Editor's Note:

Additional Trading Ideas:

In addition to tonight's new candidate(s), consider these stocks as possible trading ideas and watch list candidates. Some of these may need to see a break past key support or resistance:

(bearish ideas)
TRAK, POWI, MKTX, FRGI, ESI, BLMN



NEW BEARISH Plays

Jacobs Engineering Group - JEC - close: 54.48 change: -1.37

Stop Loss: 56.75
Target(s): to be determined
Current Gain/Loss: unopened

Entry on May -- at $--.--
Listed on May 14, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 1.4 million
New Positions: Yes, see below

Company Description

Why We Like It:
JEC is in the services sector. The company provides construction services around the world. It would appear that the long-term rally in JEC has run out of steam. Back in January this year JEC was hitting new 5-year highs. They reported earnings on January 23rd and missed estimates by one cent. The stock lost -10% in the following two weeks. Since then JEC has been building a bearish pattern of lower highs.

Investors were disappointed again with JEC's earnings in April. Wall Street was expecting a profit of 89 cents a share on revenues of $3.33 billion. JEC delivered a profit of 63 cents and revenues of $3.18 billion. Management then lowered their guidance. The stock reacted with a -8% plunge.

The oversold bounce from this post-earnings drop has failed at resistance and now JEC is breaking down below support near $56.00. It could be the start of another big leg lower.

We are suggesting bearish positions tomorrow at the opening bell with a stop loss at 56.75, just above yesterday's high. We're not setting an exit target tonight but I would aim for the $50-47.50 zone.

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

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

Buy the Jun $55 PUT (JEC140621P55) current ask $1.65

*I've provided the more standardized option symbol format.
symbol-year-month-day-put-strike

Annotated chart:

Weekly chart:



Medidata Solutions - MDSO - close: 34.73 change: -1.17

Stop Loss: 36.55
Target(s): to be determined
Current Gain/Loss: unopened

Entry on May -- at $--.--
Listed on May 14, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 1.9 million
New Positions: Yes, see below

Company Description

Why We Like It:
MDSO is part of the technology sector. The company is in the healthcare technology services industry. Their focus is cloud-based software for clinical research. The stock peaked in early March at all-time highs. It's not a coincidence that the NASDAQ also peaked in early March. Traders started selling the momentum names and high-growth names and MDSO was on the list.

The stock began to tumble sharply in late March. MDSO would see these sharp, oversold bounces that failed three or four days later. The big drop on April 22nd was a reaction to MDSO's earnings. The company missed both the top and bottom line estimates.

MDSO, with a $30 drop from its highs, is still expensive with a P/E ratio of 192. It looks like the latest bounce is rolling over. We are suggesting bearish positions tomorrow morning at the open. We'll try and limit our risk with a stop loss at $36.55, just above yesterday's high. We're not setting at target yet but odds are good the $30 level could be round-number support.
FYI: The Point & Figure chart for MDSO is bearish with a $23.00 target.

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

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

Buy the Jul $35 PUT (MDSO140719P35) current ask $3.20

*I've provided the more standardized option symbol format.
symbol-year-month-day-put-strike

Annotated chart: