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JDSU None
NVLS  
TER  

New Long Plays

JDS Uniphase - JDSU - close: 2.50 change: +0.21 stop: 2.24

Company Description:
JDSU is committed to enabling broadband & optical innovation in the communications, commercial and consumer markets. JDSU is the leading provider of communications test and measurement solutions and optical products for telecommunications service providers, cable operators, and network equipment manufacturers. (source: company press release or website)

Why We Like It:
Believe it or not we had JDSU on our internal watch list yesterday. We choose not to add any stocks last night due to the CPI report out this morning. It looks like we should have listed the stock with a trigger to go long over the 50-dma. Even though JDSU added 9% today we think there are more gains to be made. However, traders have a choice. Do you go long here, effectively chasing it, or do you wait for a potential pull back probably towards the $2.40-2.35 region. Obviously we'd prefer to buy a pull back and broken resistance in the $2.30-2.35 range should now act as new support (as should the 50-dma). Our target is the simple 200-dma near $2.88 (range 2.85-2.90). Consider the stock's volatility we need to label a more aggressive, higher-risk play. Please note that we do not want to hold over the August 30th earnings report.

Picked on August 16 at $ 2.50
Change since picked: + 0.00
Earnings Date 08/30/06 (confirmed)
Average Daily Volume: 42.3 million

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Novellus - NVLS - close: 26.65 change: +0.92 stop: 24.99

Company Description:
Novellus Systems, Inc. is a leading provider of advanced process equipment for the global semiconductor industry. (source: company press release or website)

Why We Like It:
Semiconductor stocks have been one of the best performing groups in the market during the two-day market rally. We like NVLS because the stock doesn't look too over extended. Technicals have turned bullish again and its P&F chart points to a $49 target. Today's gain (+3.5%) was fueled by strong volume and produced a bullish breakout over resistance at $26.00 and its April high (26.57). We would consider longs right here but our preferred entry point would be on a dip back towards the $26.00 region. We feel that odds or a dip are pretty good since the SOX is already up over 9% this week alone. Our target is the $29.50-30.00 range. Our time frame is four to six weeks. Please note that NVLS has announced its mid-quarter update for August 30th, 2006.

Picked on August 16 at $26.65
Change since picked: + 0.00
Earnings Date 10/18/06 (unconfirmed)
Average Daily Volume: 2.8 million

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Teradyne - TER - close: 13.53 change: +0.33 stop: 12.49

Company Description:
Teradyne is a leading supplier of Automatic Test Equipment used to test complex electronics used in the consumer electronics, automotive, computing, telecommunications, and aerospace and defense industries. In 2005, Teradyne had sales of $1.08 billion, and currently employs about 4,000 people worldwide. (source: company press release or website)

Why We Like It:
TER is another semiconductor stock that is breaking out from its bearish trend and over technical resistance at its simple 50-dma. Volume on today's breakout was strong, which is a bullish sign. Short-term technicals have also turned positive but we do note that the Point & Figure chart is still bearish. We see the bounce from $13.00 and the move over the 50-dma today as a new entry point to buy the stock. However, more patient traders might want to wait for another drip back towards $13.25-13.00 since the SOX looks short-term overbought the sector could see a little profit taking. Our target is the $14.75-15.00 range, which is under the simple 200-dma.

Picked on August 16 at $13.53
Change since picked: + 0.00
Earnings Date 10/18/06 (unconfirmed)
Average Daily Volume: 2.4 million
 

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