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New Plays
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New Plays
Long Plays
Short Plays
HP None
PTEN  
SBUX  
TEVA  

Play Editor's Note: The markets have been exceptionally volatile lately. Sometimes the best play is to actually sit out and not trade. We are adding a few bullish positions because the markets, and these stocks, look poised to bounce. However, they are all more aggressive, higher-risk plays. We picked stocks that should not have any exposure to the weakness in financials and sub-prime fears.


New Long Plays

Helmerich Payne - HP - cls: 31.55 chg: +2.19 stop: 28.85

Company Description:
Helmerich & Payne, Inc. is primarily a contract drilling company. As of June 30, 2007, the Company's fleet included 147 U.S. land rigs, 27 international land rigs and nine offshore platform rigs. In addition, the Company is committed to complete another 16 new H&P-designed and operated FlexRigs*, expanding its total number of FlexRigs to 125. (source: company press release or website)

Why We Like It:
We have been warning readers about a correction in crude oil and thus the oil stocks for a while now. Crude oil has recently seen a 10% pull back and now looks poised to bounce from support near $70.00. While we still believe that crude will see a new low under $70 before the end of September, assuming there aren't any hurricanes that form and head toward the gulf, we do suspect that oil and oil stocks will bounce from here. That's why we're suggesting longs on HP, an oil service company. HPS has already seen a steep correction and is bouncing near technical support at its 200-dma. Friday's move was a big bullish engulfing reversal pattern and volume was about three times the normal on the bounce, which is normally a bullish signal. The markets, and HP, have been volatile lately and we're classifying this play as higher-risk, especially since we're following a 7.4% gain on Friday. We are suggesting long positions here but patient traders may want to try and buy a dip in the $31.00-30.00 range. We'll put our stop loss under Friday's low. We have two targets. Our first target is the $34.50-35.00 range, which looks like resistance. Our second, more aggressive target, is the $36.00-36.50 zone near its highs.

Picked on August 12 at $31.55
Change since picked: + 0.00
Earnings Date 11/15/07 (unconfirmed)
Average Daily Volume: 1.0 million

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Patterson-UTI - PTEN - cls: 22.36 change: +0.97 stop: 20.74

Company Description:
Patterson-UTI Energy, Inc. provides onshore contract drilling services to exploration and production companies in North America. The Company has approximately 345 currently marketable land-based drilling rigs. Patterson-UTI Energy, Inc. is also engaged in the businesses of pressure pumping services and drilling and completion fluid services. Additionally, the Company has an exploration and production business. (source: company press release or website)

Why We Like It:
PTEN is another play based on a potential, temporary bounce in crude oil and the energy sector. The recent sell-off in PTEN from its June highs has stalled near significant, long-term support in the $20.75-21.00 zone. PTEN has been trying to stage a rebound and volume has been pretty strong on the bounces thus far. We are suggesting new positions now although nimble traders could jump in anywhere between $21.00 (on a dip) or a breakout over $23.00. Our first target is the $24.85-25.00 range.

Picked on August 12 at $22.36
Change since picked: + 0.00
Earnings Date 11/01/07 (unconfirmed)
Average Daily Volume: 4.6 million

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Starbucks - SBUX - cls: 28.04 chg: -0.01 stop: 26.75

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:
SBUX looks like it may have found a bottom. Shares have broken through their long-term bearish trend of lower highs. Now traders are buying the recent dip and what looks like a base in the $26.50-27.50 zone. We want to see a little more confirmation since SBUX appears to have some resistance near $28.50. Therefore we're suggesting a trigger to buy the stock at $28.81, which is above resistance at $28.50 and above technical resistance at the 100-dma. If triggered at $28.81 our target is the 200-dma, currently near $31.81. FYI: More nimble traders might want to try and buy a dip or a bounce near $27.50 or the 50-dma near $27.00. Readers should also note that the P&F chart still looks very bearish and points to a $19 target.

Picked on August xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 11/15/07 (unconfirmed)
Average Daily Volume: 17.0 million

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Teva Pharma - TEVA - cls: 43.33 change: +0.38 stop: 41.45

Company Description:
Teva Pharmaceutical Industries Ltd., headquartered in Israel, is among the top 20 pharmaceutical companies in the world and is the leading generic pharmaceutical company. (source: company press release or website)

Why We Like It:
The DRG drug index closed down fractionally on Friday. More importantly the index produced its fourth bounce near support around 332. This is the fourth bounce in the last couple of weeks so the DRG may have put in a bottom here. However, this remains a high-risk play. Technicals on the DRG drug index remain bearish. Meanwhile shares of TEVA continue to out perform its peers. The stock is still inside its bullish, rising channel. Traders have continued to buy the dips in TEVA near its 50-dma. Friday was another buying opportunity so we're suggesting long positions now. Yet chart readers will note that TEVA does have some resistance near $44.00. More conservative traders may want to wait for a rise past $44.50 before initiating new positions. Our conservative target is the $45.85-46.00 range due to the old all-time high. Our secondary target is the $47.50-50.00 range.

Picked on August 12 at $43.33
Change since picked: + 0.00
Earnings Date 11/07/07 (unconfirmed)
Average Daily Volume: 5.3 million
 

New Short Plays

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