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GTBBOX

New Long Plays

Goodyear Tire - GT - close: 12.16 chg: +0.43 stop: 11.64

Company Description:
Goodyear manufacturers and markets tires, several lines of belts, hose and other engineered rubber products for the transportation industry and various industrial and consumer markets, as well as rubber-related chemicals for various applications. Goodyear operates more than 100 plants in 29 countries. (source: company press release or website)

Why We Like It:
GT displayed some relative strength on Friday. The stock added 3.6% and on above average volume, which is a feat considering that Friday was the lowest volume day of the year. Unfortunately for the bulls the rally stalled near the early August highs and its descending 100-dma (technical resistance). Looking at the chart it appears that GT has spent the last three weeks digesting its late July and early August gains and now shares look poised to begin another leg higher. We're suggesting a trigger to go long the stock at $12.35, which is above Friday's high. If triggered our target is the $13.75-14.00 range. Our time frame is about six weeks. The P&F chart on GT is still bearish.

Picked on August xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 11/03/06 (unconfirmed)
Average Daily Volume: 2.9 million
 

New Short Plays

Black Box - BBOX - close: 38.25 change: -0.49 stop: 40.26

Company Description:
Black Box is the world's largest technical services company dedicated to designing, building and maintaining today's complicated data and voice infrastructure systems. Black Box services 175,000 clients in 141 countries with 168 offices throughout the world. (source: company press release or website)

Why We Like It:
BBOX is under performing its peers in the networking sector. The NWX networking index has broken out from its bearish channel and appears to be consolidating its gains before heading higher. BBOX is moving the opposite direction. The stock has produced a bearish double-top pattern over the last couple of months and now the stock is breaking down to new relative lows. Technicals are bearish and its Point & Figure chart points to a $17 target. We are suggesting shorts with BBOX under $39.00 and our target is the $35.25-35.00 range. More conservative traders might want to consider an early exit near the June lows around $36.65.

Picked on August 27 at $38.25
Change since picked: + 0.00
Earnings Date 10/31/06 (unconfirmed)
Average Daily Volume: 243 thousand
 

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