Option Investor
New Plays
HAVING TROUBLE PRINTING?
Printer friendly version
New Plays
Long Plays
Short Plays
TICKERTICKER

New Long Plays

Benchmark Electronic - BHE - cls: 32.80 chg: +0.74 stop: 31.49

Company Description:
Benchmark Electronics, Inc. is in the business of manufacturing electronics and provides its services to original equipment manufacturers of computers and related products for business enterprises, medical devices, industrial control equipment, testing and instrumentation products, and telecommunication equipment. Benchmark's global operations include facilities in eight countries. (source: company press release)

Why We Like It:
There has been talk lately of a bottom forming in the electronics manufacturing sector and BHE is a popular pick for analysts suggesting a bullish turnaround ahead. The recent earnings report was positive and the share price looks ready to breakout from its current consolidation phase. Shares just broke out over the simple 50-dma. Meanwhile technicals like the MACD, RSI and stochastics are all positive. The P&F chart is mixed and shows BHE near support. Our plan is to go long on a breakout above the early February high and the 100-dma. Our trigger will be at $33.51. Our target is the $37.00 level.


 

Picked on February xx at $xx.xx <-- see TRIGGER
Gain since picked: + 0.00
Earnings Date 02/08/05 (confirmed)
Average Daily Volume: 453 thousand

---

Broadcom Corp - BRCM - close: 33.60 chg: +0.50 stop: 31.99

Company Description:
Broadcom Corporation is a global leader in wired and wireless broadband communications semiconductors. Our products enable the convergence of high-speed data, high definition video, voice and audio at home, in the office and on the go. Broadcom provides manufacturers of computing and networking equipment, digital entertainment and broadband access products, and mobile devices with the industry's broadest portfolio of state-of-the-art system-on-a-chip and software solutions. These solutions support our core mission: Connecting everything(R). (source: company press release)

Why We Like It:
Whether or not you believe the SOX semiconductor index is short-term overbought or not is up for discussion. I would tend to lean with those who think the sector is due for a pull back. However, you can't deny that the SOX is testing major resistance at its 200-week moving average - a level of technical resistance that has held the group back for over a year. If the SOX can breakout over this moving average it could spark a significant round of short covering. We believe that BRCM could benefit greatly from just such a move in the SOX. Unfortunately it would be challenging to time an entry in BRCM on a move in the SOX. Instead we're going to use a TRIGGER to catch a breakout in BRCM. The stock is already breaking out over its simple 200-dma and looks ready to move higher after more than two months of consolidation between $30-35 (add this to the previous three months of building a bottom near $25-26). Our entry point will be $34.55 above the early December highs. More conservative traders may want to wait for BRCM to trade over the $35.00 level, which would normally be seen as round-number, psychological resistance. Our target is the $39-40 range. Remember to keep an eye on the SOX. You may not want to enter if BRCM hits our trigger if the SOX is turning lower.


 

Picked on February xx at $xx.xx <-- see TRIGGER
Gain since picked: + 0.00
Earnings Date 01/27/05 (confirmed)
Average Daily Volume: 9.2 million

New Short Plays

None today.

Premier Investor New Play Archives