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New Plays
Long Plays
Short Plays
CALM None
CBG  
CN  
COLM  
GPI  

Play Editor's Note: The markets staged a very sharp rebound this past week. The Dow Industrials rallied more than 350 points from its lows and the S&P 500 index rebounded with a 2.6% gain. Yet in spite of these big moves the Industrials and the S&P 500 remain under resistance at their early June highs. A breakout here would be very bullish. However, this looks like a set up for a failed rally at resistance and a potential (bearish) double-top pattern. After such a strong week most of the candidates we found were bullish. Please note that while we are adding several new bullish plays to the newsletter we STRONGLY suggest that readers wait for the Industrials to breakout over 13,700 and/or the S&P 500 index to breakout past 1,541 before opening new bullish positions. We are at a pivotal spot in the market's rally and this could be a turning point.


New Long Plays

Cal-Maine Foods - CALM - cls: 14.80 chg: +1.03 stop: 13.49

Company Description:
Cal-Maine Foods, Inc. is primarily engaged in the production, grading, packing and sale of fresh shell eggs. The Company, which is headquartered in Jackson, Mississippi, currently is the largest producer and distributor of fresh shell eggs in the United States and sells the majority of its shell eggs in approximately 30 states across the southwestern, southeastern, mid-western and mid-Atlantic regions of the United States. (source: company press release or website)

Why We Like It:
This is an aggressive, higher-risk play. First of all we usually don't like to chase a big move like Friday's 7.4% rally. Next, we usually like to play stocks that have a higher average daily volume. Third, we cannot find an upcoming earnings report date, which could make it tough to exit ahead of earnings. In spite of these factors Friday's move is very bullish. The stock broke out to a new multi-year high and on very big volume. The move also produced a new triple-top breakout buy signal on the P&F chart with a $31 price target. Friday's breakout comes after a four-month trading range. We are suggesting long positions with CALM above $14.25. Our target is the $17.40-17.50 range.

Picked on June 17 at $14.80
Change since picked: + 0.00
Earnings Date 07/05/07 (unconfirmed)
Average Daily Volume: 129 thousand

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CB Richard Ellis - CBG - cls: 39.40 chg: +1.63 stop: 37.49

Company Description:
CB Richard Ellis Group, Inc., an S&P 500 company headquartered in Los Angeles, California, is the world's largest commercial real estate services firm (in terms of 2006 revenue). With over 24,000 employees, the Company serves real estate owners, investors and occupiers through more than 300 offices worldwide (excluding affiliate and partner offices). (source: company press release or website)

Why We Like It:
After weeks of consolidating sideways we're seeing a bullish breakout in CBG. Technicals have turned positive and volume was pretty strong on Friday's rally. More aggressive traders may want to go long here. We are suggesting a trigger at $40.15, which is above potential round-number resistance at $40.00. We'll also be watching for a dip and bounce near $38.00 as an alternative entry point. If triggered at $40.15 our target is the $44.00-45.00 range. The P&F chart points to a $52 target.

Picked on June xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/27/07 (unconfirmed)
Average Daily Volume: 2.0 million

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China Netcom - CN - cls: 55.60 chg: +1.84 stop: 51.90

Company Description:
China Netcom is a leading broadband and fixed-line telecommunications operator in China Its service regions in China consist of Beijing Municipality, Tianjin Municipality, Hebei Province, Henan Province, Shandong Province, Liaoning Province, Heilongjiang Province, Jilin Province, Neimenggu Autonomous Region and Shanxi Province. In these service regions, the Company is a dominant provider of fixed-line telephone services, broadband and other Internet-related services, as well as business and data communications services. (source: company press release or website)

Why We Like It:
A lot of the Chinese stocks are breaking out again. Shares of CN pushed through resistance near $54.00 and did so on above average volume this Friday. Unfortunately, we need to label this an aggressive, higher-risk play. The Chinese market has been very volatile and could sell-off again at any time. Plus, the U.S. traded ADR shares of CN tend to gap open every day to adjust to how shares traded in China. With that in mind we're suggesting readers buy the breakout. More patient investors could wait for a dip back toward $54 again. The P&F chart points to a $73 target. We're aiming for the $59.50-60.00 range. More aggressive traders could aim for the highs near $62.50.

Picked on June 17 at $55.60
Change since picked: + 0.00
Earnings Date 08/20/07 (unconfirmed)
Average Daily Volume: 95 thousand

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Columbia Sportswear - COLM - cls: 68.54 chg: +1.20 stop: 65.95

Company Description:
Columbia Sportswear Company was founded in 1938 in Portland, Oregon and is a global leader in the design, sourcing, marketing and distribution of active outdoor apparel and footwear. (source: company press release or website)

Why We Like It:
Broken resistance tends to become new support and traders were quick to buy the recent dip near $66.00. Friday's rally over short-term resistance near $68 and its 10-dma looks like a new entry point for longs. We'll place our stop under $66 and target a rally into the $73.50-75.00 range. The P&F chart is very bullish with an $89 target.

Picked on June 17 at $68.54
Change since picked: + 0.00
Earnings Date 07/26/07 (unconfirmed)
Average Daily Volume: 219 thousand

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Group 1 Auto - GPI - cls: 41.96 chg: +0.89 stop: 39.95

Company Description:
Group 1 owns and operates 102 automotive dealerships, 140 franchises and 28 collision service centers in the United States and three dealerships, six franchises and two collision centers in the United Kingdom that offer 32 brands of automobiles. Through its dealerships, the company sells new and used cars and light trucks; arranges related financing, vehicle service and insurance contracts; provides maintenance and repair services; and sells replacement parts. (source: company press release or website)

Why We Like It:
It looks like shares of GPI have finally found a bottom over the last three months. Shares are developing a bullish trend of higher lows and traders recently bought the dip near $40.00. This is somewhat aggressive since GPI has clear resistance in the $43.00-43.50 zone. However, if the markets continue to rally then we believe GPI will breakout. We're suggesting long positions with GPI above $41.00. More conservative traders may want to wait for a new relative high over $43.00 or $43.50 first. Our target is the $47.00-48.00 range just under the descending 200-dma. FYI: The P&F chart is still bearish.

Picked on June 17 at $41.96
Change since picked: + 0.00
Earnings Date 07/26/07 (unconfirmed)
Average Daily Volume: 600 thousand
 

New Short Plays

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