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New Plays
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CCJ HOV
UST  

New Long Plays

Cameco - CCJ - close: 38.01 change: +0.67 stop: 35.29

Company Description:
Cameco, with its head office in Saskatoon, Saskatchewan, is the world's largest uranium producer. The company's uranium products are used to generate electricity in nuclear energy plants around the world, providing one of the cleanest sources of energy available today. Cameco's shares trade on the Toronto and New York stock exchanges. (source: company press release or website)

Why We Like It:
We are very bullish long-term on the stock. On a big-picture basis oil is only going higher and as countries around the world look for alternatives they'll be compelled to use nuclear energy. CCJ is a major supplier of uranium so business should be good for the foreseeable future. The stock has spent the last month consolidating its post-earnings trauma and traders bought the dip at its rising 50-dma. Now after two weeks of consolidating (mostly) between $36.00 and $38.00 the stock looks ready to breakout higher again. We are going to suggest a trigger to go long the stock at $38.51. More aggressive traders may want to jump the gun and consider bullish positions over $38.00. If triggered then we will target a rally into the $42.00-42.50 range. We do expect some resistance at the $40.00 level. Our time frame is about six weeks.

Picked on March xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/01/06 (confirmed)
Average Daily Volume = 2.7 million

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UST Inc. - UST - close: 40.55 change: +0.90 stop: 39.74

Company Description:
UST Inc. is a holding company for its principal subsidiaries: U.S. Smokeless Tobacco Company and International Wine & Spirits Ltd. U.S. Smokeless Tobacco Company is a leading producer and marketer of moist smokeless tobacco products including Copenhagen, Skoal, Red Seal and Husky. International Wine & Spirits Ltd. produces and markets premium wines sold nationally through the Chateau Ste. Michelle, Columbia Crest, Conn Creek and Villa Mt. Eden wineries, as well as sparkling wine produced under the Domaine Ste. Michelle label. (source: company press release or website)

Why We Like It:
Smokeless tobacco producer UST is breaking out. The stock has been stuck in a trading range between $37.50 and $43.00 for months but the entire month of February saw shares churn sideways between $38 and $40. Volume has been rising on the stock's recent show of strength and on Friday UST broke out over resistance at $40.00 and its 50-dma. We believe that shares will make a run for the simple 200-dma overhead near $42.00. We're going to use an exit zone of $41.75-42.00.

Picked on March 05 at $40.55
Change since picked: + 0.00
Earnings Date 04/27/06 (unconfirmed)
Average Daily Volume: 1.5 million
 

New Short Plays

Hovnanian - HOV - close: 44.85 change: -1.59 stop: 48.01

Company Description:
Hovnanian Enterprises, Inc., founded in 1959 by Kevork S. Hovnanian, Chairman, is headquartered in Red Bank, New Jersey. The Company is one of the nation's largest homebuilders with operations in Arizona, California, Delaware, Florida, Illinois, Maryland, Michigan, Minnesota, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia and West Virginia. The Company's homes are marketed and sold under the trade names K. Hovnanian Homes, Matzel & Mumford, Forecast Homes, Parkside Homes, Brighton Homes, Parkwood Builders, Windward Homes, Cambridge Homes, Town & Country Homes, Oster Homes and First Home Builders of Florida. As the developer of K. Hovnanian's Four Seasons communities, the Company is also one of the nation's largest builders of active adult homes. (source: company press release or website)

Why We Like It:
Homebuilders are on the run because the bears seem to be stalking them. The markets are worried about the pace of new home sales and rising interest rates and thus mortgages don't help home sales. The oversold bounce in the sector, and shares of HOV, failed several days ago and the group looks poised to set new relative lows. HOV recently reported earnings and while the company beat estimates the news failed to inspire any bullish action in the stock. HOV lost 3.4% on Friday with volume coming in more than double the daily average. The big volume sell-off is definitely bearish. The P&F chart is bearish and points to a $33.00 target. We are going to aim for a decline into the $40.50-40.00 range.

Picked on March 05 at $44.85
Change since picked: + 0.00
Earnings Date 03/01/06 (confirmed)
Average Daily Volume: 972 thousand
 

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