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New Plays
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RDC NLS

New Long Plays

Rowan Cos - RDC - close: 36.31 chg: +0.92 stop: 34.95

Company Description:
Rowan Companies, Inc. is a major provider of international and domestic offshore contract drilling services. The Company also operates a mini-steel mill, a manufacturing facility that produces heavy equipment for the mining and transportation industries, and a drilling products division that has designed or built about one-third of all mobile offshore jack-up drilling rigs, including all 24 operated by the Company. (source: company press release or website)

Why We Like It:
We have wanted to add some energy exposure to the PremierInvestor play list and RDC makes the list tonight. Analysts have been pretty positive on the stock lately with many expecting the company to benefit greatly from rising prices for its jack-up drilling rigs in the Gulf of Mexico as the U.S. oil industry tries to recover from hurricane Katrina. Shares of RDC have been rising in a relatively steady fashion and the recent dip appears to be ending. We want to buy the bounce here following today's 2.5% gain, which was inspired by another analyst upgrade. Our target is the $39.50-40.00 range. More conservative traders may want to wait for a move over $36.65-36.75 to confirm the bounce before initiating new long positions.

Annotated chart:

Picked on September 14 at $36.31
Change since picked: + 0.00
Earnings Date 11/01/05 (unconfirmed)
Average Daily Volume: 2.1 million
 

New Short Plays

Nautilus Inc. - NLS - close: 23.80 chg: -1.65 stop: 26.10

Company Description:
Headquartered in Vancouver, Wash., Nautilus, Inc. helps people achieve a fit and healthy lifestyle through proper exercise, rest and nutrition. With a brand portfolio that includes Nautilus, Bowflex, SchwinnFitness, StairMaster, Trimline and PEARL iZUMi, Nautilus manufactures and markets a complete line of innovative health and fitness products through direct, commercial, retail, specialty and international channels. The Company was formed in 1986 and had sales of $524 million in 2004. It has 1,400 employees and operations in Washington, Colorado, Oklahoma, Texas, Illinois, Virginia, Canada, Switzerland, Germany, United Kingdom, Italy, China, and other locations around the world. (source: company press release or website)

Why We Like It:
Shares of NLS have been climbing in a wide, rising channel for about two years but it looks like a trend change is in the works. The stock broke down under major support near the $24.80 level and its simple and exponential 200-dma's on very big volume today. Technicals are bearish and its MACD indicator just produced a new sell signal. The stock had actually been caught in a trading range between $25 and $26.50 the last several weeks as NLS tried to form a new base near support. This breakdown from is long-term channel and its trading range looks very bearish indeed. Our target is the $20.50-20.00 range before its late October earnings report.

Picked on September 14 at $23.80
Change since picked: + 0.00
Earnings Date 10/25/05 (unconfirmed)
Average Daily Volume: 363 thousand
 

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