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New Plays
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AMTD CERN
SWFT NVDA

New Long Plays

TD Ameritrade - AMTD - close: 19.06 change: +0.40 stop: 18.23

Company Description:
TD AMERITRADE Holding Corporation, through its brokerage subsidiaries,(1) provides a dynamic balance of investment products and services that further the Independent Spirit of individual investors. The Company's full spectrum of services include a leading active trader program and long-term investor solutions, including a national branch system, as well as relationships with one of the largest networks of independent registered investment advisors. (source: company press release or website)

Why We Like It:
Financial stocks are leading the market higher and the broker-dealers are in the front of the pack. Shares of AMTD have a bullish trend and recently broke out over resistance at the $18.50 level. Now the stock is challenging resistance at its 200-dma and the $19.25 region. We are suggesting a trigger to go long at $19.26, which is above last week's high and its 200-dma. We'll try and limit our risk with a relatively close stop loss at $18.23. We do see resistance at the $20 level but if this market is going to stay strong then AMTD should eventually move past it. We think the biggest risk is the time frame, which is short. We don't want to hold over the October 24th earnings report. Our three-week target is the $21.00 mark.

Picked on October xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/24/06 (confirmed)
Average Daily Volume: 5.3 million

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Swift Transport. - SWFT - close: 23.88 change: +0.76 stop: 22.19

Company Description:
Swift is the holding company for Swift Transportation Co., Inc., a truckload carrier headquartered in Phoenix, Arizona. Swift's trucking subsidiary operates the largest fleet of truckload carrier equipment in the United States with regional operations throughout the continental United States. (source: company press release or website)

Why We Like It:
The Dow Jones Transportation index looks poised to breakout over the 4500 level thanks to the rapid decline in oil prices. Naturally lower oil means lower fuel costs, which increases profits for the transports. Shares of SWFT look like a potential bullish candidate. The stock appears to have produced a bullish double-bottom pattern over the last month. We're going to set our stop loss under the recent lows (double-bottom) and try to ride SWFT up to its earnings report on October 25th. We do not want to hold over the report. Please note that we do see resistance at $25.00 so don't be surprised if SWFT fails the first attempt to breakout past it. Our target is the $26.75-27.00 range. FYI: The company's recent earnings guidance was not that positive yet the stock failed to decline on the bad news. That suggests that any bad news may already be in the stock price.

Picked on October 03 at $23.88
Change since picked: + 0.00
Earnings Date 10/25/06 (confirmed)
Average Daily Volume: 1.4 million
 

New Short Plays

Cerner - CERN - close: 45.08 change: +0.08 stop: 46.05

Company Description:
Cerner Corp. is taking the paper chart out of healthcare, eliminating error, variance and waste in the care process. With more than 1,500 clients worldwide, Cerner is the leading supplier of healthcare information technology. (source: company press release or website)

Why We Like It:
The upward momentum in CERN has run out of gas. The stock has been consolidating sideways for the last six weeks although CERN did manage to hit a couple of new four-month highs during that time. The stock now looks poised to breakdown under support at the $44.00 level. If that occurs CERN could see a quick sell-off back towards support near $40.00. We're suggesting a trigger to open shorts at $43.90. If triggered our target is the $40.25-40.00 range. Please note we do not want to hold over the October 19th earnings report, which doesn't give us a lot of time. FYI: Traders should also note that the latest (September) data puts short interest at 14% of the stock's 64.2 million-share float. That is a relatively high-degree of short interest and increases the risk of a short squeeze.

Picked on October xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/19/06 (unconfirmed)
Average Daily Volume: thousand

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NVIDIA - NVDA - close: 28.30 change: -0.54 stop: 30.26

Company Description:
NVIDIA Corporation is the worldwide leader in programmable graphics processor technologies. The Company creates innovative, industry-changing products for computing, consumer electronics, and mobile devices. NVIDIA is headquartered in Santa Clara, CA and has offices throughout Asia, Europe, and the Americas. (source: company press release or website)

Why We Like It:
MRVL issued an earnings warning today and the news weighed on the semiconductor sector. The SOX index lost just over 1% and broke down from its two-month bullish channel. Shares of NVDA lost 1.8% thanks to an analyst downgrade on top of the MRVL news. The move in NVDA today looks like a breakdown from its ten-week bullish trend. This might be the beginning of a sell-off following what now appears to be a double-top with the May and September peaks. We would consider new shorts right here but traders have a choice. Our preferred entry point would be to wait for a failed rally in the $29.00-30.00 region. NVDA looks like it wants to bounce tomorrow so wait and watch to see where it rolls over. A failed rally under $30 and its 10-dma would definitely be an attractive entry point. Our short-term target is the $26.00-25.00 range. More aggressive traders may want to aim lower for the simple 200-dma. Be advised that we do expect a bounce from NVDA's initial test of its 50-dma (currently near $27). We do not want to hold over the early November earnings report.

Picked on October 03 at $28.30
Change since picked: + 0.00
Earnings Date 11/06/06 (unconfirmed)
Average Daily Volume: 10.5 million
 

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