested Position: short VAC stock @ (the open)

Annotated chart:

Entry on May xx at $ xx.xx
Earnings Date 08/02/12 (unconfirmed)
Average Daily Volume = 495 thousand
Listed on May 24, 2011