NEW BULLISH Plays

SolarWinds, Inc. - SWI - close: 44.04 change: +0.28

Stop Loss: 42.45
Target(s): 49.50
Current Gain/Loss: unopened

Entry on February -- at $--.--
Listed on February 15, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 1.27 million
New Positions: Yes, see below

Company Description

Why We Like It:
SWI is in the technology sector. They are a Texas-based company that develops information technology (IT) and infrastructure management software. The stock shot higher in early February following a better than expected earnings report. Wall Street was expecting a profit of $0.34 a share on revenues of $91.65 million. SWI bested estimates with 41 cents a share on revenues of $97.1 million. Management then guided their 2014 revenue estimates higher.

SWI has spent the last few days consolidating after its post-earnings pop higher. Now the stock looks poised to breakout past short-term resistance near $44.00 and its simple 300-dma. The Feb. 6th high was $44.29. I am suggesting a trigger to open bullish positions at $44.50. If triggered our target is $49.50. More aggressive traders or those with a longer time frame may want to aim higher since the Point & Figure chart for SWI is bullish with a $63.00 target.

Trigger @ 44.50

Suggested Position: buy SWI stock @ (trigger)

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

Buy the MAR $45 call (SWI1422C45) current ask $1.30

Annotated chart:



NEW BEARISH Plays

Nuance Communications - NUAN - close: 14.81 change: -0.08

Stop Loss: 15.25
Target(s): 13.05
Current Gain/Loss: unopened

Entry on February -- at $--.--
Listed on February 15, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 5.7 million
New Positions: Yes, see below

Company Description

Why We Like It:
NUAN is in the technology sector. The company is a big player in the voice, natural language understanding, reasoning and system integration software. The stock has fallen a long way from its early 2012 highs near $30. The stock was crushed around Thanksgiving last year after issuing an earnings warning for 2014.

NUAN has bounced from its 2013 lows but the oversold bounce eventually ran out of steam. NUAN reported earnings again just a few days ago that were slightly ahead of expectations but the company disappointed with its revenue guidance again. The stock looks poised to break down below support in the $14.60 area. That could portend a move toward its 2014 lows near $13.00.

Traders should note that activist investor Carl Icahn has a significant stake in NUAN. It was first disclosed back in April 2013 that he had a 9.3% stake in the company. By December 31st his stake had risen to 24%. Carl has a much longer time frame than we do but if more headlines surface about his involvement or him buying more shares it could spark another pop in NUAN's stock price. Therefore I am suggesting we use small positions to limit our risk.

Tonight we're suggesting a trigger to open bearish positions at $14.45, just below Thursday's low. If triggered our target is $13.05. More aggressive traders may want to aim lower. The Point & Figure chart for NUAN is bearish with a $5.50 target.

Trigger @ 14.45

Suggested Position: short NUAN stock @ (trigger)

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

Buy the MAR $14 PUT (NUAN1422o14) current ask $0.30

Annotated chart:

Weekly chart: