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New Plays
Long Plays
Short Plays
AEP CAKE
BZH IPSU
DHI  
RDC  

New Long Plays

Amer. Electric - AEP - close: 42.03 change: +0.52 stop: 40.89

Company Description:
American Electric Power is one of the largest electric utilities in the United States, delivering electricity to more than 5 million customers in 11 states. AEP ranks among the nation's largest generators of electricity, owning nearly 36,000 megawatts of generating capacity in the U.S. AEP also owns the nation's largest electricity transmission system, a nearly 39,000-mile network that includes more 765 kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined. (source: company press release or website)

Why We Like It:
High-yielding dividend stocks seem to be catching some attention lately. AEP has been consolidating sideways for almost six weeks but managed to breakout through the top of its trading range on rising volume. We're suggesting long positions with the stock above $42.00. Our short-term target is the $44.90-45.00 range. The P&F chart points to a $50 target. FYI: We do not expect shares of AEP to move very fast so it could take a few weeks to reach our target.

Picked on December 03 at $42.03
Change since picked: + 0.00
Earnings Date 01/30/07 (unconfirmed)
Average Daily Volume: 2.0 million

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Beazer Homes - BZH - close: 45.84 change: +0.18 stop: 42.99

Company Description:
Beazer Homes USA, Inc., headquartered in Atlanta, is one of the country's ten largest single-family homebuilders and also provides mortgage origination and title services to its homebuyers. (source: company press release or website)

Why We Like It:
Homebuilding stocks may have finally finished their bottoming/base-building consolidation phase that's been taking place over the last few months. The DJUSHB home construction index broke out over significant resistance near the 700 level and technical resistance at its 200-dma. Fueling the sector rally was some better than expected housing numbers and a plunging bond yield, which lowers mortgage rates. Renewed talk that the FOMC will cut rates in early 2007 also helps bolster the industry. Shares of BZH broke out over resistance at the $45 level on Thursday with strong volume behind the move. Traders bought the dip on Friday and we see it as a new entry point to go long the stock. However, more patient traders might want to sit and wait for a potential dip back toward the $44 region, which could happen if the sector sees any profit taking next week. Our target is the $49.50-50.00 range. More conservative traders may want to exit at the 200-dma near $49.00. FYI: The P&F chart displays an ascending triple-top breakout buy signal with a $58 target.

Picked on December 03 at $45.84
Change since picked: + 0.00
Earnings Date 02/06/07 (unconfirmed)
Average Daily Volume: 1.2 million

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D.R.Horton - DHI - close: 26.59 change: -0.05 stop: 24.69

Company Description:
D.R. Horton, Inc., America's Builder, is the largest homebuilder in the United States, delivering more than 50,000 homes in both fiscal years 2005 and 2006. Founded in 1978 in Fort Worth, Texas, D.R. Horton has expanded its presence to include 83 markets in 27 states in the Mid-Atlantic, Midwest, Southeast, Southwest and West regions of the United States. (source: company press release or website)

Why We Like It:
DHI is another play on the bullish breakout in the housing sector. Shares of DHI managed to breakout over resistance at the $26.00 level and its 200-dma and exponential 200-dma on Thursday. Traders bought the dip near $26.10 on Friday and we see the breakout and pull back as a new entry point to go long the stock. We're starting the play with a stop loss at $24.69 but more conservative traders might want to try with a tighter stop. Our short-term target is the $29.90-30.00 range. The P&F chart points to a $36 target.

Picked on December 03 at $26.59
Change since picked: + 0.00
Earnings Date 01/18/07 (unconfirmed)
Average Daily Volume: 3.7 million

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Rowan Cos. - RDC - close: 36.44 change: +0.42 stop: 34.45

Company Description:
Rowan Companies, Inc. is a major provider of international and domestic contract drilling services. The Company also owns and operates a manufacturing division that produces equipment for the drilling, mining and timber industries. (source: company press release or website)

Why We Like It:
RDC is another play on the strength in the oil sector. More specifically RDC is in the oil services sector, which tends to be more volatile. Daily and weekly technical indicators have turned bullish and the P&F chart is positive with a $45 target. Aggressive traders might want to go long right now following Friday's sharp rebound higher. We are suggesting that readers wait for a rally past the 200-dma near $36.80 and use a trigger at $37.05 to open positions. If we are triggered at $37.05 our target is the $41.00-42.00 range. More conservative traders may want to exit early near $40.00, which might be round-number resistance.

Picked on December xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 01/30/07 (unconfirmed)
Average Daily Volume: 3.4 million
 

New Short Plays

Cheesecake Factory - CAKE - close: 26.41 change: -1.29 stop: 27.01

Company Description:
The Cheesecake Factory Incorporated operates 118 upscale, casual dining restaurants under The Cheesecake Factory name that offer an extensive menu of more than 200 items with an average check of approximately $17.00. The Company also operates two bakery production facilities that produce over 50 varieties of quality cheesecakes and other baked products for the Company's restaurants and for other leading foodservice operators, retailers and distributors. (source: company press release or website)

Why We Like It:
Investors were not happy with CAKE's earnings report out on Thursday night. The stock lost 4.6% on Friday but managed a bounce from support near $25.75 and its 100-dma. Aggressive traders might want to try and short the stock on a failed rally under $27.00 or $28.00. We're going to wait for a new relative low. Our suggested entry point to short the stock is at $25.65. If triggered at $25.65 our target is the $22.25-22.00 range. We do expect some support near $24.00 but given the bearish technicals on the weekly chart we think any bounce at $24 would be temporary. The P&F chart currently points to a $4.00 target.

Picked on December xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 11/30/06 (confirmed)
Average Daily Volume: 1.3 million

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Imperial Sugar - IPSU - close: 22.00 change: -1.04 stop: 23.55

Company Description:
Imperial Sugar Company is one of the largest processors and marketers of refined sugar in the United States to food manufacturers, retail grocers and foodservice distributors. With packaging and refining facilities across the U.S., the Company markets products nationally under the Imperial, Dixie Crystals and Holly brands. (source: company press release or website)

Why We Like It:
IPSU has been consolidating under a bearish trend of lower highs for weeks. The trend finally produced a bearish breakdown under support at the $23.00 level on Friday. We are suggesting shorts with IPSU under $23.00, which as broken support should now act as new resistance. More aggressive traders might want to use a wider stop loss and a lower target. We are aiming for the $20.05-20.00 range. The P&F chart is very bearish with a $15 target.

Picked on December 03 at $22.00
Change since picked: + 0.00
Earnings Date 01/27/07 (unconfirmed)
Average Daily Volume: 248 thousand
 

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