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New Plays
Long Plays
Short Plays
BNI ACAT
KWK CPWM

New Long Plays

Burlington N. Santa F. - BNI - cls: 56.75 chg: +0.80 stop: 53.95

Company Description:
BNSF's subsidiary, BNSF Railway Company, operates one of the largest railroad networks in North America, with about 32,000 route miles covering 28 states and two Canadian provinces. The railway is among the world's top transporters of intermodal traffic, moves more grain than any other American railroad, transports the components of many of the products we depend on daily, and hauls enough coal to generate about ten percent of the electricity produced in the United States. (source: company press release or website)

Why We Like It:
Rising fuel costs make railroad operators like BNI look more and more attractive. That is what is driving shares of BNI to breakout over resistance near $56.00 and hit new all-time highs. Volume on today's breakout was above average. Technicals are positive and its Point & Figure chart points to an $80.00 target. We suggest using today's breakout as a new bullish entry point but if you prefer readers can look for a dip back toward $56.00 as a more attractive entry. Our target is the $59.75-60.00 range before the company reports earnings in late October.

Annotated chart:

Picked on September 20 at $56.75
Change since picked: + 0.00
Earnings Date 10/25/05 (unconfirmed)
Average Daily Volume: 2.0 million

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Quicksilver - KWK - close: 43.68 change: +0.78 stop: 39.99

Company Description:
Fort Worth, Texas-based Quicksilver Resources is a natural gas and crude oil production company engaged in the development and acquisition of long-lived natural gas and crude oil properties. The company, widely recognized as a leader in the development and production of unconventional natural gas reserves, including coal bed methane, shale gas, and tight sands gas, is listed on the New York Stock Exchange (KWK). It has U.S. offices in Fort Worth, Texas; Granbury, Texas; Gaylord, Michigan; Corydon, Indiana and Cut Bank, Montana. Quicksilver also has a Canadian subsidiary, MGV Energy Inc., located in Calgary, Alberta. (source: company press release or website)

Why We Like It:
We believe that the Premier Investor play list needs more exposure to the energy markets so we're adding KWK. Not only is it a crude oil producer but KWK's main product is natural gas. We agree with recent reports that natural gas is going to be a big play this winter. The U.S. was already running a shortage of natural gas over summer and the damage caused by hurricane Katrina put us at a deeper natural gas storage deficit. The price of natural gas has already sky rocketed but we don't believe we've seen the highs for the year just yet. If hurricane Rita does hit the Texas coast and cause more refinery and production shutdowns then oil and natural gas could easily spike to new highs again. We like KWK following Monday's rebound from round-number support near $40.00 and technical support near its 100-dma. The current bounce also happens to be a rebound from its 18-month trendline of higher lows. Volume has been very strong on the current rally as well, which suggests more strength ahead. Here's the plan: we're suggesting longs here above the simple 50-dma (42.15). Our target is the $49.00-50.00 range before the company reports earnings on November 8th. We will not hold over the earnings report. You the reader have multiple options for entry points. You could wait for a dip back toward $42.00 and buy a bounce there. You could look for a new relative high over $45.00, which would also produce a new buy signal on its P&F chart. We are using a wide stop to make sure KWK has room to maneuver and withstand what will probably be a volatile second half of September.

Annotated chart:

Picked on September 20 at $43.68
Change since picked: + 0.00
Earnings Date 11/08/05 (unconfirmed)
Average Daily Volume: 844 thousand
 

New Short Plays

Arctic Cat - ACAT - close: 20.08 chg: -0.83 stop: 21.11

Company Description:
Arctic Cat Inc., based in Thief River Falls, Minn., designs, engineers, manufactures and markets all-terrain vehicles (ATVs) and snowmobiles under the Arctic Cat brand name, as well as related parts, garments and accessories. (source: company press release or website)

Why We Like It:
Shares of ACAT have been struggling the last few months after its late Spring breakdown. Odds are investors are worried about sales growth. Rising fuel costs not only make the toys that ACAT produces more expensive to ride but they also impact consumers discretionary money to buy them in the first place. Shares of ACAT and its rival PII both look poised for more weakness. Today's sell-off in ACAT was powered by very heavy volume about five times the norm. The Point & Figure chart is already very bearish with an $8.00 price target. Aggressive traders may want to jump in right here but we're going to wait. We want to see confirmation that ACAT is breaking down. The stock is currently stuck in a $20.00-22.00 trading range. We're going to use trigger at $19.79 to confirm the move. If triggered we'll target a decline into the $18.25-18.00 range. We will not hold over ACAT's late October earnings report.

Picked on September xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/20/05 (unconfirmed)
Average Daily Volume: 107 thousand

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Cost Plus - CPWM - close: 19.78 change: -0.61 stop: 21.31

Company Description:
Cost Plus, Inc. is a leading specialty retailer of casual home living and entertaining products. As of July 30, 2005, the Company operated 246 stores in 31 states compared to 220 stores in 27 states as of July 31, 2004. (source: company press release or website)

Why We Like It:
Retailers are getting hammered. Rising fuel costs have pushed consumer confidence numbers lower and concerns are rising that the next round of earnings reports could be worse than expected. The RLX retail has broken down below technical support at its simple and exponential 200-dma's, lead in party by Wal-Mart (WMT), who hit new three-year lows today. Unfortunately for shareholders of CPWM the term "new lows" is not a new one. The stock has been stuck in a bearish trend for a couple of years now. Today's breakdown under round-number, psychological support at the $20.00 level pushed CPWM to new three-year lows. Today's decline also produced a new triple-bottom breakdown sell signal on its P&F chart, which now points to a $14.00 target. We are going to target a move into the $16.50-16.00 range. Our biggest concern is a potential short squeeze. CPWM has a float of about 22.0 million shares and the latest data put short interest at about 11 percent of the float. Therefore we suggest our readers tread softly. Use small positions and monitor your stop losses carefully. We will close this play ahead of CPWM's mid November earnings report.

Picked on September 20 at $19.78
Change since picked: + 0.00
Earnings Date 11/17/05 (unconfirmed)
Average Daily Volume: 390 thousand
 

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