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DLXCECO

New Long Plays

Deluxe Corp - DLX - close: 40.16 chg: +0.64 stop: 38.99

Company Description:
Deluxe Financial Services (Deluxe) is a business unit of Deluxe Corporation. Building on the company's history as the leading check printer, Deluxe uses its knowledge and understanding of consumer preferences to orchestrate outstanding customer experiences for the financial institutions it serves. Deluxe offers a variety of checks and related products to enhance customer satisfaction, strengthen check program security, increase revenue and improve efficiency. (source: company press release or website)

Why We Like It:
Breakout alert! After eight weeks of churning sideways between $38.00 and $40.00 shares of DLX have finally broken through resistance at the top of its range. If you're the optimistic type then we could call this a new base. Unfortunately, longer-term trends suggest that DLX has a tough fight ahead of it. The good news for us is that the stock can probably rally toward the $42.00 region before encountering much resistance. We are going to suggest longs here above the $40.00 level and target a move into the $41.90-42.00 range. One note of caution. Volume on Friday's breakout wasn't what it should have been and shares are testing the 100-dma near 40.17. More conservative types may want to make sure that DLX is indeed headed higher before initiating positions. We will plan to exit ahead of DLX's late October earnings report.

Picked on October 02 at $40.16
Change since picked: + 0.00
Earnings Date 10/28/05 (unconfirmed)
Average Daily Volume: 205 thousand
 

New Short Plays

Career Educ. - CECO - close: 35.56 chg: -0.53 stop: 37.51

Company Description:
Career Education Corporation is one of the largest providers of private, for-profit postsecondary education and has a presence in both on-campus and online education. CEC's Colleges, Schools and Universities Group operates more than 80 campuses in the U.S., Canada, France, the United Kingdom and the United Arab Emirates and offers doctoral degree, master's degree, bachelor's degree, associate degree and diploma programs in the career-oriented disciplines of business studies, visual communication and design technologies, health education, information technology, and culinary arts. The Online Education Group operates American InterContinental University Online and Colorado Technical University Online and offers a variety of degrees in information technology, business, visual communication and education. CEC's total student population on July 31, 2005 was approximately 92,000 students. (source: company press release or website)

Why We Like It:
Shares of CECO have been stuck in a trading range for most of the last four months. Now that the recent oversold bounce from the bottom of the range has failed shares of CECO look poised to breakdown. The Point & Figure chart already points lower but we want to use a trigger to confirm CECO's direction. Our suggested entry point to short the stock is $34.99. More aggressive traders might want to try and jump the gun with an entry under $35.25, which seems to be the bottom of its trading range and thus support. If we are triggered we'll target a decline to the $31.00 level. We will plan to exit before CECO's late October earnings report. FYI: one of the biggest risks in trading CECO is a short squeeze. The stock has relatively high short interest at 13.9% of its float. Consider this play carefully!

Picked on October xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/26/05 (unconfirmed)
Average Daily Volume: 1.6 million
 

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