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New Plays
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New Plays
Long Plays
Short Plays
SGP CBRL
  CHS
  FAST
  HAS
  HOT
  KFY
  LTD
  M
  NIHD

Play Editor's Note: The market's oversold bounce failed right at resistance and most of the indices and stocks I examined this weekend have already produced a short-term bearish reversal. I was honestly expecting the rally to last a little longer before rolling over but we can only play what the market gives us. There is a growing chorus of analysts suggesting that we will see the market retest and potentially break last week's low. However, with so many people still bearish if the market can breakout over Friday's resistance levels then we could see a huge short squeeze. Monitor your stop losses carefully. We are adding a number of new bearish candidates. Don't try to play them all. Just pick the ones you like.

FYI: Additional stocks that look like bearish candidates are...OMX, PWR, WYE, FDO, LANC, and LPNT.


New Long Plays

Schering-Plough - SGP - cls: 19.02 change: -1.15 stop: 17.39

Company Description:
Schering-Plough is an innovation-driven, science-centered global health care company. Through its own biopharmaceutical research and collaborations with partners, Schering-Plough creates therapies that help save and improve lives around the world. (source: company press release or website)

Why We Like It:
Shares of SGP are just getting killed over concerns that their cholesterol drug Vytorin may not be as effective as previously thought. The stock has fallen about 37% in just the last two weeks. Many analysts believe the selling has been overdone. Friday's move looks like a selling climax and we want to capture a chunk of any oversold bounce. We're suggesting long positions here at current levels. Our target is the $22.00-22.50 range.

Picked on January 27 at $19.02
Change since picked: + 0.00
Earnings Date 02/12/08 (confirmed)
Average Daily Volume: 19.2 million
 

New Short Plays

CBRL Group - CBRL - cls: 29.26 change: -0.21 stop: 30.35

Company Description:
Headquartered in Lebanon, Tennessee, CBRL Group, Inc. presently operates 570 Cracker Barrel Old Country Store restaurants and gift shops located in 41 states. (source: company press release or website)

Why We Like It:
Consumer-related stocks have been killed on concerns that the economy is slowing down and the consumer is overburdened and will spend less. This has definitely weighed on the restaurant stocks. When the market finally bounced CBRL shot higher and the bounce looks overdone. CBRL stalled right at resistance near $30.00. We are suggesting shorts here at current levels although more conservative traders could wait for a move under $28.50 first. There is potential support near $26.00 but our target is the 25.25-25.00 range. Warning: the latest data put short interest at 20% of the stock's small 22.2 million-share float. That raises the risk of a short squeeze.

Picked on January 27 at $29.26
Change since picked: + 0.00
Earnings Date 02/20/08 (unconfirmed)
Average Daily Volume: 674 thousand

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Chico's FAS - CHS - close: 8.40 change: -0.56 stop: 9.21

Company Description:
The Company is a specialty retailer of private branded, sophisticated, casual-to-dressy clothing, intimates, complementary accessories, and other non-clothing gift items. The Company operates 1,037 women's specialty stores. (source: company press release or website)

Why We Like It:
It's been a long, slow, painful death for CHS shareholders. The trend of lower highs as investors sell the rallies stretches for months. While the big volume on last week's bounce does suggest that CHS may have found a bottom we suspect that the stock will retest the lows again. Thursday-Friday last week saw CHS fail near $9.10 so we're putting our stop loss at $9.21. There appears to be some minor support near $7.80 but we're aiming for a pull back into the $7.10-7.00 zone at which point it might be time to switch sides and go long. We'll have to wait and see. FYI: The latest data put short interest at 7.7% of the stock's 175 million-share float.

Picked on January 27 at $ 8.40
Change since picked: + 0.00
Earnings Date 03/03/08 (unconfirmed)
Average Daily Volume: 3.3 million

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Fastenal Co. - FAST - close: 39.07 chg: -1.13 stop: 41.31

Company Description:
Fastenal sells different types of industrial and construction supplies. As of November 30, 2007, Fastenal operated 2,154 stores in the United States (all 50 states), Canada (all provinces), Puerto Rico (multiple), Mexico (14 states), Singapore (one location), Netherlands (one location), and China (one location) selling to the general public. (source: company press release or website)

Why We Like It:
FAST delivered a good earnings report last week, which helped power the rebound. Now the rally has run out of steam right at resistance and shares just produced a bearish reversal pattern. The stock could easily revisit or surpass its lows so we're setting two targets. Our first target is the $35.50-35.00 zone. Our second, more aggressive target is the $33.00-32.50 range. FYI: Traders should note that the most recent data lists short interest at 7.2% of FAST's 124 million-share float.

Picked on January 27 at $39.07
Change since picked: + 0.00
Earnings Date 01/22/08 (confirmed)
Average Daily Volume: 1.7 million

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Hasbro Inc. - HAS - close: 23.95 change: -0.76 stop: 25.11

Company Description:
Hasbro (NYSE: HAS) is a worldwide leader in childrens and family leisure time entertainment products and services, including the design, manufacture and marketing of games and toys ranging from traditional to high-tech. (source: company press release or website)

Why We Like It:
HAS is another stock suffering from fears of a slowdown in the economy and the consumer. The recent bounce stalled right at resistance and appears to be rolling over again. We are suggesting shorts at current levels. The recent low was $21.57 but we see the $22.00 level as support. Our target is $22.10-22.00. FYI: Short interest is at 5.3% of the stock's 131.1 million-share float.

Picked on January 27 at $23.95
Change since picked: + 0.00
Earnings Date 02/11/08 (confirmed)
Average Daily Volume: 1.9 million

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Starwood Hotels - HOT - close: 42.53 change: -1.66 stop: 45.05

Company Description:
Starwood Hotels & Resorts Worldwide, Inc. is one of the leading hotel and leisure companies in the world with approximately 890 properties in more than 100 countries and 145,000 employees at its owned and managed properties. (source: company press release or website)

Why We Like It:
HOT has done a better job than most at building a bottom over the past couple of weeks and we suspect that shares will retest it soon. This is going to be a very short-term play. HOT is due to report earnings on Thursday morning, January 31st, before the opening bell. We do not want to hold over the event so we will plan to exit on Wednesday at the closing bell unless shares hit our stop or target first. We are aiming for a pull back into the $39.00-38.50 zone at which point it may be time to switch to bullish positions. FYI: Short interest is listed at just 1.9% of the stock's 197.8 million-share float.

Picked on January 27 at $42.53
Change since picked: + 0.00
Earnings Date 01/31/08 (confirmed)
Average Daily Volume: 3.1 million

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Korn/Ferry Intl. - KFY - close: 15.13 change: -0.38 stop: 16.05

Company Description:
Korn/Ferry International, with more than 80 offices in 39 countries, is a premier global provider of talent management solutions. Based in Los Angeles, the firm delivers an array of solutions that help clients to identify, deploy, develop, retain and reward their talent. (source: company press release or website)

Why We Like It:
January's market weakness pushed KFY through significant support near $16.00. Now the rebound has stalled as support becomes new resistance. We think KFY could retest its lows and potential hit new lows. We're suggesting shorts here at current levels. Our first target is the $13.25-13.00 range. Our second, more aggressive target is the $12.25-12.00 zone. The Point & Figure chart points to a $6.50 target. FYI: It is important to note that KFY has above average short interest at 11.2% of the stock's 46 million-share float.

Picked on January 27 at $15.13
Change since picked: + 0.00
Earnings Date 03/06/08 (unconfirmed)
Average Daily Volume: 701 thousand

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Limited Brands - LTD - close: 17.07 chg: -0.44 stop: 18.05

Company Description:
Victoria's Secret is the leading specialty retailer of lingerie and beauty products, dominating its world with modern, fashion-inspired collections, prestige fragrances and cosmetics, celebrated supermodels and world-famous runway shows. (source: company press release or website)

Why We Like It:
The markets are still worried about a slowdown in the consumer so retailers like LTD will struggle. The stock's oversold bounce has stalled right at resistance near $18.00 and its 50-dma. We are looking for a retest of the recent lows. Our target is the $15.25-15.00 zone. FYI: The latest data puts short interest at 7.7% of the stock's 302 million-share float.

Picked on January 27 at $17.07
Change since picked: + 0.00
Earnings Date 02/27/08 (unconfirmed)
Average Daily Volume: 5.9 million

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Macy's - M - close: 24.95 chg: -0.43 stop: 26.05

Company Description:
Macy's, the largest retail brand of Macys, Inc., delivers fashion and affordable luxury to customers at more than 800 locations in 45 states, the District of Columbia, Puerto Rico and Guam. (source: company press release or website)

Why We Like It:
Macy's is another retailer that has seen a sharp recovery from its lows. The rally has stalled under resistance near $26.00. We want to capture a drop back toward the $22.00 region. Aggressive traders could aim for the January lows near $21.00. FYI: The most recent data puts short interest at 3% of the 431 million-share float.

Picked on January 27 at $24.95
Change since picked: + 0.00
Earnings Date 02/26/08 (unconfirmed)
Average Daily Volume: 7.8 million

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NII Holdings - NIHD - close: 39.46 chg: -2.45 stop: 43.01

Company Description:
NII Holdings, Inc., a publicly held company based in Reston, Va., is a leading provider of mobile communications for business customers in Latin America. NII Holdings, Inc. has operations in Argentina, Brazil, Mexico, Peru and Chile. (source: company press release or website)

Why We Like It:
There doesn't appear to be any end in sight for the selling in NIHD. The oversold bounce failed right at resistance and shares have already slipped under round-number support at $40.00. We are listing two targets. Our first target is $35.50-35.00. Our second, more aggressive target is the $32.00-30.00 zone. The Point & figure chart suggests a $19 target. FYI: The most recent data lists short interest at 4.1% of the 171 million-share float.

Picked on January 27 at $39.46
Change since picked: + 0.00
Earnings Date 02/28/08 (unconfirmed)
Average Daily Volume: 3.6 million
 

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