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New Plays
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None BIDU
  HNT
  PETM
  TZOO

New Long Plays

None today.
 

New Short Plays

Baidu.com - BIDU - close: 60.86 change: -1.44 stop: 64.05

Company Description:
Baidu.com, Inc. is the leading Chinese language Internet search provider. As a technology-based media company, Baidu aims to provide the best way for people to find information. In addition to serving individual Internet search users, Baidu provides an effective platform for businesses to reach potential customers. Baidu's ADSs, each of which represents one Class A ordinary share, are currently trading on the NASDAQ National Market under the symbol "BIDU." (source: company press release or website)

Why We Like It:
Positive analyst comments have not done much to help shares of BIDU over the last several weeks. Instead the high-flying IPO from last August has been painting a very bearish pattern of lower highs wedging against support at the $60.00 level. The $60 level is pretty strong emotional support and if that breaks there could be a cascade of selling. Investors might be unnerved by recent news that GOOG is putting up some fierce competition against BIDU for the Chinese search engine market. We see this as an aggressive and higher risk play considering the stock's volatility. We'll suggest a trigger at $59.75 to short the stock. If triggered we'll target a decline into the $52.00-50.00 range. Our time frame is about seven weeks, which should allow us to catch the 180-day lock up expiration expected in February.

Picked on January xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 03/16/06 (unconfirmed)
Average Daily Volume: 1.0 million

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Health Net - HNT - close: 49.56 chg: -1.65 stop: 51.05

Company Description:
Health Net Federal Services, a subsidiary of Health Net, Inc., has a long history of providing cost-effective, quality managed health care programs for government agencies including the Department of Defense and Veterans Affairs. As the managed care support contractor for the TRICARE North Region, Health Net provides health care services to over 3 million uniformed services beneficiaries, active and retired, and their families. (source: company press release or website)

Why We Like It:
The IUX insurance index just broke down to a new two-month low under support. The IUX appears to have also produced a double-top pattern. If the group is heading lower then shares of HNT could be ready to see some long overdue profit taking. HNT has been climbing for over a year. Now it looks like the upward momentum has vanished and shares are beginning to falter. Friday's 3.2% decline was on above average volume and pushed the stock under round-number support at the $50.00 mark. HNT had already broken technical support at the 50-dma a few days earlier. We want to see some confirmation before shorting HNT. We're suggesting a trigger at $48.95, which is under technical support at the 100-dma. If triggered we'll target the 200-dma currently at 43.00 and rising. Since the 200-dma is rising we'll have to use a flexible target. We'll start with a target zone of $45.00-44.00. More aggressive traders may want to consider shorting the stock now with the breakdown under $50.00. Please note that we do not want to hold any positions over HNT's February 1st earnings report.

Picked on January xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/01/06 (confirmed)
Average Daily Volume: 958 thousand

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PETsMART - PETM - close: 24.08 change: -0.68 stop: 25.51

Company Description:
PetSmart, Inc. is the largest specialty retailer of services and solutions for the lifetime needs of pets. The company operates more than 800 pet stores in the United States and Canada, a growing number of PetsHotels, as well as a large pet supply catalog business and the Internet's leading online provider of pet products and information (www.petsmart.com). PetSmart provides a broad range of competitively priced pet food and supplies, and offers complete pet training, grooming and adoption services. Since 1994, PetSmart Charities, an independent 501(c)(3) organization, has donated more than $39 million to animal welfare programs and, through its in-store adoption programs, has saved the lives of more than 2 million pets. (source: company press release or website)

Why We Like It:
It is bad news when positive analyst comments can't seem to spark much of a rally any more. The December 22nd comments from Goldman Sachs produced a pop higher but it failed to breakout over PETM's exponential 200-dma. Additional positive comments from another broker in January hardly registered on the stock at all. Now shares are breaking down under its three-month trendline of support. The P&F chart is very bearish with a sell signal pointing to a $15.00 target. We are going to suggest shorts here at 24.08 but more conservative traders may want to wait for a decline under $24.00 before initiating positions. Our target is the $21.50-21.00 range. Once PETM closes under $24.00 we'll lower the stop loss.

Picked on January 22 at $24.08
Change since picked: + 0.00
Earnings Date 03/01/06 (unconfirmed)
Average Daily Volume: 1.2 million

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Travelzoo - TZOO - close: 21.02 change: -1.08 stop: 23.05

Company Description:
Travelzoo Inc. is a leading Internet media company. Travelzoo's media properties, which reach more than nine million subscribers in the U.S. and the U.K., include the Travelzoo Web site (http://www.travelzoo.com), the Top 20 e-mail newsletter, the Newsflash(TM) e-mail alert service and SuperSearch(TM), a travel search engine. Travelzoo publishes offers from more than 500 advertisers. Travelzoo's deal experts review each offer to find the best travel deals and confirm their true value. (source: company press release or website)

Why We Like It:
This play is for aggressive, high-risk traders only! TZOO is a heavily shorted stock. The latest data puts short interest at 41% of its 16.2 million shares outstanding. The risk of a short squeeze is a big one here. Yet so far the bears have been winning. TZOO has been consistently failing with one new lower high after another. Friday's 4.8% decline is a breakdown under the simple 100-dma. Friday's decline also reversed the P&F chart from a buy signal into a new sell signal with a $16.00 target. We are going to try and limit our risk with a stop loss at $23.05 but that's no guarantee we'd be stopped out there in a fast market. There is a good chance that TZOO might produce a bounce from potential support at the $20.00 level. More patient traders could wait for the bounce from $20 to fail before considering new short positions. We are going to suggest shorts here with a target in the $17.25-16.50 range. We do not want to hold over the early February earnings report.

Picked on January 22 at $21.02
Change since picked: + 0.00
Earnings Date 02/02/06 (confirmed)
Average Daily Volume: 309 thousand
 

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