NEW BULLISH Plays

Penn Virginia Corp. - PVA - close: 12.13 change: +0.54

Stop Loss: 11.15
Target(s): 17.00
Current Gain/Loss: unopened

Entry on January -- at $--.--
Listed on January 28, 2014
Time Frame: exit PRIOR to earnings on Feb.19th
Average Daily Volume = 3.2 million
New Positions: Yes, see below

Company Description

Why We Like It:
PVA is in the basic materials sector. The company is an oil and gas firm focused on U.S. resources. The stock is a long way from its 2008 highs above $70 a share. The stock spent over a year forming a bottom in the $4.00-5.00 zone in 2012-2013. The current rally started back in September 2013. The stock suffered a correction for about five weeks that started in early December. PVA found new bullish momentum again in 2014.

Driving the stock higher has been some very bullish analyst comments on the stock. One analyst listed PVA as a likely takeover target. All this bullish talk on PVA has got to make the shorts nervous and there are a lot of shorts. The most recent data listed short interest at 32% of the 49.9 million share float. New highs from here could spark more short covering.

So far the January high for PVA has been $12.49. We are suggesting a trigger to open bullish positions at $12.55. If triggered our target is $17.00 but that is very, very optimistic goal. Odds are more likely we won't capture that big of a move because PVA is due to report earnings on February 19th and we do not want to hold over the announcement.

Investors may want to consider PVA as a longer-term trade. The Point & Figure chart for PVA is bullish with a long-term $25.00 target.

Trigger @ 12.55

Suggested Position: buy PVA stock @ (trigger)

- (or for more adventurous traders, try this option) -

Buy the Mar $12.50 call (PVA1422C12.5) current ask $0.95

Annotated chart:



NEW BEARISH Plays

GameStop Corp. - GME - close: 36.05 change: -1.27

Stop Loss: 37.75
Target(s): 31.00
Current Gain/Loss: unopened

Entry on January -- at $--.--
Listed on January 28, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 6.2 million
New Positions: Yes, see below

Company Description

Why We Like It:
GME is in the services sector. The company is a video game retailer with over 6,600 stores in 15 countries. The stock gapped down on January 14th after the company issued earnings guidance that was below Wall Street's estimates. The market was already worried about anything retail related after a disappointing holiday shopping season. Traders pounded the sell button and GME plunged to new multi-month lows. The oversold bounce didn't last very long and now GME is testing new relative lows again.

We should probably consider this a more aggressive, higher-risk trade because there is so much short interest. The most recent data listed short interest at 25% of the 113 million share float. That could make GME volatile and we run the risk of the stock seeing short-term spikes. However, long-term GME could be in trouble as the video industry moves more and more to an online, download purchase system instead of consumers going to their local game story to buy games.

Toady's low was $35.80. I am suggesting a trigger to open bearish positions at $35.60. More conservative traders may want to wait for a drop below $35.00 before initiating positions. Our target is $31.00. More aggressive traders could aim lower. The Point & Figure chart for GME is bearish with a $20.00 target.

Trigger @ 35.60

Suggested Position: short GME stock @ (trigger)

- (or for more adventurous traders, try this option) -

Buy the MAR $35 PUT (GME1422o35) current ask $1.63

Annotated chart: