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IPCR SYY
CCI  

New Long Plays

IPC Holdings - IPCR - close: 27.97 chg: +1.64 stop: 26.99

Company Description:
IPC Holdings, Ltd., through its wholly owned subsidiary IPCRe Limited, provides property catastrophe reinsurance and, to a limited extent, aviation, property-per-risk excess and other short-tail reinsurance on a worldwide basis. (source: company press release or website)

Why We Like It:
News that IPCR had sold more than 13 million shares sent the stock higher. Normally, when a company sells more shares investors react negatively since it dilutes their holdings. Consider the reaction to the news we suspect that IPCR may have put in a new bottom after its hurricane-provoked eight-week slide. Even on a technical basis the stock is very oversold and today's move certainly gave new life to the technical indicators. We want to see some confirmation of this move. We'll suggest a trigger at $28.11 and target a quick move to the $29.95-30.00 range, which is the bottom of its October gap down. More aggressive traders might want to aim higher.

Picked on November xx at $xx.xx <-- see Trigger
Change since picked: + 0.00
Earnings Date 10/25/05 (confirmed)
Average Daily Volume: 408 thousand

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Crown Castle - CCI - close: 25.81 change: +1.29 stop: 24.24

Company Description:
Crown Castle International Corp. engineers, deploys, owns and operates technologically advanced shared wireless infrastructure, including extensive networks of towers and rooftops. Crown Castle offers significant wireless communications coverage to 68 of the top 100 United States markets and to substantially all of the Australian population. Crown Castle owns, operates and manages over 11,000 and 1,300 wireless communication sites in the U.S. and Australia, respectively. (source: company press release or website)

Why We Like It:
We always get suspicious when we see big moves fueled by big volume without any news or catalyst to explain it. That's what happened in CCI today. The stock broke out from its sideways consolidation and hit new highs on volume more than three times the daily average. Yet there was no news to explain it. A sharp unexplained rise might look like a short squeeze but CCI doesn't have a lot of short interest. The latest data put short interest at 2.7% of the float. Technically this is very bullish the breakout over resistance and the big volume. The move pushed its MACD into a new buy signal and its RSI indicator certainly looks more bullish. We're going to suggest new long positions with the stock over the $25.00 level. If possible the preferred entry point would be closer to the $25.00 level (say in the 25.25-25.00 region) but there is no guarantee that CCI will pull back. Of course odds of a dip rise sharply if the major averages head south tomorrow so it might pay to be patient. Our target is the $29.00 mark.

Picked on November 01 at $25.81
Change since picked: + 0.00
Earnings Date 10/26/05 (confirmed)
Average Daily Volume: 1.2 million
 

New Short Plays

Sysco - SYY - close: 30.60 chg: -1.31 stop: 32.01

Company Description:
SYSCO is the largest foodservice marketing and distribution organization in North America, providing food and related products and services to approximately 390,000 restaurants, healthcare and educational facilities, lodging establishments and other foodservice customers. SYSCO's operations are located throughout the United States and Canada and include broadline companies, specialty produce and custom-cut meat operations, Asian foodservice distributors, hotel supply operations and chain restaurant distribution subsidiaries. (source: company press release or website)

Why We Like It:
SYY reported earnings last night and investors were clearly unhappy with the results. The company blamed higher fuel and pension costs for its poor performance. Reaction in the stock price produced a four-percent decline on very big volume. This produced a breakdown below support at the $31.00 level and more importantly a breakdown below its multi-year trendline of support. Technical indicators look bad too with a new MACD sell signal. The P&F chart points to a $24 target. We are going to suggest shorts with the stock under $31.00 and target a decline into the $28.50-28.00 range. There is a good chance that SYY might retest the $31.00 level as overhead resistance and a failed rally at $31 could be used as a new entry point. We do expect a bounce at the $30.00 mark so plan your traders accordingly. Once SYY confirms this breakdown we'll tighten our stop loss.

Picked on November 01 at $30.60
Change since picked: + 0.00
Earnings Date 10/31/05 (confirmed)
Average Daily Volume: 2.4 million
 

In Play Updates and Reviews

Long Play Updates

Burlington Coat - BCF - close: 38.25 chg: -0.31 stop: 36.45

BCF spent most of the session trading sideways north of the $38 mark. We see no changes from our previous updates. We remain bullish on BCF but more conservative traders may want to wait for a move over $39 before going long. Our target is the $43.50-44.00 range.

Picked on October 24 at $38.90
Change since picked: - 0.65
Earnings Date 10/06/05 (confirmed)
Average Daily Volume: 165 thousand

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HR Block - HRB - close: 24.74 change: -0.12 stop: 23.49

Tuesday proved to be a quiet session for HRB. The stock traded sideways under round-number resistance at the $25.00 mark. Our target is the simple 200-dma near $25.80.

Picked on October 23 at $24.09
Change since picked: + 0.65
Earnings Date 11/17/05 (confirmed)
Average Daily Volume: 2.1 million

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Outback Stkhse - OSI - close: 37.47 chg: -0.19 stop: 35.75

OSI appears to be struggling with resistance in the $38.00 region bolstered by its simple 40-dma. A bounce from the simple 10-dma near $37.00 could be used as a new bullish entry point. Our target is the $39.90-40.00 range.

Picked on October 23 at $37.21
Change since picked: + 0.26
Earnings Date 10/20/05 (confirmed)
Average Daily Volume: 819 thousand

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Patterson Companies - PDCO - close: 41.49 chg: +0.11 stop: 38.99

We do not see any changes from our previous update on PDCO. A bounce from the $40.50 region could be used as a new entry point. The stock is testing resistance at the 100-dma. Our target is the $44-45 range. We will plan to exit before the company announces earnings in late November.

Picked on October 30 at $40.85
Change since picked: + 0.63
Earnings Date 11/24/05 (unconfirmed)
Average Daily Volume: 1.2 million
 

Short Play Updates

Elkcorp - ELK - close: 31.72 chg: +0.09 stop: 32.51

The short-term trading in ELK would suggest the stock is poised to breakout over resistance at the $32.00 mark. Yet until that happens the pattern remains bearish. We are not suggesting new positions at this time. Conservative traders can watch for a breakdown under $30.00 as a new entry point.

Picked on October 27 at $30.49
Change since picked: + 1.23
Earnings Date 10/21/05 (confirmed)
Average Daily Volume: 205 thousand

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Mentor Graphics - MENT - close: 8.32 chg: +0.05 stop: 8.36

We remain on the sidelines. MENT has been stuck in a trading range between $7.85 and $9.00 for months. Our trigger to short the stock is at $7.80. If triggered we'll target a decline to the $6.55 mark.

Picked on October xx at $xx.xx <-- see Trigger
Change since picked: + 0.00
Earnings Date 10/20/05 (confirmed)
Average Daily Volume: 713 thousand

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Sanderson Farms - SAFM - close: 34.23 chg: -0.28 stop: 36.11

The oversold bounce in SAFM appears to have stalled at its simple 10-dma. We are not suggesting new plays at this time. Our target is the $32.00-31.00 range.

Picked on October 23 at $35.17
Change since picked: - 0.94
Earnings Date 12/07/05 (unconfirmed)
Average Daily Volume: 257 thousand
 

Closed Long Plays

None
 

Closed Short Plays

None
 

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