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New Plays
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New Plays
Long Plays
Short Plays
AFFX None
SBUX  
VARI  

Play Editor's Note: The short-term trend for the major market averages is now down but stocks look oversold and due for a bounce. We are adding a few bullish positions to the newsletter but readers should consider them more speculative and higher risk in this environment.


New Long Plays

Affymetrix - AFFX - cls: 26.06 chg: +1.20 stop: 25.45

Company Description:
Affymetrix is headquartered in Santa Clara, Calif., and has manufacturing facilities in Sacramento, Calif., and Singapore. The company has about 1,100 employees worldwide and maintains sales and distribution operations across Europe and Asia. (source: company press release or website)

Why We Like It:
Biotech stocks should always be considered higher-risk because they are so susceptible to any headline news. An investors never knows when some test or clinical trial or FDA approval will surprise the market, for better or for worse, and send the stock in an unexpected direction. Having said that shares of AFFX were showing relative strength today thanks to a better than expected earnings report. AFFX is now testing resistance at the top of its trading range near $27.00. If the market bounces then AFFX just might break out. We're suggesting a trigger to go long the stock at $27.15. If triggered our target is the $29.75-30.00 range. We do expect some resistance in the $28.70-29.00 zone given the big gap down in April 2007. FYI: The P&F chart is still bearish. Meanwhile the latest data puts short interest at a very high 22% of AFFX's 64.4 million-share float. A breakout over $27.00 could produce a short-squeeze.

Picked on July xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/25/07 (confirmed)
Average Daily Volume: 979 thousand

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Starbucks - SBUX - cls: 27.43 change: -0.53 stop: 26.49

Company Description:
Starbucks Coffee Company provides an uplifting experience that enriches people's lives one moment, one human being, one extraordinary cup of coffee at a time. (source: company press release or website)

Why We Like It:
This is another higher-risk aggressive play. SBUX appeared to breakout above its long-term trendline of resistance just a few days ago. Today's decline sent shares back under that resistance but traders were buying the dip pretty strongly this afternoon. We suspect that SBUX could rally the next four days into its earnings report due out after the bell on August 1st. We're suggesting readers buy the dip today and exit before the closing bell on August 1st to avoid holding over earnings. We'll put the stop just a little bit under today's low. More conservative traders may want to put a trigger to buy the stock at $28.51 instead. Our target is the $29.90-30.00 range.

Picked on July 26 at $27.43
Change since picked: + 0.00
Earnings Date 08/01/07 (confirmed)
Average Daily Volume: 15.3 million

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Varian Inc. - VARI - cls: 59.54 chg: +1.22 stop: 56.90

Company Description:
Varian, Inc. is a leading worldwide supplier of scientific instruments and vacuum technologies for life science and industrial applications. The company provides complete solutions, including instruments, vacuum components, laboratory consumable supplies, software, training and support through its global distribution and support systems. Varian, Inc. employs approximately 3,800 people and operates manufacturing facilities in 13 locations in North America, Europe and Asia Pacific. (source: company press release or website)

Why We Like It:
VAR recently turned in a better than expected earnings report and raised its 2007 guidance. This news has helped the stock display relative strength today but shares remain under significant resistance at the $60.00 level. Back in May 2007 the stock spiked to $60.50 so we're suggesting a trigger to buy the stock at $60.55. More aggressive traders may want to jump in early around $60.05. If triggered at $60.55 our target is the $64.85-65.00 range.

Picked on July xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/25/07 (confirmed)
Average Daily Volume: 207 thousand
 

New Short Plays

None today.
 

Premier Investor New Play Archives