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New Long Plays

None today.
 

New Short Plays

Broadcom - BRCM - close: 39.10 chg: -1.31 stop: 40.61

Company Description:
Broadcom Corporation is a global leader in semiconductors for wired and wireless communications. Our products enable the delivery of voice, video, data and multimedia to and throughout the home, the office and the mobile environment. Broadcom provides the industry's broadest portfolio of state-of-the-art system-on-a-chip and software solutions to manufacturers of computing and networking equipment, digital entertainment and broadband access products, and mobile devices. (source: company press release or website)

Why We Like It:
Weakness in the semiconductor sector (SOX -2.49%) lead the tech sector lower. The daily chart for the SOX shows a new sell signal in its MACD indicator. Contributing to the group's decline was a 3.2% breakdown in BRCM. The weakness in BRCM is even more surprising considering the stock received an upgrade this morning. It is interesting to note that when BRCM filled the gap in late April shares bounced but the oversold bounce failed at the $42.00 level and the stock built a new level of resistance there. The P&F chart is bearish and points to a $34.00 target. We see today's decline as a short-term entry point to ride the stock toward technical support at its simple 200-dma. We're suggesting shorts under $40.00 and our target will be the 200-dma in the 36.00-35.50 range. The 200-dma is currently at 35.79. Chart readers will note that this entry point is not without risk. The selling today stopped right at its two-month trendline of lower lows. This would suggest that BRCM could bounce tomorrow (see chart).

Picked on May 10 at $39.10
Change since picked: + 0.00
Earnings Date 07/20/06 (unconfirmed)
Average Daily Volume: 13.7 million

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Hi-Tech Pharma - HITK - close: 22.91 chg: -0.31 stop: 25.01

Company Description:
Hi-Tech Pharmacal is a specialty pharmaceutical company developing, manufacturing and marketing branded and generic products. The Company specializes in difficult to manufacture liquid and semi-solid dosage forms and produces a range of sterile ophthalmic, otic and inhalation products. The Company's Health Care Products Division is a leading developer and marketer of branded prescription and OTC products for the diabetes marketplace. (source: company press release or website)

Why We Like It:
Some of the drug stocks are suffering and HITK is one of them. The company recently reported earnings and bested estimates but shares sold off anyway. The action in HITK looks like a failed rally near the top of its descending channel. Meanwhile the P&F chart is bearish with a $13.00 target. Today's action looks like a failed rally under $24.00 and its 200-dma. We see it as a new entry point to short the stock. More conservative traders might want to wait for a new low under $22.00. Our target will be the $20.25-20.00 range. FYI: traders should note that the latest data puts short interest at 4.9% of HITK's 9.7 million-share float. That's a small float and 4.9% could be enough to really raise the risk of a short squeeze.

Picked on May 10 at $22.91
Change since picked: + 0.00
Earnings Date 03/09/06 (confirmed)
Average Daily Volume: 154 thousand
 

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