Editor's Note:

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

(bullish ideas)
WAT, WCC, CAT, UA, BYI, HOG, PKG, VMC, PCAR, TJX, CAH, GILD, HD, ETN, CI, WLK, MGA



NEW DIRECTIONAL CALL PLAYS

ServiceNow, Inc. - NOW - close: 59.38 change: +1.72

Stop Loss: 57.40
Target(s): 64.75
Current Option Gain/Loss: Unopened
Time Frame: exit PRIOR to earnings on January 29th
New Positions: Yes, see below

Company Description

Why We Like It:
NOW is in the technology sector. The company is part of the cloud-based IT solutions industry. The stock saw a significant correction from its October 2013 highs but traders stepped in to buy NOW and end the sell-off in mid December. Since then NOW has worked its way higher and this past Friday saw NOW close at all-time highs.

Current momentum looks like it could carry NOW past round-number resistance at $60.00. I am suggesting a trigger to buy calls at $60.25. If triggered our short-term target is $64.75. We will plan to exit prior to NOW's earnings report on January 29th. FYI: The Point & Figure chart for NOW is bullish with an $80 target.

Trigger @ 60.25

- Suggested Positions -

buy the Feb $60 call (NOW1422B60) current ask $3.40

Annotated Chart:

Entry on January -- at $---.--
Average Daily Volume = 1.2 million
Listed on January 11, 2014


Zillow, Inc. - Z - close: 89.82 change: +2.76

Stop Loss: 85.90
Target(s): 99.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Zillow is considered part of the financial sector. The company operates a website and mobile application that provides real estate and home-related information including real estate listing, rental information and more.

The stock experienced a significant correction (about -30%) from its September 2013 highs. Z finally found support near $70 and its 200-dma back in early December. Since then the stock has produced a major bounce thanks in part to short covering. There are a lot of bears hoping this stock will go down. Right now those bears are probably worried given Z's relative strength in January. Odds are good that Z could see more short covering and possibly a short squeeze if the rally continues. The most recent data listed short interest at almost 50% of the very small 27.1 million-share float.

Tonight I am suggesting a trigger to buy calls at $90.25. More conservative investors may want to wait for Z to trade above its January highs near $91.25 before initiating positions. If triggered our target is $99.00.

Keep in mind that Z can be a volatile stock. I would consider this a more aggressive, higher-risk trade. Let's use small positions to limit our exposure. FYI: The Point & Figure chart for Z is bullish with a $106 target.

Trigger @ 90.25 *small positions*

- Suggested Positions -

buy the Feb $95 call (Z1422B95) current ask $4.90

Annotated Chart:

Entry on January -- at $---.--
Average Daily Volume = 959 thousand
Listed on January 11, 2014