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New Plays
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New Plays
Long Plays
Short Plays
DISH AVID
FLA  
LEND  

Play Editor's note: We hope everyone read the market wrap this Sunday. This is a challenging time to pick stocks. Why? Because the market is so overbought and veteran traders know that nothing goes up forever. Eventually this market will see a correction and the selling will likely be sharp and painful. It is essential that traders, no matter what direction you play, use a stop loss to try and limit your risk. The market's trend is up so we are sticking with the trend and adding more bullish than bearish candidates. However, we suggest readers consider new positions very cautiously and keep one foot pointed toward the exit door.


New Long Plays

EchoStar - DISH - close: 40.38 chg: +0.65 stop: 38.95

Company Description:
EchoStar Communications Corporation serves more than 13 million satellite TV customers through its DISH Network(TM), the fastest-growing pay-TV provider in the country since 2000. DISH Network's services include hundreds of video and audio channels, Interactive TV, HDTV, sports and international programming, together with professional installation and 24-hour customer service. (source: company press release or website)

Why We Like It:
DISH looks like an attractive bullish candidate with the recent bounce from the bottom of its rising channel. The recent consolidation looks like a bull flag inside the larger upward trend. We are suggesting longs with the stock over $40.00. Our target is the $43.50-44.00 range. More conservative traders might want to try and trigger above $40.65 before initiating new positions.

Picked on February 04 at $40.38
Change since picked: + 0.00
Earnings Date 03/14/07 (unconfirmed)
Average Daily Volume: 1.5 million

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Florida EastCo. - FLA - cls: 62.31 chg: +0.72 stop: 59.85

Company Description:
Florida East Coast Industries, Inc., (FECI) headquartered in St. Augustine, FL, conducts operations through Flagler Development Group (Flagler) and Florida East Coast Railway, L.L.C. (FECR). FECI conducts its real estate operations through Flagler which owns, develops, leases and holds in joint ventures approximately 8.8 million square feet of Class-A office and industrial space, as well as an additional 1,056,700 square feet under construction. In addition, Flagler provides construction, consulting, third party brokerage and property management (includes Flagler's wholly owned portfolio in addition to 11.1 million square feet for third parties) services and owns 828 acres of entitled land in Florida, which is available for development of up to an additional 16 million square feet. Flagler also owns approximately 3,158 acres of other Florida properties. Florida East Coast Railway, L.L.C. (FECR), a subsidiary of FECI, is a regional freight railroad that operates 351 miles of mainline track from Jacksonville to Miami and provides intermodal drayage services at terminals located in Atlanta, Jacksonville, Ft. Pierce and Miami. (source: company press release or website)

Why We Like It:
The rally in the railroads paused on Friday but we believe there is more upside to come. Meanwhile shares of FLA did not see a slow down in its rally following Thursday's bullish breakout over resistance at the $61.00 level. Volume on the current rally in FLA has been consistently above average. We are suggesting new positions now but our preferred entry point would be on a dip towards the $61 level, which should act as new support. There is potential resistance at the December high but we're going to aim for the $65.00-66.00 range. The Point & Figure chart points to a $94 target. FLA is due to report earnings on the morning of Thursday, February 15th. Therefore we plan to exit the day before at the closing bell.

Picked on February 04 at $62.31
Change since picked: + 0.00
Earnings Date 02/15/07 (confirmed)
Average Daily Volume: 113 thousand

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Accr. Home Lenders - LEND - cls: 28.60 chg: +1.19 stop: 25.75

Company Description:
Accredited Home Lenders Holding Co. is a nationwide mortgage banking company that originates, finances, securitizes, services and sells non-prime mortgage loans secured by single-family residences. (source: company press release or website)

Why We Like It:
Financials are on the run again and a few stocks in the mortgage industry are seeing some strength on potential buyout rumors. We have not heard anything specific on LEND but the stock has seen a nice bounce from the recent bottom. LEND's breakout over the $27.00 level looks like an entry point to buy the stock. The recent rally has broken through multiple levels of resistance and it would not surprise us to see a short-squeeze. The most recent (January) data put short interest at 26% of LEND's small 21.1 million-share float. We are suggesting longs with the stock over $27.00. Expect a little resistance near $30.00 and its 100-dma but we're aiming for the $32.00-33.00 range. Please note that we only have seven trading days before we plan to exit ahead of earnings.

Picked on February 04 at $28.60
Change since picked: + 0.00
Earnings Date 02/14/07 (confirmed)
Average Daily Volume: 668 thousand
 

New Short Plays

Avid Tech. - AVID - close: 34.99 chg: -2.10 stop: 37.41

Company Description:
Avid Technology, Inc. is the world leader in digital nonlinear media creation, management, and distribution solutions, enabling film, video, audio, animation, games, and broadcast professionals to work more efficiently, productively, and creatively. (source: company press release or website)

Why We Like It:
AVID failed to deliver on its recent earnings report and investors are leaving! The company missed estimates and revenues and said the first quarter was going to be tough. The stock was already in a longer-term bearish trend and Friday's sell-off puts it on the verge of breaking down under another level of significant support near $35.00. We want to see some follow through on the move before initiating any shorts. Therefore we're suggesting a trigger to short the stock at $34.65. If triggered our target is the $30.50-30.00 range. We do expect a bounce near $32.00, around the July lows. The P&F chart points to a $29.00 target. FYI: Readers should note that the most recent (January) data puts short interest at 12.2% of AVID's 40.9 million-share float, which is relatively high and raises the risk of a short squeeze.

Picked on February xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/01/07 (confirmed)
Average Daily Volume: 677 thousand
 

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