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New Plays
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Section 2 Title

New Long Plays

General Electric - GE - close: 36.13 chg: +0.38 stop: 35.15

Company Description:
From jet engines to power generation, financial services to plastics, and medical imaging to news and information, GE people worldwide are dedicated to turning imaginative ideas into leading products and services that help solve some of the world's toughest problems. (source: company website)

Why We Like It:
Shares of Dow-component GE have been in a rocky up trend since it bottomed in May 2004. Now after six weeks of declines and two weeks of consolidating sideways above its 100-dma the stock is beginning to rebound from short-term oversold levels. Its MACD has produced a new buy signal and its short-term oscillators like the RSI and stochastics are both bullish. We like today's breakout over resistance at $36.10 and its simple 50-dma. Plus, the P&F chart is bullish with a long-term $50 target. We want to go long with today's move and target the $37.75-38.00 range. Our time horizon is about six weeks. Conservative traders can wait for confirmation with a move over $36.50.

Picked on January 31 at $36.16
Gain since picked: + 0.00
Earnings Date 01/21/05 (confirmed)
Average Daily Volume: 18.1 million

LSI Logic - LSI - close: 6.11 change: +0.29 stop: 5.74

Company Description:
LSI Logic Corporation focuses on the design and production of high- performance semiconductors for Consumer, Communications and Storage applications that access, interconnect and store data, voice and video. LSI Logic engineers incorporate reusable, industry-standard intellectual property building blocks that serve as the heart of leading-edge systems. LSI Logic serves its global OEM, channel and distribution customers with Platform ASICs, cell-based ASICs, standard products, host bus adapters, RAID controllers and software. In addition, the company supplies storage network solutions for the enterprise.
(source: company press release)

Why We Like It:
It looks like LSI has put in a significant bottom over the last six months. Shares hit a low of $4.01 in late September and have spent the last 2 1/2 months consolidating sideways after a decent October-November rally. Now LSI is breaking out over major resistance at the $6.00 mark and its simple and exponential 200-dma's. Volume on today's move was bullish with approximately 50 percent more shares traded than normal. Earnings were last week and the company beat expectations and raised guidance. We would label a high-risk speculative play for multiple reasons. LSI's P&F chart is currently bearish with a target of $0.00. Second, the SOX semiconductor index is in a two-month downtrend inside a longer 13-month downtrend. We suspect that LSI will continue to buck the trend in the SOX and make a run for the $7.00 level. We're going to use a relatively tight stop at $5.74. If LSI reverses on us we want to be out quickly. More aggressive players might consider a wider stop near under $5.60.

Picked on January 31 at $ 6.11
Gain since picked: + 0.00
Earnings Date 01/27/05 (confirmed)
Average Daily Volume: 4.3 million

New Short Plays

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