Real Madrid are watching Watford whizkid Adalberto Peñaranda.

Peñaranda has just signed on-loan to the end of this season with Malaga, after a difficult first-half of the campaign with Udinese.

The Daily Gol says Real coach Zinedine Zidane knows all about the Venezuelan and will have him scouted this term.

If Peñaranda proves himself over the coming months, Real will firm up their interest next summer.

Real president Florentino Perez also has his marketing chiefs doing research on the youngster's commercial potential in South America.