Editor's Note:

In addition to tonight's new candidate, consider these stocks as possible trading ideas:

potential bullish candidates I am watching:

BBBY, UNP, FMC, EMR, CSC, MLM, COO, FDX, and RGR


NEW DIRECTIONAL CALL PLAYS

Molycorp, Inc. - MCP - close: 31.72 change: +1.42

Stop Loss: 29.75
Target(s): 38.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The rare-earth metal miners have gotten a lot of press over the last couple of years thanks to their rocket ride higher in 2010-2011 and their meteoric fall over the last three quarters. Yet now it looks like the industry may have found a bottom. Shares of MCP are breaking out past resistance near $30 and its 50-dma. This stock could see a short squeeze with the most recent data listing short interest at 38.6% of the 51.8 million-share float.

I am suggesting we open small bullish positions at the open on Monday morning but only if both MCP and the S&P 500 index open positive. More nimble traders may want to wait and try and buy another dip near $30 or its 10-dma instead. I do see potential resistance near $35 and its 100-dma but we're going to aim for $38.50 given the chance that MCP does see some short covering.

FYI: The Point & Figure chart for MCP is bullish with a long-term $49 target.

Do not enter position unless MCP and the S&P500 are both positive at the open

- Suggested Positions -

buy the Feb $31 call (MCP1218B31) current ask $1.92

- or -

buy the Mar $35 call (MCP1217C35) current ask $1.42

Annotated Chart:

Entry on January xx at $ xx.xx
Earnings Date 03/08/12 (unconfirmed)
Average Daily Volume = 4.0 million
Listed on January 28, 2012


NEW DIRECTIONAL PUT PLAYS

Cimarex Energy Co - XEC - close: 57.65 change: +0.12

Stop Loss: 60.25
Target(s): 51.00
Current Option Gain/Loss: Unopened
Time Frame: exit prior to earnings on Feb. 15th
New Positions: Yes, see below

Company Description

Why We Like It:
Shares of this oil and gas company continue to underperform. The stock broke down under support near $60 a few days ago. Since then the oversold bounces keep reversing. The larger trend is bearish as well. Plus the Point & Figure chart for XEC is bearish with a $47 target.

More aggressive traders could buy puts now. I am suggesting a trigger to buy puts at $56.75 with a stop loss at $60.25. Our target is $51.00. We do not want to hold over the Feb 15th earnings report.

Trigger to buy puts @ 56.75

- Suggested Positions -

buy the FEB $55 PUT (XEC1218N55) current ask $1.45

Annotated Chart:

Entry on January xx at $ xx.xx
Earnings Date 02/15/12 (confirmed)
Average Daily Volume = 1.0 million
Listed on January 28, 2012