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New Plays
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ABFS ANSI
DOW  
WAT  

New Long Plays

Arkansas Best - ABFS - close: 41.67 chg: +0.81 stop: 40.75

Company Description:
Arkansas Best Corporation, headquartered in Fort Smith, AR, is a diversified transportation holding company with two primary operating subsidiaries. ABF Freight System, Inc., in continuous service since 1923, provides national transportation of LTL general commodities throughout North America. Clipper is an intermodal marketing company that provides domestic freight services, utilizing rail and over-the-road transportation. (source: company website)

Why We Like It:
The transportation and trucking sector were huge winners in 2004 and ABFS certainly enjoyed a very strong rally from May through December last year. As a big 2004 winner it was subject to the early January sell-off as investors did some long overdue profit taking. Yet it's no coincidence that the selling paused at ABFS' 38.2 percent Fibonacci retracement near $38.50. Now ABFS has consolidated its January pull back for over two weeks and looks poised to breakout through the top of this trading range and its simple 50-dma directly overhead. If this occurs we suspect that ABFS will make another run at its highs near $46.75. Our plan is to use a TRIGGER at $42.51 to capture. Our target will be the $46.00-46.50 range.

Picked on February 2 at $xx.xx <-- see TRIGGER
Gain since picked: + 0.00
Earnings Date 01/27/05 (confirmed)
Average Daily Volume: 259 thousand

Dow Chemical - DOW - close: 51.53 change: +0.71 stop: 49.50

Company Description:
Dow is a leader in science and technology, providing innovative chemical, plastic and agricultural products and services to many essential consumer markets. With annual sales of $40 billion, Dow serves customers in 175 countries and a wide range of markets that are vital to human progress, including food, transportation, health and medicine, personal and home care, and building and construction, among others. Committed to the principles of sustainable development, Dow and its 43,000 employees seek to balance economic, environmental and social responsibilities. (source: company website)

Why We Like It:
Dow chemical is breaking out to new all-time highs after three-months of consolidating sideways. Long-term the stock has a strong up trend and a pattern of consolidating before the next leg higher. Given the recent trading range and today's breakout we believe DOW is ready to launch into its next leg. Short-term technicals are positive. Its MACD is in a buy signal and volume is rising on the rally. The P&F chart is bullish with a $65.00 target. Plus, its recent earnings results were positive as the company beat estimates by 15 cents a share. Our plan is wait and go long with a trigger at $52.01. This would produce a new triple-top breakout buy signal on its P&F chart. Our eight-week target is the $56.00 level.

Picked on February 2 at $xx.xx <-- see TRIGGER
Gain since picked: + 0.00
Earnings Date 01/27/05 (confirmed)
Average Daily Volume: 3.5 million

Waters Corp - WAT - close: 50.20 change: +0.49 stop: 46.95

Company Description:
Waters Corporation holds worldwide leading positions in three complementary analytical technologies - liquid chromatography, mass spectrometry and thermal analysis. These markets account for $4.5 - $5.0 billion of the overall $20 + billion analytical instrument market. (source: company website)

Why We Like It:
A strong earnings report and a positive market has given WAT enough fuel to power through major resistance at the $50.00 mark. The stock is closing at new three-year highs and we don't see any major resistance until the $56-57 level. The P&F chart is bullish with a double-top breakout buy signal and a $67 target. We also like the strong double-bottom formed in August and October of 2004 and given the consolidation ahead of its recent earnings we suspect that WAT is beginning its next leg higher. We'll start with a stop loss under $47.00, where shares found support two weeks ago and we'll target a move to $56.00. Our time frame is about eight weeks.

Picked on February 2 at $50.20
Gain since picked: + 0.00
Earnings Date 01/27/05 (confirmed)
Average Daily Volume: 643 thousand

New Short Plays

Advanced Neuromodulation - ANSI - cls: 37.38 chg: -1.54 stop: 39.01

Company Description:
Advanced Neuromodulation Systems designs, develops, manufactures and markets implantable systems used to manage chronic intractable pain and other disorders of the central nervous system. Fortune magazine recently ranked ANS as the 8th fastest growing small company in its annual list of the Top 200 Fastest Growing Small Companies in the United States. Forbes magazine recently recognized ANS as one of America's 200 Best Small Companies. Frost & Sullivan, an international strategic market research firm, also recently presented ANS with its Product Innovation Award, recognizing ANS as the technology innovation leader in the neurostimulation market and ANS' Genesis. Implantable Pulse Generator system as the most advanced fully implantable spinal cord stimulator on the market. (source: company website)

Why We Like It:
We have had our eye on ANSI ever since shares reversed the breakout last week. The stock had been consolidating in a bullish pattern for most of November, December and January. Shares broke out to the upside on January 27th but this proved to be a bull trap. The next day completely reversed its gains and painted a bearish engulfing candlestick on major volume. We waited to see some confirmation and today's drop under the 50-dma on volume over 2.5 times the norm appears to be our entry point. Technical traders who look at the weekly chart will note that ANSI performed a perfect failed rally reversal at its descending trendline. There is a risk for the bears that ANSI could find support near $36 and/or its 100-dma and exponential 200-dma but we suspect that ANSI can reach the simple 200-dma near $34.00 before its February 17 earnings report. We do not plan to hold over the event. We'll start the play with a stop above today's high but if ANSI trades over $38.50 we may exit early. Given the short time frame and the fact that we're going against the grain on its P&F chart makes this a slightly more aggressive play.

Picked on February 2 at $37.38
Gain since picked: - 0.00
Earnings Date 02/17/05 (confirmed)
Average Daily Volume: 373 thousand

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