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CREE
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New Long Plays

Cree Inc. - CREE - close: 26.89 change: +0.69 stop: 24.89

Company Description:
Cree is an advanced semiconductor company that leverages its expertise in silicon carbide (SiC) and gallium nitride (GaN) materials technology to produce new and enabling semiconductors. The company's products include blue, green and near ultraviolet (UV) light emitting diodes (LEDs), packaged LEDs, power switching devices, and radio frequency (RF) and microwave devices. The Company is currently developing near UV lasers. Targeted applications for these products include solid-state illumination, power switching, wireless infrastructure and optical storage. Cree understands the important convergence of science, technology and creativity, placing high value on ideas, as well as the energy and ability of its people. (source: company press release or website)

Why We Like It:
The semiconductor sector is on the verge of a significant breakout and doing its part to help is CREE. Shares of CREE broke through resistance near the $26.00 level this past week and has more than filled the gap from its August drop. Short-term technical indicators are bullish but CREE's P&F chart has not yet reversed into a new buy signal. We believe the stock is poised to make a run towards the summer highs near $31.00. We're going to suggest long positions with CREE above $26.00. Traders have a choice to either look for a dip back into the $26.00-26.50 range or look for a move over short-term resistance at $27.00 as their entry point. Our target will be the $30.00-31.00 range. Be sure to keep an eye on the SOX index, which has a tendency to fill gaps. The index gapped higher on Friday and a pull back to fill the gap will probably weigh on shares of CREE.

Picked on November 20 at $26.89
Change since picked: + 0.00
Earnings Date 01/19/06 (unconfirmed)
Average Daily Volume: 1.2 millioni

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D.R.Horton - DHI - close: 34.81 chg: -0.15 stop: 32.45

Company Description:
D.R. Horton, Inc., America's Builder, is the largest homebuilder in the United States, delivering more than 51,000 homes in its fiscal year ended September 30, 2005. Founded in 1978 in Fort Worth, Texas, D.R. Horton has expanded its presence to include 74 markets in 25 states in the Midwest, Mid- Atlantic, Southeast, Southwest and Western regions of the United States. The Company is engaged in the construction and sale of high quality homes with sales prices ranging from $90,000 to over $900,000. D.R. Horton also provides mortgage financing and title services for homebuyers through its mortgage and title subsidiaries. (source: company press release or website)

Why We Like It:
The homebuilders were able to shrug off negative news this past week and the group is pushing higher over its three-month trendline of resistance. DHI helped stage the breakout with a very strong earnings report and raised guidance. Shares of DHI have broken through resistance at its 50-dma, 200-dma and its three-month trendline of resistance. Readers have a choice. They can look for a dip back toward $33.50 and buy a dip there or wait for confirmation of DHI's breakout with a move over its 100-dma. We're going to suggest the latter strategy. We'll use a trigger at $35.85 to open the play. If we are triggered we'll target a rise into the $39.75-40.00 range over the next eight weeks.

Picked on November xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 11/16/05 (confirmed)
Average Daily Volume: 3.2 million

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eBay Inc. - EBAY - close: 44.67 change: +0.87 stop: 42.45

Company Description:
eBay is The World's Online Marketplace, enabling trade on a local, national and international basis. With a diverse and passionate community of individuals and small businesses, eBay offers an online platform where millions of items are traded each day. (source: company press release or website)

Why We Like It:
In the past couple of weeks EBAY has broken out from a two-month trading range. Currently the stock is still trading under resistance at the $45.00 mark but shares do look poised to breakout and hit new highs for the year. The Point & Figure chart, which eliminates a lot of the noise we see on a daily chart, is bullish with a buy signal pointing to a $57 target. We are going to suggest a trigger at $45.10 to open the play. Until EBAY trades at or above our trigger we'll sit on the sidelines. If triggered we'll target a run into the $49.90-50.00 range by year's end.

Picked on November xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 01/18/06 (unconfirmed)
Average Daily Volume: 17.2 million
 

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