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New Plays
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New Plays
Long Plays
Short Plays
None ATI

New Long Plays

Editor's note:

It was a tough job searching for new plays to add to the newsletter this weekend. We looked at several hundred stocks and found very little that looked like a decent play that didn't have earnings in the next few days or so. The major averages (DJIA, S&P 500 and the NASDAQ) all look short-term overbought and due for a correction. Considering the last statement we really hesitate to add new bullish positions here. The same factors make picking bearish candidates a hazardous task as well. The market can always get more overbought. We are adding one new bearish candidate but suggest that our readers use caution heading into the first real week of the Q2 earnings season.

New Short Plays

ATI Tech. - ATYT - close: 12.83 change: -0.36 stop: 13.41

Company Description:
ATI Technologies Inc. is the world leader in the design and manufacture of innovative 3D graphics and digital media silicon solutions. An industry pioneer since 1985, ATI is the world's foremost graphics processor unit (GPU) provider and is dedicated to deliver leading-edge performance solutions for the full range of PC and Mac desktop and notebook platforms, workstation, set-top and digital television, game console and handheld device markets. With 2004 revenues of approximately US $2 billion, ATI has more than 2,700 employees in the Americas, Europe and Asia. (source: company press release or website)

Why We Like It:
The SOX semiconductor has been a huge winner for the bulls over the past couple of weeks. The sector index has shot virtually straight up and burst through major resistance at the 450 level. While this is great news for stocks in the industry group we know nothing goes up forever. Stocks and sectors move in cycles and the SOX is way overdue for a multi-day decline. We suspect that the catalyst for the coming decline will be Intel's (INTC) earnings report on July 19th. Whether the news is good or bad INTC is too overbought and traders are likely to "sell the news" no matter what. Now there is never a guarantee but odds appear to be in favor of a consolidation. We like ATYT because the stock is already in seven-month trend of lower highs and lower lows. The recent bounce in ATYT failed at resistance in the $13.50 region. Friday's decline under the $13.00 mark is a sign of weakness and looks like a sell signal. We are going to target the recent lows. Our actual target will be the $11.50-11.20 range. We're trying to keep our risk minimized with a tight stop above the simple 40-dma, which has been resistance for the past week.

Picked on July 17 at $21.83
Change since picked: - 0.00
Earnings Date 09/22/05 (unconfirmed)
Average Daily Volume: 5.9 million

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