Editor's Note:

In addition to tonight's new candidates, consider these stocks as possible trading ideas and watch list candidates:

(bullish ideas) TDW, PX, ROP, IHS, BCR, DDS, ROST, PETM, DSW, WLL, LTD, BYI, DG, CLB, GCO, GPI


NEW DIRECTIONAL CALL PLAYS

Alliance Data Sys. - ADS - close: 130.34 change: +0.53

Stop Loss: 126.75
Target(s): 137.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
ADS reported earnings a couple of weeks ago on the 19th. They beat estimates by 19 cents but guided lower for the second quarter. The market did not penalize them for the lowered guidance. Shares are now hitting new highs as traders buy the dips. That might be due to the high short interest as bears try and cover. The most recent data listed short interest at 18% of the small 48.7 million share float.

The high on Friday was $130.66. I am suggesting a trigger to buy calls at $130.75 with a stop loss at $126.75, just under the 20-dma. Our target is $137.50.

Trigger @ $130.75

- Suggested Positions -

buy the May $130 call (ADS1219E130) current ask $2.55

- or -

buy the Jun $135 call (ADS1216F135) current ask $1.80

Annotated Chart:

Entry on April xx at $ xx.xx
Earnings Date 07/19/12 (unconfirmed)
Average Daily Volume = 700 thousand
Listed on April 28, 2012


NetEase, Inc. - NTES - close: 60.00 change: -0.42

Stop Loss: 57.95
Target(s): 64.75
Current Option Gain/Loss: Unopened
Time Frame: exit prior to the mid May earnings report
New Positions: Yes, see below

Company Description

Why We Like It:
NTES is a Chinese Internet stock. Shares have spent a few weeks trying to get past resistance near $60.00. At the same time the stock is channeling higher. Nimble traders could try buying a dip near the 20 or 30-dma with a tight stop loss. I am suggesting we use a trigger to buy calls on a rise at $60.75 instead. We'll use a stop loss at $57.95 to start. Our exit target is $64.75. We do not want to hold over the mid May earnings report. FYI: The Point & Figure chart for NTES is bullish with a $68 target.

Trigger @ $60.75

- Suggested Positions -

buy the May $60 call (NTES1219E60) current ask $2.40

- or -

buy the May $65 call (NTES1219E65) current ask $0.70

Annotated Chart:

Entry on April xx at $ xx.xx
Earnings Date 05/16/12 (unconfirmed)
Average Daily Volume = 588 thousand
Listed on April 28, 2012