Editor's Note:

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

(bearish ideas) Keep an eye on WCG. A breakdown under support at $45.00 could be a bearish entry point to buy puts. Target the $40 area.



NEW DIRECTIONAL CALL PLAYS

Starwood Hotels - HOT - close: 60.41 change: +0.88

Stop Loss: 58.85
Target(s): 64.50
Current Option Gain/Loss: Unopened
Time Frame: exit prior to earnings on Feb. 7th
New Positions: Yes, see below

Company Description

Why We Like It:
It seems that China has become a hot place to invest again. Traders are suddenly interested in shares of HOT thanks to news the company is building 100 new hotels in China. The stock outperformed today and broke out above round-number resistance at $60.00. I'd like to see some follow through with a rally past its early January high.

We are suggesting a trigger to buy calls at $60.60. If triggered our stop loss is $58.85. Our target is $64.50. However, we will plan to exit prior to the earnings report on Feb. 7th.

Trigger @ 60.60

- Suggested Positions -

buy the Feb $60 call (HOT1316B60) current ask $2.04

Annotated Chart:

Entry on January xx at $ xx.xx
Average Daily Volume = 1.9 million
Listed on January 15, 2012


Red Hat, Inc. - RHT - close: 54.99 change: +0.00

Stop Loss: 53.90
Target(s): 59.25
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Shares of RHT have been stuck trading near the $55 level and its simple 200-dma the last few weeks. However, you'll notice the stock has a bullish pattern of higher lows. This would suggest the stock is about ready to breakout from this consolidation pattern. The January 9th, 2013 high was $55.30. I am suggesting a trigger to buy calls at $55.40. If triggered our target is $59.25. FYI: The Point & Figure chart for RHT is bullish with a $72 target.

Trigger @ 55.40

- Suggested Positions -

buy the Feb $55 call (RHT1316B55) current ask $1.65

Annotated Chart:

Entry on January xx at $ xx.xx
Average Daily Volume = 1.7 million
Listed on January 15, 2012