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NSC  
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New Long Plays

JDS Uniphase - JDSU - close: 2.53 change: +0.02 stop 2.39

Company Description:
JDSU is committed to enabling broadband & optical innovation in the communications, commercial and consumer markets. JDSU is a leading provider of communications test and measurement solutions and optical products for telecommunications service providers, cable operators, and network equipment manufacturers. Furthermore, JDSU is a leading provider of innovative optical solutions for medical/environmental instrumentation, semiconductor processing, display, brand authentication, aerospace and defense applications, and decorative. (source: company press release or website)

Why We Like It:
It feels like a long time ago when the stock symbol JDSU used to stand for "Just Don't Sell Us". Shares of JDSU may never again achieve the heights it scaled back in 1999 and 2000 but that doesn't mean nimble traders can make a buck or two on it now. Over the spring and summer JDSU produced a solid base (or bottom) in the $1.40-1.80 range. This past September the stock broke out and has been climbing in a wide, rising channel ever since. Tuesday's low and Wednesday's bounce looks like a rebound from the bottom of JDSU's rising channel. We see this as a technical entry point to buy a rebound from support. Unfortunately, volume has been pretty low lately and today's early strength faded. We are going to suggest a trigger at $2.65 to go long. If triggered we'll exit at $2.98. There is resistance at $2.80 but we expect JDSU to push past it. Currently the Point & Figure chart for JDSU points to a $5.00 target. We would qualify this as an aggressive play.

Picked on December xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 01/25/06 (unconfirmed)
Average Daily Volume: 50.0 million

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Norfolk So. Corp. - NSC - close: 44.35 chg: +0.25 stop: 42.34

Company Description:
Norfolk Southern Corporation is one of the nation's premier transportation companies. Its Norfolk Southern Railway subsidiary operates 21,500 route miles in 22 states, the District of Columbia and Ontario, Canada, serving every major container port in the eastern United States and providing superior connections to western rail carriers. NS operates the most extensive intermodal network in the East and is North America's largest rail carrier of automotive parts and finished vehicles. (source: company press release or website)

Why We Like It:
The transportation sector is breaking out to new all-time highs as both airlines and railroad stocks soar and chug higher and higher. NSC has been climbing in a stair-step pattern inside its rising channel. Shares just tested support near the bottom of its channel and look poised to begin the next step higher. Technicals are turning positive again on the daily chart and Wednesday's gain put NSC above its three-week trendline of lower highs. NSC and the railroad industry looks like a good candidate to benefit from any end-of-year/end-of-quarter window dressing. We are willing to suggest longs right here. More conservative traders may want to wait for NSC to trade over the $45.00 level before initiating plays. Our end of January target is the $48.50-49.00 range. The Point & Figure chart for NSC currently points to a $64 target. We do not want to hold over the late January earnings report.

Picked on December 22 at $44.35
Change since picked: + 0.00
Earnings Date 01/25/06 (unconfirmed)
Average Daily Volume: 2.2 million

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Outback Steakhouse - OSI - close: 41.14 chg: +0.28 stop: 40.49

Company Description:
Outback Steakhouse, Inc. headquartered in Tampa, Florida was founded in 1988 by those who believe in hospitality, sharing, quality, being courageous and having fun! OSI is a company of restaurants that owns and operates Outback Steakhouse units throughout the U.S. as well as Carrabba's Italian Grill, Lee Roy Selmon's, Cheeseburger in Paradise, Bonefish Grill and Paul Lees Chinese Kitchen. The Company also operates through joint venture agreements and existing franchise agreements additional Outback restaurants (including International locations), Carrabba's Italian Grill, Fleming's Prime Steakhouse & Wine Bar. OSI also has a joint venture development relationship with Roy Yamaguchi, the chef and creator of Roy's Restaurants located in Hawaii, the U.S., and Japan. (source: company press release or website)

Why We Like It:
The long-term trend and the P&F chart for OSI are both bearish but short-term the stock looks ready to pop higher. Shares have been consolidating in a wedge-like pattern with resistance near the exponential 200-dma and a relatively steady trend of higher lows. Short-term technicals like the RSI, stochastics and even the MACD are also suggesting a bullish move could be around the corner. We are going to suggest a trigger to go long the stock at $41.55. If triggered we'll target a rally into the $44.00-44.50 range. OSI appears to have long-term resistance near $45.00.

Picked on December xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/09/06 (unconfirmed)
Average Daily Volume: 789 thousand
 

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