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New Plays
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EBAY None
LVLT  

Play Editor's note: There is no doubt that Tuesday's global sell-off was painful. The market-wide decline has produced a number of technical sell signals. Yet the pull back was so sharp nimble traders will still have an opportunity to buy the bounce. Today's rebound in the markets was very meager by any standard and we suspect that the major indices will see another test of support soon. Furthermore we expect bulls will buy the dip. The obvious risk is that there is no guarantee of a bounce and any pull back might just turn into a larger sell-off. If you are initiating any new bullish positions it might pay to wait for signs of a bounce instead of buying the first dip (see our new play comments below for details).


New Long Plays

eBay Inc. - EBAY - close: 32.06 chg: +0.06 stop: 29.49

Company Description:
Founded in 1995, eBay pioneers communities built on commerce, sustained by trust and inspired by opportunity. eBay enables e-commerce on a local, national and international basis with an array of websites -- including the eBay Marketplaces, PayPal, Skype, Kijiji, Rent.com and Shopping.com -- that bring together millions of buyers and sellers every day. (source: company press release or website)

Why We Like It:
We may have been stopped out of EBAY in yesterday's sell-off but we believe EBAY still presents a bullish opportunity. We just need to adjust our entry strategy. The bounce in EBAY was almost nonexistent today. We suspect that shares will continue lower and "fill the gap" from January. That means we can watch for EBAY to pull back toward what should be support near $30.00 and its 200-dma, not to mention a potential long-term trendline (see chart). We are suggesting that readers consider bullish positions when EBAY pulls back into the $30.50-30.00 range. More aggressive traders might want to use a wider entry range (say 31.00-30.00). Our official trigger to buy the stock will be at $30.49. We would definitely wait for signs of a bounce before initiating plays. If triggered we will have two targets. Our first, more conservative target, will be the $33.85-34.00 range. Our second, more aggressive target, will be the $37.00-38.00 zone.

Picked on February xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/25/07 (unconfirmed)
Average Daily Volume: 18 million

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Level 3 Comm. - LVLT - cls: 6.57 chg: +0.24 stop: 6.46

Company Description:
Level 3 Communications, Inc, an international communications company, operates one of the largest Internet backbones in the world. (source: company press release or website)

Why We Like It:
The rally in LVLT continues to show life. Traders quickly bought the dip and today's bounce, on big volume, looks like an aggressive trader's entry point to buy the stock. We see resistance in the $6.75-6.80 region so we will wait for a breakout. We're suggesting a trigger to buy the stock at $6.81. If triggered our target is the $7.35-7.40 range as LVLT has long-term resistance near $7.40. More aggressive traders may want to aim higher near $8.00. The P&F chart is very bullish with a $12.75 target.

Picked on February xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 05/10/07 (unconfirmed)
Average Daily Volume: 37.8 million
 

New Short Plays

None today.
 

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