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New Plays
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New Plays
Long Plays
Short Plays
CRZO WBMD
GMRK  
OKE  

Play Editor's Note: The market's sell-off on Monday failed to break the rising bullish channel for the S&P 500 and the NASDAQ. Lack of follow through lower today suggests that we can buy this dip inside its bullish trend. We chose to add some new plays to the newsletter but we continue to suggest caution about adding new bullish positions. We would also like to point out that most of our new plays are in the oil sector. We would suggest that you only play a couple of stocks in the same sector to limit your risk.


New Long Plays

Carrizo Oil & Gas - CRZO - close: 31.76 change: +1.13 stop: 29.75

Company Description:
Carrizo Oil & Gas, Inc. is a Houston-based energy company actively engaged in the exploration, development, exploitation and production of oil and natural gas primarily in proven onshore trends along the Texas and Louisiana Gulf Coast regions and the Barnett Shale area in North Texas. Carrizo controls significant prospective acreage blocks and utilizes advanced 3-D seismic techniques to identify potential oil and gas reserves and drilling opportunities. (source: company press release or website)

Why We Like It:
Oil stocks were the best performing sector on Tuesday. Contributing to their strength was another rise in crude oil futures as investors react to news that OPEC might announce more cuts in December. What draws us to CRZO as a bullish candidate is the stock's relative strength and bullish trend of higher lows. Shares have been out performing their peers and now CRZO looks poised to breakout over resistance at the $32.00 level. We are suggesting a trigger to go long the stock at $32.15. More conservative traders might want to wait for a rally past the July 2006 high of $31.26 or the May 2006 high of $32.95. Our target is the $35.50-36.00 range. FYI: The P&F chart points to a $46 target.

Picked on November xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 11/09/06 (confirmed)
Average Daily Volume: 345 thousand

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GulfMark - GMRK - close: 38.70 change: +0.62 stop: 36.99

Company Description:
GulfMark and its subsidiaries provide marine transportation services to the energy industry through a fleet of sixty (60) offshore support vessels, primarily in the North Sea, offshore Southeast Asia, and the Americas (source: company press release or website)

Why We Like It:
GMRK is another oil stock showing lots of relative strength. Actually GMRK is in the oil services sector, which tends to be more volatile. What is attractive about GMRK, besides the stock's relative strength, is the bullish breakout from its three-week trading range on big volume today. We're suggesting long positions now (above $38.00). More conservative traders might want to wait a day for confirmation with a rise past the $39 (or $40) level. The P&F chart is very optimistic with a $67 target. We're aiming for the $42.50-43.00 range. Be aware that we do expect some resistance at the $40.00 mark but we suspect it will be temporary.

Picked on November 28 at $38.70
Change since picked: + 0.00
Earnings Date 01/31/07 (unconfirmed)
Average Daily Volume: 108 thousand

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ONEOK Inc. - OKE - close: 42.25 change: +0.76 stop: 41.35

Company Description:
ONEOK, Inc. is a diversified energy company. We are the general partner and own 45.7 percent of ONEOK Partners, L.P., one of the largest publicly traded limited partnerships, which is a leader in the gathering, processing, storage and transportation of natural gas in the U.S. and owns one of the nation's premier natural gas liquids (NGL) systems, connecting much of the natural gas and NGL supply in the Mid-Continent with key market centers. ONEOK is among the largest natural gas distributors in the United States, serving more than 2 million customers in Oklahoma, Kansas and Texas. (source: company press release or website)

Why We Like It:
We noticed some of the utility stocks breaking out today. OKE is a natural gas/utility company. Shares have been consolidating sideways in a narrow range for weeks but today's session produced a bullish breakout over resistance near $42.00. We think this is an entry point to capture a short-term move in OKE. We're suggesting longs with the stock above $42.00. Our target is the $45.00-46.00 range. Aggressive traders may want to put your stop loss under the bottom of the trading range near $41.00. We're going to stock our stop loss at $41.35, under today's low.

Picked on November xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/26/06 (unconfirmed)
Average Daily Volume: thousand
 

New Short Plays

WebMD - WBMD - close: 34.47 change: -2.28 stop: 35.26

Company Description:
WebMD Health Corp. is the leading provider of health information services, serving consumers, physicians, healthcare professionals, employers and health plans through our public and private online portals and health-focused publications. (source: company press release or website)

Why We Like It:
We could not find any specific news to account for WBMD's weakness today. The stock dropped more than 6% on very big volume. What isn't surprising is the stock's relative weakness. WBMD has been trading in a bearish pattern of lower highs for months. The sell-off stalled near significant support in the $34 region. Shares have bounced here multiple times in the past but this time volume has been super strong on the decline. If WBMD breaks down we want to short it and target the $30 level. We're suggesting a trigger to short the stock at $33.70, which is under the March 2006 low. The latest data only lists short interest as 2.7% of the company's eight million-share float. Yet we suspect that number is an error and that short interest is probably much higher. The risk here is that with a lot of short interest any sudden rebound can produce a short squeeze. Aggressive traders may want to use a wide stop loss to give WBMD room to move. We're going to try and limit our risk with a stop loss at $35.26. Our target will be the $30.25-30.00 range.

Picked on November xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 11/02/06 (confirmed)
Average Daily Volume: 94 thousand
 

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