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99c Only Stores - NDN - close: 9.40 change: -0.20 stop: 10.11

Company Description:
99 Cents Only Stores, the nation's oldest existing one-price retailer, operates 225 retail stores in California, Texas, Arizona and Nevada, and a wholesale division called Bargain Wholesale. 99 Cents Only Stores emphasizes name-brand consumables priced at an excellent value in attractively merchandised stores, where nothing is ever over 99 cents. (source: company press release or website)

Why We Like It:
We seriously thought about adding NDN to the list as a short about a week ago when the stock broke down under significant support at the $10.00 mark. Yet we choose to wait. The stock had been down multiple sessions in a row and looked a bit oversold. We figured that an oversold bounce back toward the $10 level, which should now be resistance, would be a much better entry point to consider shorts. Thus far the oversold bounce has stalled at the $9.75 level. That may be the best it can do. NDN and the rest of the $1.00 stores (DG, FDO) seem to all be suffering together in an industry wide decline. Currently NDN's Point & Figure chart points to a very bearish $3.00 target. That looks like a long-term target. Unfortunately, we cannot hold the play too long if we're going to avoid holding over NDN's late October earnings. We'll target a decline into the $8.60-8.50 range over the next four weeks. The two biggest risks we see are earnings and long-term support. NDN's Q3 earnings date has not yet been announced so we may have less than four weeks for the play to work. Plus, there is potential support near $9.37 dating back to November of 1999.

Picked on September 27 at $ 9.40
Change since picked: + 0.00
Earnings Date 10/20/05 (unconfirmed)
Average Daily Volume: 581 thousand

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