Option Investor
New Plays
Click here to email James
HAVING TROUBLE PRINTING?
Printer friendly version
New Plays
Long Plays
Short Plays
EXPE UPS
GMO  
MSFT  

Play Editor's Note: We are adding three new bullish candidates and one new short candidate tonight. However, I'm not that bullish. Odds of a bounce after last week's sell-off are pretty good but I would expect the bounce to fail. Yet the bullish candidates we are listing should do well even if the market struggles. EXPE may be the exception there. Meanwhile I wanted to list a few stocks on our watch list. The only reason some of these stocks did not make the play list tonight was to due earnings announcements this coming week. Bearish candidates... AGO, GGP, SBUX, CHRW, WWY, MDP, DOV.


New Long Plays

Expedia - EXPE - close: 25.11 chg: +1.39 stop; 23.39

Company Description:
Expedia.com is the world's leading online travel provider, helping millions of travelers per month easily plan and book travel. (source: company press release or website)

Why We Like It:
EXPE rallied on its recent earnings report even though revenues fell over 80% compared to a year ago. The sharp breakout on Friday could be fueled by short covering once it pushed past resistance near $24.00. We are suggesting readers buy a dip. Broken resistance at $24.00 should be new support. Our suggested entry point to buy EXPE is the $24.25-24.00 range. Our target will be the $27.00-27.50 zone.

Picked on February xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/07/08 (confirmed)
Average Daily Volume: 3.7 million

---

General Moly - GMO - close: 10.08 change: +0.57 stop: 9.18

Company Description:
General Moly, formerly Idaho General Mines, is a U.S.-based molybdenum mineral development, exploration and mining company listed on the American Stock Exchange under the symbol GMO. Our primary asset, the Mount Hope project located in central Nevada, is considered one of the world's largest and highest grade molybdenum deposits. (source: company press release or website)

Why We Like It:
A lot of the metal and mining stocks are starting to look attractive. The group definitely showed some relative strength this past week. Shares of GMO have rallied back to short-term resistance in the $10.00-10.25 zone. More aggressive traders may want to buy the stock over $10.25. We see potential resistance at $10.50 and its 50-dma so we are suggesting a trigger to buy GMO at $10.55. If triggered we have two targets. Our first target is the $12.40-12.50 zone near its December highs. Our second, more aggressive target is the $13.90-14.00 range. We are starting with an aggressive (wide) stop. You may want to adjust yours.

Picked on February xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 03/31/08 (unconfirmed)
Average Daily Volume: 665 thousand

---

Microsoft - MSFT - close: 28.56 change: +0.44 stop: 27.39

Company Description:
Microsoft, headquartered in Redmond, Washington, is the largest software provider on the planet.

Why We Like It:
MSFT looks very short-term oversold and way overdue for a bounce. The Yahoo acquisition news is already out and even if MSFT raises the bid to buy Yahoo the "shock" of the news has already been digested so we're not expecting any more declines due to that merger. Meanwhile MSFT is consolidating near two significant trendlines of support (see chart). We are suggesting bullish positions now in the $27.50-29.00 (maybe $30) zone. We have two targets. Our four to six week target is the $31.85-32.00 range. We are considering a longer-term target in the $34 region.

Picked on February 10 at $28.56
Change since picked: + 0.00
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume: 90.7 million
 

New Short Plays

United Parcel Ser. - UPS - cls: 70.58 chg: -1.16 stop: 74.05

Company Description:
UPS is the worlds largest package delivery company and a global leader in supply chain and freight services. With more than a century of experience in transportation and logistics, UPS is a leading global trade expert equipped with a broad portfolio of solutions. Headquartered in Atlanta, Ga., UPS serves more than 200 countries and territories worldwide. (source: company press release or website)

Why We Like It:
The transports stocks look like they're headed for trouble. If we are moving into (or already in) a consumer-lead recession then business is definitely going to slow down. The consumer is worth more than 2/3rds of the U.S. economy. Second, the transport stocks are still dealing with sky-high fuel costs. Shares of UPS have a bearish trend of lower highs and just rolled over again last week. We are suggesting shorts now but you could easily wait for a breakdown under $70.00 or a new failed rally near $72.00, which looks like short-term overhead resistance. We're starting the play with a relatively wide stop loss at $74.05 but more conservative traders might want to consider a stop closer to $73 or $72.50. Our target is the $66.00-65.00 zone.

Picked on February 10 at $70.58
Change since picked: + 0.00
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume: 5.4 million
 

Premier Investor New Play Archives