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New Plays
Long Plays
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FST None
GRP  
JMDT  
LEV  

New Long Plays

Forest Oil - FST - close: 46.30 change: +1.49 stop: 42.75

Company Description:
Forest Oil Corporation is engaged in the acquisition, exploration, development, and production of natural gas and liquids in North America and selected international locations. Forest's principal reserves and producing properties are located in the United States in the Gulf of Mexico, Texas, New Mexico, Louisiana, Oklahoma, Utah, Wyoming and Alaska, and in Canada. (source: company press release or website)

Why We Like It:
The energy sector looks poised to breakout from its two-month consolidation while the oil service stocks have already done so and are trading near all-time highs. It also helps that natural gas futures have rebounded off their recent lows. FST is a natural gas play and its daily chart shows a bullish or inverted head-and-shoulders pattern. We also like how FST has rebounded from the 200-dma a few days ago and how today's rally pushed the stock above technical resistance at its simple 50-dma. The P&F chart for FST is improving and a move over $47.00 would produce a new buy signal. We are going to use a trigger at $47.01 to open the play. More aggressive traders might want to try and jump in early if FST trades over today's high (46.61). If triggered we'll target the $52.50-53.00 range since the H&S pattern points to a $52-53 target. We do not want to hold over FST's February earnings report.

Picked on December xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/09/06 (unconfirmed)
Average Daily Volume: 1.1 million

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Grant Prideco - GRP - close: 41.20 chg: +2.81 stop: 38.49

Company Description:
Grant Prideco, headquartered in Houston, Texas, is the world leader in drill stem technology development and drill pipe manufacturing, sales and service; a global leader in drill bit technology, manufacturing, sales and service; and a leading provider of high-performance engineered connections and premium tubular products and services. (source: company press release or website)

Why We Like It:
The oil service stocks have returned as one of the strongest sectors in the market. The OSX index closed near its all-time high today. GRP followed suit with a strong, high-volume rally back toward its own highs. Normally we don't like to chase a move this big (+7.3% today) but GRP looks poised to breakout from its two-month consolidation. The stock has resistance at $41.50. We're going to suggest a trigger at $41.65 to open the play. If triggered we'll target a rally into the $46-47 range over the next seven weeks. We do not want to hold over GRP's earnings report in January.

Picked on December xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 01/25/06 (unconfirmed)
Average Daily Volume: 1.5 million

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JAMDAT Mobile - JMDT - close: 23.70 chg: +0.83 stop: 22.49

Company Description:
JAMDAT Mobile Inc. is a global publisher of wireless entertainment applications, including games, ring tones, images and other content. JAMDAT's application portfolio is based on original and licensed intellectual properties and includes JAMDAT Bowling, Tetris, Downtown Texas Hold 'Em, Lemonade Tycoon, Bejeweled, The Lord of the Rings, Tony Hawk's Underground and Scrabble. JAMDAT distributes its applications through wireless carriers around the world. (source: company press release or website)

Why We Like It:
This is an aggressive play in the wireless sector. JMDT exploded higher last month before Thanksgiving after announcing it had renewed a game deal with Activision. The news sparked a short-squeeze and JMDT soared from under $20 and is 50-dma to over $25 and its 200-dma in just two days. Since then the stock has slowly consolidated back down to support near the 200-dma (22.50). Today's bounce produced a bullish engulfing candlestick pattern, which is usually a one-day reversal pattern. However, these patterns need to be confirmed. Therefore we're going to suggest a trigger to go long at $24.01. If triggered we'll target a rally to the top of the August gap in the $26.95-27.00 range. We do not want to hold over the early February earnings report. FYI: the latest data put short interest at 22.8% of the 24.8 million share float.

Picked on December xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/07/06 (unconfirmed)
Average Daily Volume: 368 thousand

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Levitt - LEV - close: 22.27 chg: +0.64 stop: 20.95

Company Description:
Levitt and Sons(TM), America's first builder of planned suburban communities, is best known for creating New York's Levittown, Long Island and has built approximately 200,000 homes over the last 75 years. Acquired in 1999, Levitt and Sons(TM) currently develops single and multi-family home communities for active adults and families in Florida and Georgia, and Tennessee under the Bowden name. Bowden Homes, founded in 1971, has been one of the largest home-builders in Memphis and the surrounding metropolitan area for eight consecutive years. Acquired in April 2004, Bowden Homes focuses on building distinctively featured family housing in the Memphis, Nashville and north Mississippi areas. (source: company press release or website)

Why We Like It:
LEV is a builder that appears to have seen its stock price bottom over the last couple of months. The recent breakout on November 23rd pushed the stock over multiple levels of resistance and technicals on the daily and weekly chart have turned bullish. Shares did pull back from the Thanksgiving week spike and the recent bounce from the $21.00 level looks like a new bullish entry point. We would suggest long positions with LEV above $21.50 and target a run up into the $24.90-25.00 range. We do not want to hold over the February earnings report.

Picked on December 01 at $22.27
Change since picked: + 0.00
Earnings Date 02/02/06 (unconfirmed)
Average Daily Volume: 161 thousand
 

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