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New Plays
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RYL  

New Long Plays

Play Editor's note: We are not adding a lot of new plays to the newsletter this weekend. If you read this weekend's market wrap then you already know that our market bias is mostly flat as we head towards the next interest rate decision on Thursday's FOMC meeting. With that in mind we would not be in a rush to open new positions ahead of the Fed's decision.

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Ryder Systems - R - close: 56.35 chg: +0.86 stop: 53.49

Company Description:
Ryder is a Fortune 500 company providing leading-edge transportation, logistics and supply chain management solutions worldwide. Ryder's stock is a component of the Dow Jones Transportation Average and the Standard & Poor's 500 Index. (source: company press release or website)

Why We Like It:
This is a relative strength and technical breakout play. Shares of R held up pretty well during the market's sell-off. Now the stock is breaking out higher from its six-week consolidation pattern under resistance at $56.00. The MACD indicator on the daily chart has produced a new buy signal. The P&F chart is already bullish with a $69 target and a move over $57.00 would produce a new triple-top breakout buy signal. We are going to suggest longs with R above $56.00. Our short-term target is the $59.85-60.00 range. We do not want to hold over the late July earnings report. Please note that R is due to present at a transportation conference on Tuesday, June 27. This event is an unknown variable that could produce stock-moving headlines.

Picked on June 25 at $56.35
Change since picked: + 0.00
Earnings Date 07/27/06 (unconfirmed)
Average Daily Volume: 644 thousand

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Ryland Group - RYL - close: 44.78 chg: +0.55 stop: 43.99

Company Description:
With headquarters in Southern California, Ryland is one of the nation's largest homebuilders and a leading mortgage-finance company. The company currently operates in 28 markets across the country and has built more than 250,000 homes and financed more than 215,000 mortgages since its founding in 1967. (source: company press release or website)

Why We Like It:
Is it possible that all of the bad news in the homebuilding industry has already been priced into the sector? We've had some new earnings warnings from builders recently. RYL warned back on May 25th. The stocks in this industry have been sold for weeks and we're just now starting to see signs of a potential bottom. We would consider this an aggressive play given the stock and sector's relative weakness. However, we're going to try and keep our risk to a minimum with a relatively tight stop loss. Our trigger to go long RYL will be at $45.31, which is above last week's high. More conservative traders may want to use a trigger at $45.51 instead. Our stop will be $43.99. Our target is the $49.50-50.00 range. We do not want to hold over the company's earnings report on July 19th.

Picked on June xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/19/06 (confirmed)
Average Daily Volume: 1.5 million
 

New Short Plays

None today.
 

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