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CBG ROG

New Long Plays

CB Rich. Ellis Grp - CBG - close: 41.40 chg: +1.27 stop: 38.49

Company Description:
CB Richard Ellis Group, Inc., a FORTUNE 1000 company headquartered in Los Angeles, is the world's largest commercial real estate services firm (in terms of 2004 revenue). With approximately 13,500 employees, the company serves real estate owners, investors and occupiers through more than 200 offices worldwide (excluding affiliate and partner offices). The company's core services include property sales, leasing and management; corporate services; facilities and project management; mortgage banking; investment management; appraisal and valuation; research and consulting. (source: company press release)

Why We Like It:
Yet another way to play the real estate industry is real estate services and CBG is the biggest fish in the industry. The stock has been consolidating under resistance at the $40.00 level for weeks and just broke through the top of its trading range today with volume coming in almost three times the average. The overall trend is a positive one and its daily and weekly technical oscillators are bullish. We view today's breakout over the $40.00 level as a new entry point. We'll target a move into the $44.50-45.00 range compared to the Point & Figure chart, which points to a $63.00 target. If at all possible we would much prefer to enter the play on a dip back toward the $40.00 region but it may not occur. Readers waiting for a dip risk CBG getting away from us but it is the strategy we would suggest. 

Picked on June 20 at $41.40
Change since picked: + 0.00
Earnings Date 08/01/05 (unconfirmed)
Average Daily Volume: 466 thousand

New Short Plays

Rogers Corp - ROG - close: 42.40 change: -1.76 stop: 45.01

Company Description:
Rogers Corporation, headquartered in Rogers, CT, U.S.A., develops and manufactures high-performance specialty materials, which serve a diverse range of markets including: portable communication devices, communication infrastructure, consumer products, computer and office equipment, ground transportation, and aerospace and defense. Rogers operates manufacturing facilities in Connecticut, Arizona, and Illinois in the U.S., in Gent, Belgium, in Suzhou, China, and in Hwasung City, Korea. Sales offices are located in Belgium, Japan, Taiwan, Korea, China, and Singapore. (source: company press release)

Why We Like It:
We like ROG for multiple reasons. First the stock has been rising for several weeks and looked very overbought and extended and due for a pull back. Second, today's decline is a clear breakdown of its narrow rising channel. Third, today's decline is the culmination of a five-day attempt (and failure) to breakout over serious resistance dating back to last July. Fourth, the decline today was fueled by volume three times the average and it helped produce a new MACD sell signal. Now, before you back up the truck on shorting this stock here are the warnings. ROG bounced back from its intraday low to close above its simple 200-dma, which at this time is still technical support. Bears need to be aware that the $40.00 level could easily be round-number support making the risk-reward ratio less than desirable. We normally don't play a stock with such low average volume and combined with the low 16 million share float ROG could be pushed around more easily creating painful volatility. Plus, the stock could very easily rebound tomorrow and fill the gap from Monday morning, putting it near the $44.00 level. As a matter of fact traders may want to wait and see if ROG does indeed bounce back toward the $44.00 level and open new short positions there. We're going to set our stop above resistance at $45.00. Our target is the 50-dma near $39.00, which would look a lot better if we do get the failed rally near $44.00. We will not hold over ROG's mid-July earnings report.

Picked on June 20 at $42.40
Change since picked: - 0.00
Earnings Date 07/18/05 (unconfirmed)
Average Daily Volume: 94 thousand

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