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New Plays
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EMCCREE
 GLW

New Long Plays

EMC Corp - EMC - close: 13.21 change: +0.13 stop: 12.95

Company Description:
EMC Corporation is the world leader in products, services and solutions for information storage and management that help organizations extract the maximum value from their information, at the lowest total cost, across every point in the information lifecycle. (source: company press release or website)

Why We Like It:
Analysts have turned more bullish on EMC lately even though the GHA.X hardware index has broken down from a four-month sideways consolidation. If you look at the daily chart for EMC you'll notice the rally higher in late September. This run helped push the stock through its trendline of resistance dating back to July. It's common to see stocks pull back and retest the broken resistance as new support and that's what EMC appears to be doing with the pull back toward the $13.00 level. We believe that EMC could be poised to run higher into its earnings report due out October 19th, especially with the NASDAQ near support and poised to produce an oversold bounce. Our plan is to initiate longs with EMC above $13.00 and target a move into the $14.25-14.50 range. We'll use a tight stop at $12.95 to limit our risk. We will plan to exit on October 18th to avoid holding over the earnings report.

Picked on October 09 at $13.21
Change since picked: + 0.00
Earnings Date 10/19/05 (confirmed)
Average Daily Volume: 12.8 million
 

New Short Plays

Cree Inc. - CREE - close: 23.38 chg: -0.68 stop: 24.01

Company Description:
Cree, Inc. is a market-leading innovator and manufacturer of semiconductors that enhance the value of solid-state lighting, power and communications products by significantly increasing their energy performance. Key to Cree's market advantage is unrivaled materials expertise in silicon carbide (SiC) with gallium nitride (GaN) to deliver chips and packaged devices that can handle more power in a smaller space while producing less heat than other available technologies, materials and products. Cree drives its increased Return on Energy(TM) (ROE(TM)) solutions into multiple applications including exciting alternatives in brighter and more tunable light for general illumination, backlighting for more vivid displays, optimized power management for high-current switch-mode power supplies and variable speed motors, and more effective wireless infrastructure for data and voice communications. Cree customers range from innovative lighting fixtures makers to defense related federal agencies. (source: company press release or website)

Why We Like It:
CREE looks poised to breakdown from its seven-week trading range between $23.50 and $26.00. The stock was already trading in a bearish pattern with the sharp double-top pattern with peaks in May and August. Technicals are naturally bearish following last week's four-day slide. We want to see confirmation that CREE is going to turn lower. Our plan is to use a trigger at $22.99 to open the play. If triggered we will target the March lows (20.68). We'll plan to exit in the $21.00-20.75 range. The biggest risk here is a short squeeze. The most recent data puts short interest at 16.4% of CREE's 75.5 million shares outstanding. Therefore traders should consider positions very carefully! We plan to exit before the company's October 20th earnings report so it's very possible that CREE may not hit our target before we close the play.

Picked on October xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/20/05 (confirmed)
Average Daily Volume: 1.3 million

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Corning Inc. - GLW - close: 18.54 chg: -0.06 stop: 20.01

Company Description:
Corning Incorporated is a diversified technology company that concentrates its efforts on high-impact growth opportunities. Corning combines its expertise in specialty glass, ceramic materials, polymers and the manipulation of the properties of light, with strong process and manufacturing capabilities to develop, engineer and commercialize significant innovative products for the telecommunications, flat panel display, environmental, semiconductor, and life sciences industries. (source: company press release or website)

Why We Like It:
GLW was a big winner for investors through late spring and summer of this year. Yet now it looks like the trend is changing. Shares broke down below its bullish trend and simple 50-dma about three weeks ago. The stock dipped to the 100-dma and then produced an oversold bounce. The bounce hit round-number resistance at the $20.00 level and failed. This really was the bearish entry point and we're just hopping on a couple of days late. A quick look at the Point & Figure chart shows that the breakdown in September produced a new sell signal that now points to a $13.00 target. We are going to target a decline into the $16.50-16.00 range since the $16.00 level was support back in June and July and is currently underpinned by its exponential 200-dma. We do plan to exit ahead of the company's October 26th earnings report. If shares bounce again next week look for a failed rally under the 50-dma (19.50) or the $20.00 level as a new entry point.

Picked on October 09 at $18.54
Change since picked: + 0.00
Earnings Date 10/26/05 (confirmed)
Average Daily Volume: 11.9 million
 

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