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CAL None
PJC  
RATE  

New Long Plays

Continental Air. - CAL - close: 47.45 chg: +1.73 stop: 42.85

Company Description:
Continental Airlines is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 3,200 daily departures throughout 400 additional points are served via SkyTeam alliance airlines. With 44,000 employees, Continental has hubs serving New York, Houston, Cleveland and Guam, and together with the Americas, Europe and Asia, serving 151 domestic and 136 international destinations. (source: company press release or website)

Why We Like It:
The XAL airlines index is breaking out to new two-year highs thanks to plunging oil prices and recent M&A activity. CAL is one stock contributing to the sector's strength with its own five-year high today. The stock was upgraded to a "buy" this morning. In the last few weeks there has been a lot of talk about CAL being a potential merger/acquisition target if the industry continues to consolidate. The bullish M&A environment and sliding crude oil could continue to push CAL to new highs. We are suggesting long positions with CAL above $45.50. Readers can choose to go long the stock now or look for a dip. There might be some resistance at $50.00 but the weekly chart doesn't show any real resistance until the $52.00-53.00 region. Our target is the $51.75-52.00 range. More conservative traders might want to try a tighter stop loss. Please note that this play might be considered more aggressive because of our one-week time frame. CAL is due to report earnings on January 18th and we do not want to hold over the report.

Picked on January 10 at $47.45
Change since picked: + 0.00
Earnings Date 01/18/07 (confirmed)
Average Daily Volume: 4.7 million

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Piper Jaffray - PJC - close: 69.45 chg: +1.60 stop: 64.24

Company Description:
Piper Jaffray Companies is a leading, international middle market investment bank and institutional securities firm, serving the needs of middle market corporations, private equity groups, public entities, nonprofit clients and institutional investors. (source: company press release or website)

Why We Like It:
The XBD broker-dealer index is breaking out to new all-time highs again. Meanwhile shares of PJC are breaking out past resistance at its ten-week trendline of lower highs (see chart). We are suggesting long positions with the stock above $69.00. More conservative traders may want to wait for a rise past the $70.00 mark just to confirm the move. We noticed that the recent rally has produced a new triple-top breakout buy signal on the P&F chart that now points to a $78 target. Our short-term target is the $74.75-75.00 range. We do have a wide stop loss under the 100-dma but we'll try and tighten it the first chance we get. Please note that we do not want to hold over the January 24th earnings report.

Picked on January 10 at $69.45
Change since picked: + 0.00
Earnings Date 01/24/07 (confirmed)
Average Daily Volume: 197 thousand

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Bankrate Inc. - RATE - close: 37.32 chg: +2.04 stop: 34.90

Company Description:
Bankrate, Inc. owns and operates Bankrate.com, a leading Internet consumer banking marketplace. Bankrate.com is a destination site of personal finance channels, including banking, investing, taxes, debt management and college finance. Bankrate.com is the leading aggregator of more than 300 financial products, including mortgages, credit cards, new and used auto loans, money market accounts and CDs, checking and ATM fees, home equity loans and online banking fees. Bankrate.com reviews more than 4,800 financial institutions in 575 markets in 50 states. (source: company press release or website)

Why We Like It:
We do not know what started it but RATE could be in the beginning stages of a huge short-squeeze. The stock bounced from support near $34.00 and its exponential 200-dma this morning and just continued to soar on huge volume. The move looks like a bullish reversal on both the daily and weekly chart. However, we're not quite convinced to buy this bounce yet so we're suggesting a trigger at $38.25, just above today's high. If triggered at $38.25 our target will be the $41.90-42.00 range near the December highs. More aggressive traders may want to aim higher. FYI: The most recent (December) data put short interest at more than 35% of RATE's 11.2 million-share float.

Picked on January xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/06/07 (confirmed)
Average Daily Volume: 334 thousand
 

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