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New Long Plays

Dominos Pizza - DPZ - close: 25.82 change: +0.12 stop: 24.45

Company Description:
Founded in 1960, Domino's Pizza is the recognized world leader in pizza delivery. Domino's is listed on the NYSE under the symbol "DPZ." Through its primarily franchised system, Domino's operates a network of approximately 8,000 franchised and Company-owned stores in the United States and more than 50 countries. The Domino's Pizza brand, named a Megabrand by Advertising Age magazine, had global retail sales of more than $4.6 billion in 2004, comprised of nearly $3.2 billion domestically and more than $1.4 billion internationally. Domino's Pizza was named "Chain of the Year" by Pizza Today magazine, the leading publication of the pizza industry and is the "Official Pizza of NASCAR." (source: company press release or website)

Why We Like It:
DPZ looks like an attractive long candidate. The stock has been showing plenty of relative strength over the last couple of weeks. Currently shares are stuck in a trading range between $23.70 and long-term resistance at $26.00. We are going to suggest a trigger at $26.16 to capture any breakout above resistance. If triggered we'll target a rally into the $27.85-28.00 range. We do not want to hold over the February 21st earnings report.

Picked on February xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/21/06 (confirmed)
Average Daily Volume: 401 thousand

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Knightsbridge Tankers - VLCCF - cls: 27.64 chg: +1.44 stop: 25.24

Company Description:
Knightsbridge Tankers Limited is an international tanker company and the primary business activity is international sea borne transportation of crude oil. The fleet consists of five double-hull very large crude oil carriers, one of which was built in 1996 and four of which were built in 1995. (source: company press release or website)

Why We Like It:
We had relative success with NAT as a long play. NAT, an oil tanker company, reported earnings today that came in above analysts' estimates. This seems to have empowered shares of VLCCF to breakout over resistance at $26.50 and its simple 50-dma. Volume came in more than double the daily average, which is definitely bullish for the stock. Some of the short-term and most of the weekly technical indicators have all turned positive. We are suggesting longs with VLCCF above $27.00. If you're the patient type consider waiting for a pull back toward the $27 level again and then initiate long positions. Our target is the $29.95-30.00 range. Watch out for potential resistance at the 100-dma.

Picked on February 07 at $27.64
Change since picked: + 0.00
Earnings Date 02/28/06 (unconfirmed)
Average Daily Volume: 206 thousand
 

New Short Plays

Amer. Home Mtg - AHM - close: 28.19 change: -0.66 stop: 29.05

Company Description:
American Home Mortgage Investment Corp. is a mortgage real estate investment trust ("REIT") focused on earning net interest income from self- originated mortgage-backed securities and mortgage loans, and through its taxable subsidiaries, from originating and servicing mortgage loans for institutional investors. Mortgages are originated through a network of loan production offices as well as through mortgage brokers and correspondents and are serviced at the Company's Irving, Texas servicing center. (source: company press release or website)

Why We Like It:
AHM issued an earnings warning back in mid January that sent the stock reeling in addition to breaking its two-month bullish trend. Since then there has been a failed rally near $30.50 and now shares look ready to fall out of its seven-day trading range in the $28-29 range. If you look at the weekly chart is looks like a big bearish head-and-shoulders pattern has formed and AHM is on the last leg of the right shoulder heading towards the neckline. We're going to target that neckline in the $25.25-25.00 range. It is tempting to consider shorts right here following today's failed rally at the $29.00 mark. However, we are going to suggest a trigger to short AHM at 27.89, which is under Friday's low. FYI: the latest data puts short interest at 8.9% of the 43.5 million share float.

Picked on February xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/27/06 (unconfirmed)
Average Daily Volume: 639 thousand

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Liz Claiborne - LIZ - close: 33.76 change: -0.51 stop: 34.75

Company Description:
Liz Claiborne Inc. designs and markets an extensive range of women's and men's fashion apparel and accessories appropriate to wearing occasions ranging from casual to dressy. The Company also markets fragrances for women and men. (source: company press release or website)

Why We Like It:
LIZ has been sliding lower for months following its July 2005 peak. More recently the stock has been consolidating sideways in a trading range between $33.50 and 36.50. It would appear that LIZ is about to breakdown from that trading range and continue sliding lower again. Today's failed rally looks like a tempting entry point to short the stock. However, we are going to wait for a breakdown below the bottom edge of its trading range. Our trigger to short LIZ will be $33.45. If triggered we'll target a decline into the 30.50-30.00 range. We do not want to hold over the early March earnings report. A drop under the $33.00 mark should produce a new P&F sell signal.

Picked on February xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 03/01/06 (unconfirmed)
Average Daily Volume: 661 thousand
 

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