Option Investor
New Plays
Printer friendly version
New Plays
Long Plays
Short Plays

New Long Plays

VCA Antech - WOOF - close: 26.74 chg: -0.75 stop: 25.90

Company Description:
We own, operate and manage the largest networks of freestanding veterinary hospitals and veterinary-exclusive clinical laboratories in the country, and we supply ultrasound and digital radiography equipment to the veterinary industry. (source: company press release or website)

Why We Like It:
The recent earnings report in October helped fuel a rally that pushed shares of WOOF through significant resistance at the $26.00 level. Today's pull back was sparked by an analyst downgrade to a "hold" on valuation. We see the intraday bounce from broken resistance now new support at the $26.00 level as a new bullish entry point. While we are willing to go long here more conservative traders may want to wait for some confirmation of today's afternoon bounce by looking for a move over the $27.00 level. Currently the Point & Figure chart points to a $44 target. We are going to target a rise into the $29.90-30.00 range. Our time frame is eight weeks.

Picked on November 09 at $26.74
Change since picked: + 0.00
Earnings Date 10/26/05 (confirmed)
Average Daily Volume: 436 thousand

New Short Plays

Tecumseh Prod. - TECUA - close 18.96 chg: -0.71 stop: 20.55

Company Description:
Tecumseh Products Company is a full line, independent global manufacturer of hermetic compressors for air conditioning and refrigeration products, gasoline engines and power train components for lawn and garden applications, submersible pumps, and small electric motors. In addition, Tecumseh Products Company has many other subsidiaries that not only sell products inside the world of Tecumseh, but to the outside world as well. Our products are sold in over 120 countries around the world. (source: company press release or website)

Why We Like It:
It looks like shares of TECUA are imploding. Shares are very oversold on a long-term basis and today's decline marks a new all-time low for the stock. TECUA had been churning sideways near the $20.00 level for the last few weeks as investors waited for its Q3 earnings report. The company reported a couple of days ago and issued a bearish forecast blaming rising commodity costs and unfavorable currency exchange rates. Today's decline was fueled by volume about 150% above its daily average. The biggest risk here is probably a short squeeze. The latest data puts short interest at 7% of the 18.4 million shares outstanding. That's not an excessive amount of short interest but with such a small float it could be enough to provoke a short squeeze. If you choose to short the stock maintain a constant vigilance with your stop losses. We are going to suggest shorts with the stock under $19.00 but a failed rally under $20.00 could work too. We'll set the stop loss at $20.55. Our target is the $16.00 mark.

Picked on November 09 at $18.96
Change since picked: + 0.00
Earnings Date 11/07/05 (confirmed)
Average Daily Volume: 96 thousand

Premier Investor New Play Archives