NEW BULLISH Plays

American Airlines Group - AAL - close: 36.17 change: +0.51

Stop Loss: 34.45
Target(s): 39.85
Current Gain/Loss: unopened

Entry on February -- at $--.--
Listed on February 20, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 13.3 million
New Positions: Yes, see below

Company Description

Why We Like It:
AAL is in the services sector. They are a major airline with 6,700 flights a day. The airline group has been very strong. Rising oil prices and a very tough winter full of storms that have caused massive delays and canceled flights have not slowed the rally in this industry.

Shares of AAL ended the week at new multi-year highs after consolidating along the $34.00 level. Friday's high was $36.45. We're suggesting a trigger to open bullish positions at $36.50. If triggered our target is $39.85. More nimble traders might want to consider buying a dip instead of a breakout.

Trigger @ 36.50

Suggested Position: buy AAL stock @ (trigger)

Annotated chart:



NEW BEARISH Plays

Eaton Vance - EV - close: 36.17 change: -0.64

Stop Loss: 37.05
Target(s): 30.50
Current Gain/Loss: unopened

Entry on February -- at $--.--
Listed on February 20, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 1.0 million
New Positions: Yes, see below

Company Description

Why We Like It:
EV is in the financial sector. The company is in the asset management business. Unfortunately for shareholders the trend looks bearish. Shares failed at resistance near $44 multiple times in 2013. Now it's hovering near key support near the $36.00 level. A breakdown here could signal a drop toward the $30 area.

The February 5th low was $35.59. I am suggesting a trigger to open bearish positions at $35.50. If triggered our target is $30.50. The Point & Figure chart for EV is bearish with a $28.00 target.

Trigger @ 35.50

Suggested Position: short EV stock @ (trigger)

Annotated chart:

Weekly chart:



Rackspace Holdings - RAX - close: 33.48 change: -1.12

Stop Loss: 36.05
Target(s): 27.00
Current Gain/Loss: unopened

Entry on February -- at $--.--
Listed on February 20, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 4.7 million
New Positions: Yes, see below

Company Description

Why We Like It:
RAX is in the technology sector. The company provides cloud-computing services, manages web-based IT services, and web hosting. The company reported earnings on February 10th and results were mostly in-line with estimates. Guidance wasn't that bad but the CEO announced his departure. That may have spooked investors. Of course shares of RAX were already in a long-term down trend. The company is facing major competition from all the big technology heavyweights, especially from Amazon.com's web services.

The oversold bounce in RAX has already failed under its 50-dma. Shares look poised to drop toward $30.00 and potentially lower since the P&F chart is forecasting at $21 target.

I am suggesting new bearish positions now with a stop loss at $36.05. Our target is the $27-25 zone. However, RAX will have to crack the $30.00 level first and $30.00 could be round-number support. Shares are likely to bounce on its first touch of the $30 mark.

NOTE: RAX does have an above average amount of short interest, about 12% of the 113 million share float. That could make the stock volatile with potential short squeezes. Investors will want to limit their position size and/or use put options to limit their risk.

*small positions*

Suggested Position: short RAX stock @ (the open)

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

Buy the Mar $32.50 PUT (RAX1422o32.5) current ask $1.10

Annotated chart: