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New Plays
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New Plays
Long Plays
Short Plays
None DELL
  IACI
  PAYX

Play Editor's Note: We're adding a few bearish candidates to the newsletter this evening. A few more stocks that we are strongly considering as potential shorts are: SBUX, TPX, YHOO, YRCW.


New Long Plays

None today.
 

New Short Plays

DELL Inc. - DELL - close: 24.36 change: -0.85 stop: 25.51

Company Description:
Dell Inc. listens to customers and delivers innovative technology and services they trust and value. Uniquely enabled by its direct business model, Dell is a leading global systems and services company and No. 34 on the Fortune 500. (source: company press release or website)

Why We Like It:
Investors were not happy with DELL's latest earnings report and the stock crashed with the big gap down. The oversold bounce barely made it into the gap before finding resistance and now the stock is rolling over again under its 10-dma. This looks like a good spot to open new shorts. We'll stick a stop loss just above today's high. Our target is the $22.10-22.00 zone above the March lows. The P&F chart is very bearish with a $17.00 target.

Picked on December 11 at $24.36
Change since picked: + 0.00
Earnings Date 11/29/07 (confirmed)
Average Daily Volume: 27.4 million

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IAC Interactive - IACI - cls: 27.60 chg: -0.91 stop: 28.81

Company Description:
Over 20 million times a day, IAC brands touch the lives of people around the world.* More than 60 brands make up the IAC family, operated by approximately 20,000 employees in 28 countries. (source: company press release or website)

Why We Like It:
Shares of IACI look like they are building the right shoulder to a bearish head-and-shoulders pattern. The oversold bounce from November's lower-low has failed under its 50-dma. We are suggesting shorts with IACI under $28.00. There will probably be some support near $26.50. We have two targets. Our first target is the $25.50-25.00 range. The H&S pattern, if it follows through, is forecasting a target in the $22 region. Our second, more aggressive target will be the $22.50 level. The P&F chart is still bullish for now but is on the verge of a breakdown. FYI: The latest data puts short interest at about 4% of the 120 million-share float.

Picked on December 11 at $27.60
Change since picked: + 0.00
Earnings Date 02/06/08 (unconfirmed)
Average Daily Volume: 2.8 million

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Paychex - PAYX - close: 39.62 change: -0.65 stop: 40.76

Company Description:
Paychex, Inc. is a leading provider of payroll, human resource, and benefits outsourcing solutions for small- to medium-sized businesses. (source: company press release or website)

Why We Like It:
This looks like a lower-risk entry point for shorts in PAYX. The rally has stalled and shares are producing a bearish reversal near resistance at the top of its bearish channel (see chart) and near technical resistance at its 200-dma. We're suggesting a stop at $40.76 and new positions with PAYX under $40.00. Our target is the $37.25-37.00 range. More aggressive traders could aim for the $36 level and its April lows. Unfortunately, we don't have a lot of time with earnings coming up on December 19th. We do not want to hold over the report.

Picked on December 11 at $39.62
Change since picked: + 0.00
Earnings Date 12/19/07 (confirmed)
Average Daily Volume: 2.7 thousand
 

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