Option Investor
New Plays
Click here to email James
HAVING TROUBLE PRINTING?
Printer friendly version
New Plays
Long Plays
Short Plays
BYD None
EAT  
WYN  

Play Editor's Note: It would appear that the market has found comfort in Bernanke's comments on Friday. However, this remains a very volatile market and September is traditionally the worst month of the year to be bullish on stocks. Considering the whipsaws we have seen in the past few weeks more conservative traders may want to just step back and not trade until we see more of a trend take form. We're going to try and capture any further upside with some bullish positions but they remain higher-risk. In the market wrap this weekend Jim suggests that traders wait for the Russell 2000 smallcap index to break out over resistance near 800 before considering new bullish positions. It is up to you if you want to follow that strategy.


New Long Plays

Boyd Gaming - BYD - cls: 40.85 chg: +0.66 stop: 39.49

Company Description:
Headquartered in Las Vegas, Boyd Gaming Corporation is a leading diversified owner and operator of 17 gaming entertainment properties. (source: company press release or website)

Why We Like It:
BYD suffered through a very rough July and August after producing a bearish double-top pattern with the June and July peaks. It now appears that the stock has put in a bottom and traders have been buying the dip near its rising 10-dma and the $40.00 level. Unfortunately volume has been very low the last several days. Aggressive traders may want to go long the stock now or on a dip near $40.00. We want to see a little more confirmation of the trend higher so we're suggesting a trigger to buy BYD at $41.55. If triggered our target is the $44.90-46.00 range. Keep a wary eye on the simple 50-dma for potential overhead resistance. The Point & Figure chart is still very bearish following the late summer sell-off.

Picked on September xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/25/07 (unconfirmed)
Average Daily Volume: 1.0 million

---

Brinker Intl. - EAT - cls: 28.84 change: +0.54 stop: 27.99

Company Description:
At the end of fiscal year 2007, Brinker International either owned, operated, or franchised 1,801 restaurants under the names Chili's Grill & Bar (1,361 units), Romano's Macaroni Grill (241 units), On The Border Mexican Grill & Cantina (158 units), and Maggiano's Little Italy (41 units). (source: company press release or website)

Why We Like It:
It looks like shares of EAT have turned the corner back into a bullish trend. The stock produced a bullish double-bottom type pattern near $26.00 and its 200-week moving average back in late July and early August. Since then the stock has been developing a bullish channel higher. The stock just bounced from the bottom of its bullish channel and technical support at the 50-dma. EAT does not move super fast so this could take a few weeks but our target is the $31.75-32.00 range. We do expect to see EAT find temporary resistance near $30 and again at the 100-dma and 200-dma both overhead. FYI: The P&F chart is still bearish from the June-July sell-off. Meanwhile it just happens to be dividend season for EAT and they are paying a 9-cent quarterly dividend on September 26th to shareholders on record as of September 14th.

Picked on September 02 at $28.84
Change since picked: + 0.00
Earnings Date 10/24/07 (unconfirmed)
Average Daily Volume: 1.9 million

---

Wyndham Worldwide - WYN - cls: 31.90 change: +0.47 stop: 29.90

Company Description:
Wyndham Hotels and Resorts, a subsidiary of Wyndham Worldwide Corporation, offers upscale hotel and resort accommodations throughout the United States, Canada, Europe, Mexico and the Caribbean. All hotels are either franchised or managed by Wyndham Hotels and Resorts or an affiliate (source: company press release or website)

Why We Like It:
Shares of WYN have produced a bottoming pattern. It's a bit easier to see on a 30-minute or hourly chart but WYN has created an inverse or bullish version of a head-and-shoulders pattern. The neckline or resistance is at the $32.00 level. We are suggesting a trigger to buy the stock at $32.15. If triggered we're going to have two targets. Our first target is the $33.90-34.00 zone, which should have resistance with its 200-dma. Our second, more-aggressive target is the $35.70-36.00 range. Keep an eye on the 50-dma for potential resistance. FYI: The P&F chart is still bearish from the late summer sell-off. More conservative traders may want to use a tighter stop loss near $31.00.

Picked on September xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 11/01/07 (unconfirmed)
Average Daily Volume: 1.5 million
 

New Short Plays

None today.
 

Premier Investor New Play Archives