NEW DIRECTIONAL CALL PLAYS

Demandware, Inc. - DWRE - close: 64.76 change: +0.64

Stop Loss: 62.75
Target(s): 69.50
Current Option Gain/Loss: Unopened
Time Frame: exit PRIOR to earnings in mid February
New Positions: Yes, see below

Company Description

Why We Like It:
DWRE is in the technology sector. The company operates in the application software industry and provides cloud-based digital commerce solutions. The stock shot higher in early November on better than expected earnings. Then when trading in the mid $60s the stock plunged on November 19th on news that DWRE would issue a secondary offering of almost four million shares at $57. Since then DWRE has recovered with investors buying the dips at DWRE's rising 30-dma for a while. The last couple of weeks have seen DWRE consolidating sideways below resistance at the $65.00 level.

The market's weakness today sparked a drop toward $62.00 but DWRE bounced back and closed in positive territory, outperforming the broader market. The stock looks poised to breakout. I am suggesting a trigger to buy calls at $65.25. If triggered our target is $69.50 but we'll plan to exit prior to earnings in mid February. FYI: The Point & Figure chart for DWRE is bullish with a $77 target.

Trigger @ 65.25

- Suggested Positions -

Buy the Feb $70 call (DWRE1422B70) current ask $2.30

Annotated Chart:

Entry on January -- at $---.--
Average Daily Volume = 275 thousand
Listed on January 02, 2014