NEW BULLISH Plays

The WhiteWave Foods Company - WWAV - close: 28.61 change: +0.28

Stop Loss: 25.75
Target(s): to be determined
Current Gain/Loss: unopened

Entry on April -- at $--.--
Listed on April 19, 2014
Time Frame: 4 to 8 weeks, depending on earnings
Average Daily Volume = 1.5 million
New Positions: Yes, see below

Company Description

Why We Like It:
WWAV is in the consumer goods sector. The company makes consumer packaged foods. Some of the better known brands are the Silk line of soymilk, almondmilk, and coconutmilk, the alpro brand of plant-based foods in Europe, the International Delight brand of coffee creamers, the Land O Lakes half-and-half coffee creamers, and the Horizon organic milk brand.

WWAV's IPO was October 2012. The stock has produced a bumpy ride but the trend is higher as investors bet on the growing health and wellness trend in the U.S. and the world. WWAV's milk alternatives with its Silk brand is the dominant player in its category. In 2013 WWAV saw revenues grow +10% while net income surged +24%.

The stock produced a $4.00 (-13%) correction from its all-time high of $30 in the last few weeks. Now traders have started re-buying WWAV. The stock currently sits just under what looks like short-term resistance near $28.70ish. We're suggesting a trigger to open bullish positions at $28.75.

Earnings are coming up in about three to four weeks. We'll decide then if we plan to exit prior to the report or hold over the announcement.

Trigger @ 28.75

Suggested Position: buy WWAV stock @ (trigger)

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

Buy the Jul $30 call (WWAV1419G30) current ask $1.25

Annotated chart:



NEW BEARISH Plays

DSW Inc. - DSW - close: 33.90 change: -0.22

Stop Loss: 35.25
Target(s): to be determined
Current Gain/Loss: unopened

Entry on April -- at $--.--
Listed on April 19, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 1.25 million
New Positions: Yes, see below

Company Description

Why We Like It:
DSW is in the services sector. The company runs a footwear and accessories chain of stores with over 400 locations. The company last reported earnings in mid March and while net profits beat estimates, revenues missed, margins dipped, and the company lowered their full year guidance.

That's a tough combination for investors accept and shares have been trending lower with a bearish pattern of lower highs and lower lows. DSW just underperformed this week with three failed rallies near $35.00 and now a breakdown under the $34.00 level. You can also see on the long-term chart below that DSW's up trend appears to be broken.

We are suggesting bearish positions now at the opening bell on Monday. We'll start with a stop loss at $35.25. We're not setting a target yet but $30.00 would be a good start. The Point & Figure chart for DSW is bearish with a $26.00 target.

Suggested Position: short DSW stock @ the opening bell

Annotated chart:

Long-term chart:



Whole Foods Market - WFM - close: 48.13 change: -0.39

Stop Loss: 50.35
Target(s): to be determined
Current Gain/Loss: unopened

Entry on April -- at $--.--
Listed on April 19, 2014
Time Frame: exit PRIOR to earnings on May 6th
Average Daily Volume = 4.4 million
New Positions: Yes, see below

Company Description

Why We Like It:
WFM is in the services sector. The company runs a high-end grocery chain of natural and organic foods with over 370 locations. The stock delivered a stellar performance from its 2008 lows but shares appear to have finally peaked back in October last year. Problems started when WFM reported earnings in November 2013 and lowered earnings guidance and same-store sales guidance. WFM did it again when they reported earnings in February but this time they missed both the top and bottom line estimates and then lowered earnings guidance, same-store sales guidance, and gross margins.

The problem seems to be growing competition, which is really starting to impact sales and margins. Just recently WFM lowered prices in the Boston area to compete with Wegmans, new competition in the area. Boston is significant since some estimates suggest the region accounts of almost 10% of all of WFM's sales. WFM is also facing competition on a wider scale from retail giants Wal-Mart (WMT) and Target (TGT).

Technically the bearish trend of lower highs and lower lows in WFM has recently produced a breakdown below major support near the $50 level. We are suggesting bearish positions now at the opening bell on Monday morning with a trigger at $50.35. We're not setting an exit target tonight but plan on exiting prior to earnings on May 6th.

FYI: The point & figure chart has turned bearish with a triple-bottom sell signal and a $42 target.

Suggested Position: short WFM stock @ (the opening bell)

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

Buy the May $47.50 PUT (WFM1417Q47.5) current ask $1.70

Annotated chart: