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New Plays
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HPQ ANDE
  GTRC
  HIBB
  SAFT

New Long Plays

Hewlett Packard - HPQ - close: 42.20 change: +0.52 stop: 39.95

Company Description:
HP is a technology solutions provider to consumers, businesses and institutions globally. The company's offerings span IT infrastructure, global services, business and home computing, and imaging and printing. For the four fiscal quarters ended Oct. 31, 2006, HP revenue totaled $91.7 billion. (source: company press release or website)

Why We Like It:
This is a relative strength/momentum play. HPQ has been marching higher in spite of the market volatility. Volume has been picking up as the stock hits new multi-year highs. Technicals are naturally bullish and arguably nearing overbought conditions but HPQ looks poised for more gains after the November-mid December consolidation. Our short-term target is the $46.00 level. We do not want to hold over the late February earnings report. FYI: More conservative traders might want to put their stop loss under $41.00.

Picked on January 07 at $42.20
Change since picked: + 0.00
Earnings Date 02/20/07 (unconfirmed)
Average Daily Volume: 13.1 million
 

New Short Plays

The Andersons Inc. - ANDE - cls: 38.53 chg: -1.61 stop: 40.25

Company Description:
The Andersons, Inc. is a diversified company with interests in the grain, ethanol and plant nutrient sectors of U.S. agriculture, as well as in railcar marketing, industrial products formulation, turf products production, and general merchandise retailing. (source: company press release or website)

Why We Like It:
In spite of positive comments about the outlook for ethanol shares of ANDE have continued to turn lower with the drop in crude oil prices. ANDE spent the last part of December building a failed rally under $43.00 and its November highs. Friday's decline was fueled by strong rally and ended with a breakdown under $40.00 and its 50-dma. Now shares are flirting with a breakdown under its three-month trendline of support and technical support at the 100-dma. We are suggesting a trigger at $36.99 to short the stock. If triggered at $36.99 our target is the $33.00-30.00 range. FYI: Traders should note that ANDE can be a volatile stock at times and the latest (December) data put short interest at 7.2% of ANDE's 14.7 million-share float. That's not a very big float and the relatively high short interest raises the risk of a short squeeze.

Picked on January xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/08/07 (unconfirmed)
Average Daily Volume: 333 thousand

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Guitar Center - GTRC - close: 42.91 change: -1.19 stop: 45.05

Company Description:
Guitar Center is the leading United States retailer of guitars, amplifiers, percussion instruments, keyboards and pro-audio and recording equipment. Our retail store subsidiary presently operates more than 195 Guitar Center stores across the United States. In addition, our Music & Arts division operates more than 90 stores specializing in band instruments for sale and rental, serving teachers, band directors, college professors and students. We are also the largest direct response retailer of musical instruments in the United States through our wholly owned subsidiary, Musician's Friend, Inc., (source: company press release or website)

Why We Like It:
Last month GTRC produced another failed rally in an eighteen-month trend of lower highs. Now shares are trading back under its 200-dma, 50-dma and are hitting new four-week lows. Additionally the stock has broken its three-month trend of higher lows and is flirting with a breakdown under its 100-dma. Aggressive traders may want to consider short positions now. We are suggesting readers wait and watch for a drop under $42.50. We'll use a trigger to short the stock at $42.45. If triggered we'll have two targets. Our conservative target is the $40.10 level. Our aggressive target will be $37.50. Please note this is considered an aggressive, higher risk play because GTRC is due to report its fourth quarter and full-year top line sales number on January 10th. The company's sales numbers could spark a big move either direction. More conservative traders should definitely wait until after the report has been announced. We do not want to hold over the February 8th earnings report. FYI: Be advised that the latest (December) data put short interest at almost 18% of GTRC's 29.2 million-share float. That is a high amount of short interest and a small float and combined they raise the risk of a short squeeze, which is another reason why we are labeling this a high-risk play.

Picked on January xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/08/07 (confirmed)
Average Daily Volume: 554 thousand

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Hibbett Sporting Goods - HIBB - cls: 29.52 chg: -1.01 stop: 31.15

Company Description:
Hibbett Sporting Goods, Inc. operates sporting goods stores in small to mid-sized markets, predominantly in the Sunbelt. The Company's primary store format is Hibbett Sports, a 5,000-square-foot store located in enclosed malls and dominant strip centers. (source: company press release or website)

Why We Like It:
HIBB appears to have broken its five-month bullish trend with Friday's drop under support at $30.00 and its 50-dma. The stock also appears to have produced a double-top in the November-December time frame. Meanwhile technical indicators have deteriorated. We are suggesting shorts with HIBB under $30.00. There is potential support at $28.00 with its 100-dma and potential support with the 200-dma near $27. Conservative traders may want to exit near $28. Our target is the $26.75 mark.

Picked on January 07 at $29.52
Change since picked: + 0.00
Earnings Date 03/15/07 (unconfirmed)
Average Daily Volume: 340 thousand

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Safety Ins. Group - SAFT - close: 49.05 chg: -1.28 stop: 52.51

Company Description:
Safety Insurance Group, Inc. is the parent of Safety Insurance Company and Safety Indemnity Insurance Company, which are Boston, Mass., -based writers of property and casualty insurance. Safety is the second largest writer of personal automobile insurance in Massachusetts. (source: company press release or website)

Why We Like It:
Breakdown alert! The end of December saw SAFT produce a failed rally near $52.50. This past week the sell-off continued and shares broke support at $50.00 and its 200-dma. Now the stock is poised to breakdown under a two-year trendline of support. Aggressive traders may want to jump in with short positions now. We want a little more confirmation so we're suggesting a trigger to short the stock at $48.49. If triggered we'll have two targets. Our conservative target is $45.10. Our aggressive target will be the $42.50 level. FYI: The latest (December) data put short interest at 7% of SAFT's 13.1 million-share float. That does raise the risk of a short squeeze.

Picked on January xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/30/07 (unconfirmed)
Average Daily Volume = 83 thousand
 

In Play Updates and Reviews

Long Play Updates

Cascade - CAE - close: 53.03 change: -1.57 stop: 53.49

CAE could not evade the profit taking on Friday. Shares lost 2.8% and completely erased Thursday's gains. In spite of the decline our strategy remains unchanged. We're waiting for a breakout over resistance at the $55.50 level. Our suggested trigger to go long the stock is at $55.65. If triggered our target is the $59.65-60.00 range. Currently the P&F chart is bullish with a $70 target but if shares trade over $56 it will produce a new quadruple top breakout buy signal. FYI: If CAE closes (or trades) under support near $52 we'll probably drop it as a bullish candidate. Traders should be aware that the MACD on the weekly chart is looking a little tired and the RSI indicator on the daily chart isn't looking very bullish either. Those are just a couple of reasons why it's important to wait for the breakout before considering new positions.

Picked on January xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 03/08/07 (unconfirmed)
Average Daily Volume: 66 thousand

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MedImmune - MEDI - close: 34.32 change: +0.80 stop: 31.90

Shares of MEDI managed to buck the trend on Friday and posted a strong gain. Shares rose 2.3% on big volume to breakout over resistance and close at new multi-month highs. The strong week has turned most of the technical indicators positive. Fueling the move was strength in biotechs earlier this past week. However, Friday's rally appears to have been ignited by new talk that MEDI should put itself up for sale since a larger company could do a better job marketing MEDI's products. We were suggesting a trigger to buy the stock at $33.80 but MEDI gapped open at $33.98, which is our new entry price. Traders can choose to buy the stock now or look for a dip back toward what should be support in the $33.75-33.80 region. Our target is the $36.50-37.00 range. We do not want to hold over the early February earnings report.

Picked on January 05 at $33.98 *gap open entry*
Change since picked: + 0.34
Earnings Date 02/01/07 (unconfirmed)
Average Daily Volume: 2.3 million

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Sina Corp. - SINA - close: 31.09 change: +0.03 stop: 28.95

Many of the Chinese stocks suffered some profit taking on Friday. The Chinese-Internet related stocks were somewhat resilient and SINA fared better than most. We do not see any changes from our new play description from Thursday night so we're reposting it here:

Chinese Internet stocks have staged a two-day rally. Volume has also picked up with SINA's volume coming in at more than three times the daily average Thursday. Thursday's rally pushed SINA through resistance at the $30.00 level and helped the MACD produce a new buy signal on the daily chart. We normally do not like to chase a big move so we're labeling this an aggressive, higher-risk play. We would consider positions now but our preferred entry point would be on a dip back toward $30.50 or near the $30.00 level. Broken resistance in the $29.50-30.00 range should now act as short-term support. Our target is the $34.50-35.00 range. The P&F chart has just broken through resistance and now points to a $52 target. It might be worth noting that the latest (December) data put short interest at just over 9% of SINA's 37.5 million-share float. That could be enough to substantially raise the risk of a short squeeze, which is good news if you're long the stock. We do not want to hold over the early February earnings report.

Picked on January 04 at $31.06
Change since picked: + 0.03
Earnings Date 02/08/07 (unconfirmed)
Average Daily Volume: 749 thousand
 

Short Play Updates

Cheesecake Factory - CAKE - cls: 24.66 chg: -0.44 stop: 26.36*new*

CAKE has spent most of the last three weeks trading sideways. While the lack of downward momentum might be frustrating for the bears the trend remains negative. We're not suggesting new positions at this time but a decline under $24.50 could be used as a new entry point. We're electing to move our stop loss down to $26.36, which is near the 100-dma overhead. Our target is the $22.25-22.00 range. The P&F chart currently points to a $4.00 target. FYI: The most recent (December) data puts short interest at 10.6% of CAKE's 73.7 million-share float. That is relatively high short interest and could raise the risk of a short-squeeze if CAKE manages to rally.

Picked on December 18 at $25.65
Change since picked: - 0.99
Earnings Date 11/30/06 (confirmed)
Average Daily Volume: 1.3 million

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Citrix Sys. - CTXS - close: 27.85 change: -0.10 stop: 28.43

The rally in technology (and software stocks) stalled on Friday. Shares of CTXS lost 0.35%. The overall, larger trend in CTXS is still bearish but short-term the stock might be still trying to bounce. Our stop loss may be too tight and more aggressive traders may want to consider adjusting their stop toward $28.75 or the $29.00 level putting it above the six-week trendline of lower highs. We would wait for a drop back under $27.00 before considering new shorts. The P&F chart currently points to a $18 target. Our short-term target is $25.10-25.00. More aggressive traders may want to aim lower.

Picked on December 22 at $27.45
Change since picked: + 0.40
Earnings Date 01/27/07 (unconfirmed)
Average Daily Volume: 3.8 million

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21st Century - TCHC - close: 21.95 change: -0.21 stop: 24.84*new*

We do not see any changes from our previous updates. TCHC has declined to potential technical support at its rising 100-dma near $22.00. We strongly suggest that more conservative traders exit right here. If TCHC doesn't move lower soon we'll exit early. Currently we're aiming for the $21.50-20.00 range. We're adjusting our stop loss to $24.84. We are not suggesting new plays at this time.

Picked on December 10 at $24.84
Change since picked: - 2.89
Earnings Date 11/01/06 (confirmed)
Average Daily Volume: 115 thousand
 

Closed Long Plays

AllState - ALL - close: 65.18 change: -0.18 stop: 63.49

We have been trying to ride ALL's bullish trend for the last three weeks but have thus far failed to achieve any success. The stock's upward momentum has stalled just as the S&P's IUX insurance index has begun to see some profit taking. We're suggesting an early exit to avoid or limit any losses. We'd keep an eye on ALL for future possibilities if shares bounce strongly from the 50-dma or hit a new high.

Picked on December 15 at $65.25
Change since picked: - 0.07
Earnings Date 01/31/07 (unconfirmed)
Average Daily Volume: 2.4 million

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ONEOK Inc. - OKE - close: 41.86 change: -0.78 stop: 42.25

We have been stopped out of OKE at $42.25 (breakeven). The market-wide profit taking continued to impact shares of OKE and the stock lost 1.8% to breakdown under support at its 50-dma and the $42.50 level (and now the $42.00 level).

Picked on November 28 at $42.25
Change since picked: - 0.39
Earnings Date 02/21/07 (unconfirmed)
Average Daily Volume: 547 thousand
 

Closed Short Plays

None
 

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