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New Short Plays

Adobe Sys. - ADBE - close: 37.80 change: -0.78 stop: 39.01

Company Description:
Adobe revolutionizes how the world engages with ideas and information -- anytime, anywhere and through any medium.(source: company press release or website)

Why We Like It:
The GSO software sector index appears to be on the verge of a correction. It doesn't help the bulls that the NASDAQ is failed to breakout over resistance this past week. Contributing to the weakness in software could be ADBE. The stock looks tired after a hefty five-month run up from its August lows. The stock has broken its bullish trend and technical support at the 40 and 50-dma's. We are going to suggest shorts here under $38.00 with a target in the $35.25-35.00 range, currently near the simple 100-dma. More conservative traders may want to wait for a move under $37.00 before initiating positions. We do not want to hold over the mid March earnings report.

Picked on February 19 at $37.80
Change since picked: + 0.00
Earnings Date 03/16/06 (unconfirmed)
Average Daily Volume: 6.5 million

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Bed Bath & Beyond - BBBY - cls: 35.55 chg: -0.45 stop: 37.01

Company Description:
Bed Bath & Beyond Inc. is a nationwide chain of retail stores. The Company's Bed Bath & Beyond stores sell better quality domestics merchandise and home furnishings. The Company's Christmas Tree Shops and Harmon Stores sell giftware and household items and health and beauty care items, respectively. (source: company press release or website)

Why We Like It:
BBBY got hammered back in December after its earnings report. Since then the oversold bounce has struggled to make it past the $38 level. The recent trading action suggests that BBBY is poised to begin another leg lower. A glance at the weekly chart and you can see that the stock may have built a long-term top over the last couple of years and potentially a huge (bearish) head-and-shoulders pattern over the last year or so. The $35.00 level is support. We are going to suggest a trigger to short the stock at $34.80, under the January low. If triggered we'll target a decline into the $30.50-30.00 range. More aggressive traders may want to consider new shorts right here under $36.00.

Picked on February xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 03/29/06 (unconfirmed)
Average Daily Volume: 3.5 million

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Hilton Hotels - HLT - close: 24.30 change: -0.35 stop: 25.01

Company Description:
Hilton Hotels Corporation is recognized internationally as a preeminent hospitality company. The company develops, owns, manages or franchises approximately 2,300 hotels, resorts and vacation ownership properties. Its portfolio includes many of the world's best known and most highly regarded hotel brands, including Hilton, Conrad, Doubletree, Embassy Suites Hotels, Hampton Inn, Hampton Inn & Suites, Hilton Garden Inn, Hilton Grand Vacations Club, Homewood Suites by Hilton and The Waldorf=Astoria Collection(TM). (source: company press release or website)

Why We Like It:
HLT has broken its three-month bullish trend. Short-term technicals and technicals on its weekly chart are turning bearish. The P&F chart is still bullish for now. Aggressive traders might want to consider shorts here at $24.30 or wait for a drop under the 50-dma (24.21). We are suggesting a trigger to short the stock at $23.98 since the $24.00 level was support back in early January. Our target is a decline into the $22.25-22.00 range.

Picked on February xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 05/02/06 (unconfirmed)
Average Daily Volume: 2.9 million

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Juniper Networks - JNPR - close: 17.97 chg: -0.65 stop: 19.25

Company Description:
Juniper Networks is the leader in enabling secure and assured communications over a single IP network. The company's purpose-built, high performance IP platforms enable customers to support many different services and applications at scale. Service providers, enterprises, governments and research and education institutions worldwide rely on Juniper Networks to deliver products for building networks that are tailored to the specific needs of their users, services and applications. Juniper Networks' portfolio of proven networking and security solutions supports the complex scale, security and performance requirements of the world's most demanding networks. (source: company press release or website)

Why We Like It:
Look out below! The trading in JNPR is growing bearish again and the stock is significantly under performing its peer group. The stock was crushed back in January after reporting earnings and then warning for the first quarter. There were a couple of initial downgrades on the news but in the last month JNPR has seen a couple of braver analyst firms upgrade the stock and call the weakness a buying opportunity. It does not look like the positive comments are working. The oversold bounce has failed multiple times in the $19.25 region. The last failed rally occurred on Thursday's and Friday's 3.5% decline confirmed the reversal. Technical traders will also note that volume on Friday's sell-off was pretty strong. There is arguably some support near $17.90 and again near $17.50. More conservative traders may want to wait for a drop under $17.90 before considering shorts. We are going to suggest shorts right here with JNPR under $18.50. The P&F chart points to a $9.00 target. We are going to target a decline into the $15.25-15.00 range. Please note that the latest data put short interest at 3.7% of the float. Unfortunately, this data does not reflect the big gap down and short interest has probably risen significantly. We don't know what the risk is for a short squeeze.

Picked on February 19 at $17.97
Change since picked: + 0.00
Earnings Date 01/25/06 (confirmed)
Average Daily Volume: 11.8 million
 

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