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New Plays
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New Plays
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Play Editor's Note: Alas hopes for a spring rally may have died. It was just a few days ago that I warned readers that we were probably facing a bear market rally. While I thought the market may have put in a bottom several days ago there has been no follow through on the bullish breakouts. Once again the path of least resistance appears to be down. Here's a few more stocks I'm watching.... CMED might be a bullish candidate above $42.00 but I'm worried about resistance near $45.00. LBTYA looks like a short with Friday's breakdown under $34.00 but stop loss placement looks like a challenge. WFMI looks like a great short candidate right here with a stop loss above $34.00.

New Long Plays

Hormel Foods - HRL - close: 41.62 change: +0.43 stop: 39.85

Company Description:
Hormel Foods Corporation, based in Austin, Minn., is a multinational manufacturer and marketer of consumer-branded food and meat products, many of which are among the best known and trusted in the food industry. (source: company press release or website)

Why We Like It:
Hormel Foods, the infamous purveyor of spam, has developed quite a trend in its share price. The stock doesn't move very fast but it's in a multi-year bullish run. The most recent consolidation sideways round support near $40 and its 50-dma. This looks like an entry point for long positions. However, the wider market concerns us so we want to see a little more confirmation by HRL. We're suggesting readers buy HRL at $41.80. More conservative traders might want to wait for a new high over $42.50. We anticipate holding this stock on the newsletter for about six to eight weeks. Our target is the $45.75-46.00 range. The Point & Figure chart is much more bullish with a $64 target.

Picked on March xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 05/22/08 (unconfirmed)
Average Daily Volume: 513 thousand

New Short Plays

Cognizant Tech - CTSH - cls: 29.18 chg: +0.31 stop: 31.01

Company Description:
Cognizant is a leading provider of information technology, consulting and business process outsourcing services. (source: company press release or website)

Why We Like It:
The simple 100-dma has been consistent overhead resistance for shares of CTSH. The stock just failed there again (and again and again) this past week. The bearish trend of lower highs is still intact and the move under $30 and its 50-dma looks like a new entry point for shorts. We're suggesting a stop loss above the 100-dma. Our first target is the 26.25-26.00 zone. Our second, more aggressive target is the $24.25-24.00 range. FYI: CTSH is due to present at an analyst conference on March 31st. The P&F chart is bearish with an $18 target. We don't see any serious short interest listed (it's around 2.7%).

Picked on March 30 at $29.18
Change since picked: + 0.00
Earnings Date 05/01/08 (unconfirmed)
Average Daily Volume: 5.1 million


Longs Drug Stores - LDG - cls: 41.30 chg: -0.22 stop: 43.55

Company Description:
Headquartered in Walnut Creek, California, Longs Drug Stores Corporation is one of the most recognized retail drug store chains on the West Coast and in Hawaii. The Company operates 510 retail pharmacies and offers a wide assortment of merchandise focusing on health, wellness, beauty and convenience. (source: company press release or website)

Why We Like It:
LDG broke its long-term up trend back in December 2007. The oversold bounce took almost two months before running out of steam near $50 and its 200-dma. Now LDG is working on a bearish leg lower. Recently LDG has run into resistance around $43.00-43.50. Thursday's move looked like a failed rally and bearish reversal pattern. Friday's drop just confirms it. We're suggesting a stop at $43.55. Our first target is the $38.25-38.00 zone. Our second target is the $35.25-35.00 zone. The P&F chart is bearish with a $29.00 target.

Picked on March 30 at $41.30
Change since picked: + 0.00
Earnings Date 05/15/08 (unconfirmed)
Average Daily Volume: 596 thousand

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