Option Investor
New Plays
Click here to email James
HAVING TROUBLE PRINTING?
Printer friendly version
New Plays
Long Plays
Short Plays
ACI None
CNI  
FDP  
MALL  
PLCE  

Play Editor's Note: The general trend for tonight's play section of the newsletter is cautiously bullish. One could easily argue that the recent strength in the markets is just an oversold bounce inside a bearish trend. While that may be the case I suspect that the market will trade higher by year-end. However, after last week's big bounce I would count on a pull back first before any further rally. Most of these new plays are suggesting an entry point on some sort of dip.


New Long Plays

Arch Coal - ACI - close: 37.86 change: -0.41 stop: 34.95

Company Description:
St. Louis-based Arch Coal is one of the nation's largest coal producers. The company's core business is providing U.S. power generators with clean-burning, low-sulfur coal for electric generation. Through its national network of mines, Arch supplies the fuel for approximately 6 percent of the electricity generated in the United States. (source: company press release or website)

Why We Like It:
Coal stocks have been rebounding sharply this past week. Short-term technicals on ACI have turned bullish again. We would be tempted to buy ACI following Friday's intraday bounce in spite of the bearish engulfing candlestick pattern. However, given our expectation for a market dip we're suggesting that readers look for a pull back toward $36.00. Our suggested entry point to buy ACI is the $36.50-36.00 range. We'll use a stop loss at $34.95. Conservative traders could adjust their stops closer to $36. Our target is the $41.50-42.00 range. The Point & Figure chart is bullish with a $68 target.

Picked on November xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 01/31/08 (unconfirmed)
Average Daily Volume: 2.6 million

---

Canadian Natl.Railway - CNI - cls: 49.04 chg: +1.21 stop: 45.99

Company Description:
CN - Canadian National Railway Company and its operating railway subsidiaries - spans Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico. (source: company press release or website)

Why We Like It:
CNI is another stock that we would be very tempted to buy the rally on Friday. The stock looks like it has put in a significant bottom in the last two weeks near $46.00. While more aggressive traders might want to jump in now we're going to wait. Our suggested entry point is on a pull back into the $48.00-47.00 range. If you want to get more detailed we'd be eyeing the $47.50 region but our "official" entry point will be $48.00. If triggered our target is the $51.85-52.00 zone. There is plenty of potential resistance at the $50.00 mark and a host of moving averages overhead. Readers might want to watch the DJUSRR railroad index to see if the sector can breakout over its trend of lower highs. FYI: The P&F chart is still bearish following the November sell-off.

Picked on November xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 01/23/08 (unconfirmed)
Average Daily Volume: 1.2 million

---

Fresh Del Monte - FDP - close: 30.92 chg: +1.09 stop: 28.39

Company Description:
Fresh Del Monte Produce Inc. is one of the worlds leading vertically integrated producers, marketers and distributors of high quality fresh and fresh-cut fruit and vegetables, as well as a leading producer and distributor of prepared food in Europe, Africa and the Middle East. (source: company press release or website)

Why We Like It:
FDP tuned in a very bullish week. Shares broke out from a three-week trading range and broke through resistance near $30.00 and its 50-dma. Plus, the rally was fueled by strong volume for three days in a row. The breakout is a buy signal but we suspect that the markets and FDP will see some profit taking this week. We're suggesting that readers wait and buy a dip. Our suggested entry point is the $30.15-29.00 range. If FDP breaks down under $30.00 there is nothing to stop it until it hits $29.00, which as broken resistance should be new support. Aggressive traders will want to put their stop loss under $27.50. We're suggesting a stop at $28.39. We have two targets. Our first target is the $32.50 mark, which was resistance back in October. Our second target is the $34.00-35.00 range. FYI: The P&F chart is still bearish from the early November sell-off.

Picked on November xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/27/08 (unconfirmed)
Average Daily Volume: 685 thousand

---

PC Mall - MALL - close: 10.87 change: -0.29 stop: 9.49

Company Description:
PC Mall, Inc., together with its subsidiaries, is a rapid response supplier of technology solutions for businesses, government and educational institutions as well as consumers. More than 100,000 different products from companies such as, but not limited to, Apple, HP, IBM, Lenovo and Microsoft are marketed to customers using relationship-based selling, direct marketing, catalogs and the Internet. (source: company press release or website)

Why We Like It:
We would consider MALL an aggressive bullish play due to volatility in the stock price. Shares were cut in half from the peak near $20.00 to the recent lows under $10.00. The current bounce is a bounce from significant support (see chart). We suspect that shares will dip again before any further gains. Our suggested entry point to buy the stock is the $10.25-10.00 zone. We would strongly suggest you wait for signs of a bounce first once MALL enters this region. We're putting the stop loss under the recent low. We have two targets. Our first target is the $12.25-12.50 zone near its 200-dma. Our second, more aggressive target is the $13.75-14.00 region. FYI: The P&F chart is still bearish following the sharp sell-off.

Picked on November xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/04/08 (unconfirmed)
Average Daily Volume: 356 thousand

---

Children's Place - PLCE - cls: 28.46 chg: +0.88 stop: 24.90

Company Description:
The Childrens Place Retail Stores, Inc. is a leading specialty retailer of children's merchandise. The Company designs, contracts to manufacture and sells high-quality, value-priced merchandise under the proprietary "The Childrens Place" and licensed "Disney Store" brand names. (source: company press release or website)

Why We Like It:
PLCE appears to have built a significant bottom over the last two months. The recent rally follows some positive earnings guidance from the company. The breakout over resistance in the $27.00-27.50 zone is encouraging but the stock is currently stalled near its 100d-ma. We suspect PLCE is overdue for a little profit taking. We are suggesting that readers buy a dip in the $26.50-26.00 zone. If triggered our target is the $29.85-30.00 range. We might consider a more aggressive target near $32.50 but the $30 level looks like it could be tough resistance. The P&F chart is actually bullish with a $36 target. FYI: PLCE will announce its November sales numbers on December 6th ahead of the opening bell.

Picked on November xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/25/07 (unconfirmed)
Average Daily Volume: 1.3 million
 

New Short Plays

None today.
 

Premier Investor New Play Archives