NEW BULLISH Plays

Pilgrim's Pride Corp. - PPC - close: 21.06 change: +0.28

Stop Loss: 20.35
Target(s): to be determined
Current Gain/Loss: unopened

Entry on April -- at $--.--
Listed on April 14, 2014
Time Frame: exit PRIOR to earnings on April 30th
Average Daily Volume = 914 thousand
New Positions: Yes, see below

Company Description

Why We Like It:
PPC is in the consumer goods sector. The company produces chicken and chicken-related products. The stock has been showing significant relative strength. You could call this a momentum trade as PPC is up nine weeks in a row and doesn't seem to be slowing down. Shares spent the last two weeks consolidating gains but still managed to close up on the week. Now PPC is poised to breakout to new multi-year highs.

One might speculate, that with beef prices hitting highs all-time record highs in 2014 (when adjusted for inflation), that consumers might buy more chicken as a lower cost alternative.

PPC saw some resistance in the $21.40 area. We're suggesting a trigger at $21.45 to launch bullish positions. At the moment we're planning on this being a short-term trade where we plan to exit prior to PPC's earnings report on April 30th. However, we might be tempted to hold over the announcement.


FYI: The Point & Figure chart for PPC is bullish with a long-term $35.50 target.

Trigger @ $21.45

Suggested Position: buy PPC stock @ (trigger)

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

Buy the May $20 call (PPC1417E20) current ask $1.75

Annotated chart:



NEW BEARISH Plays

Rocket Fuel Inc. - FUEL - close: 36.03 change: -0.60

Stop Loss: 38.75
Target(s): to be determined
Current Gain/Loss: unopened

Entry on April -- at $--.--
Listed on April 14, 2014
Time Frame: exit PRIOR to earnings in mid May
Average Daily Volume = 559 thousand
New Positions: Yes, see below

Company Description

Why We Like It:
FUEL is in the services sector. The company sells an artificial-intelligence solution for digital advertising. It's amazing how quickly Wall Street's or at least investor sentiment on a stock can change. Less than three months ago FUEL was hitting all-time highs above $70.00 a share. Today the stock has lost half its value. The latest earnings report on February 20th looked bullish since FUEL beat estimates on both the top and bottom line and reaffirmed 2014 estimates. Unfortunately for the bulls this stock has obviously fallen out of favor.

FUEL underperformed the market again today with a new all-time low. This should be considered a higher-risk, more aggressive, momentum trade. There are already a lot of shorts in this name. The most recent data listed short interest at 31% of the small 13.5 million share float. That means any bounce could be volatile.

Traders may want to use put options as a way of limiting their risk but shorting FUEL or buying options should be considered a higher-risk move.

Today's low was $35.50. We're suggesting small bearish positions if FUEL can trade at $35.40. No target yet but covering near $30.00 might be a good idea.

FYI: The Point & Figure chart for FUEL is bearish with a $30.00 target.

Trigger @ $35.40

Suggested Position: short FUEL stock @ (trigger)

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

Buy the May $35 PUT (FUEL1417Q35) current ask $3.30

Annotated chart: