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New Plays
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BAM None
ELK  
NITE  
XTO  

New Long Plays

Brookfield Asset Mgt. - BAM - cls: 44.82 chg: +1.40 stop: 41.95

Company Description:
Brookfield Asset Management Inc., focused on property, power and infrastructure assets, has over $50 billion of assets under management. (source: company press release or website)

Why We Like It:
After almost four months of consolidating sideways it looks like BAM's upward trend is ready to continue. Shares broke out higher above significant resistance at the $44.00 level today. Volume on the move was well above the daily average, which is another bullish sign. Plus, short-term and weekly technical indicators are positive. Today's move also produced a new triple-top breakout buy signal on the P&F chart. We are suggesting long positions with BAM above $44.00. Traders can choose to go long here or hope for a potential pull back toward the $44.00 region. Our target is the $49.00-50.00 range. Our time frame is four to six weeks.

Picked on August 22 at $44.82
Change since picked: + 0.00
Earnings Date 08/03/06 (confirmed)
Average Daily Volume: 393 thousand

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Elk Corp. - ELK - close: 27.10 change: +0.70 stop: 25.95

Company Description:
ElkCorp, through its subsidiaries, manufactures Elk(TM) brand roofing and building products (over 90% of consolidated revenue) and provides technologically advanced products and services to other industries. (source: company press release or website)

Why We Like It:
Shares of ELK have broken out from their five-month bearish channel and through technical resistance at its 50-dma. The big breakout occurred late last week but today's bounce from the $26 region, near its 50-dma, looks like a new entry point to go long the stock. The P&F chart is still bearish but that wouldn't stop the stock from retracing back toward the $30 region. Our target is the $29.75-30.00 range but we are somewhat concerned about potential resistance at its descending 100-dma, currently nearing the $28 level.

Picked on August 22 at $27.10
Change since picked: + 0.00
Earnings Date 08/17/06 (confirmed)
Average Daily Volume: 245 thousand

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Knight Cap. Grp - NITE - cls: 17.36 chg: +0.35 stop: 15.45

Company Description:
Knight Capital Group, Inc. is a leading financial services firm that provides comprehensive trade execution solutions and asset management services. Our Asset Management business, Deephaven Capital Management, is a global multi-strategy alternative investment manager focused on delivering attractive risk-adjusted returns with low correlation to the broader markets for institutions and private clients. Our Global Markets business provides a broad range of customized trade execution products and services across multiple asset classes for broker-dealers, institutions and issuer companies. (source: company press release or website)

Why We Like It:
The trend in NITE changed after the company reported its most recent earnings report in mid July. The stock really began to show strength after it reported stronger volume numbers around August 14th. Now NITE is breaking out to new multi-year highs. Tuesday was the best close for NITE since early 2001. The move today was also a bullish breakout from a massive cup-and-handle pattern (seen more easily on the weekly chart). While it feels like NITE might be a bit short-term overbought here we're going to suggest long positions with NITE above $16.50. If shares provide a dip then we'd use it as a preferred entry point but currently the stock looks poised to charge higher. The P&F chart points to a $25 target. We're aiming for a move into the $19.85-20.00 range. Our time frame is about six weeks. FYI: More conservative traders might want to see a little more confirmation of the breakout and use a trigger at $17.50 or better to open positions.

Picked on August 22 at $17.36
Change since picked: + 0.00
Earnings Date 07/18/06 (confirmed)
Average Daily Volume: 1.5 million

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XTO Energy - XTO - close: 46.70 chg: +1.02 stop: 44.79

Company Description:
XTO Energy Inc. is a domestic energy producer engaged in the acquisition, development and discovery of quality, long-lived oil and natural gas properties in the United States. Its properties are concentrated in Texas, New Mexico, Arkansas, Oklahoma, Kansas, Wyoming, Colorado, Alaska, Utah, Louisiana and Mississippi. (source: company press release or website)

Why We Like It:
We're adding XTO as another bullish candidate but the strategy here is essentially the same as our play on SM, which is already a play in the newsletter. Crude oil sold off sharply the last couple of weeks as inventories reach high levels, there were not any serious gulf storms on the horizon and the summer driving season ends. Yet crude managed a bounce from round-number support near $70.00 and now crude may continue to see buyers speculating on a showdown between Iran and the U.N. over the country's nuclear ambitions. This has the oil stocks bouncing and several of them are bouncing from support at the bottom of their rising bullish channel. XTO is one such stock with a rebound from the bottom of its channel (see chart). Our target is the $49.75-50.00 range although more conservative types might want to exit near $49.20 (currently the August high).

Picked on August 22 at $46.70
Change since picked: + 0.00
Earnings Date 10/24/06 (unconfirmed)
Average Daily Volume: 3.7 million
 

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