Option Investor
New Plays
Click here to email James
HAVING TROUBLE PRINTING?
Printer friendly version
New Plays
Long Plays
Short Plays
IEO None
IEZ  
OSK  
PDA  

Play Editor's Note: Keep an eye on Russian telecom stock Vimpel (VIP). I'm looking for a dip near its 10-dma (around 31.75) as a potential bullish entry point.


New Long Plays

iShares DJ US Oil & Gas - IEO - cls: 81.06 chg: +1.64 stop: 77.99

Company Description:
The IEO is the iShares Dow Jones U.S. Oil & Gas exchange traded fund (ETF) that seeks to mimic the Dow Jones Select Oil Exploration and Production index.

Why We Like It:
This is a pure momentum play. A lot of folks believe oil could crash any day at any time. Yet it keeps climbing and that's feeding the strength in the IEO. As long as the trend is up we want to play it. To some this is just the greater fool theory where we buy it high and hope to sell it to someone else higher. We'll try and limit our risk with a stop loss under the recent sideways consolidation these past few days. Our short-term target is $85.00. Our secondary, more aggressive target is $87.50. This should be considered a high-risk play given our risk:reward ratio.

Picked on May 13 at $81.06
Change since picked: + 0.00
Earnings Date 00/00/00
Average Daily Volume: 125 thousand

---

iShares DJ Oil Serv. - IEZ - cls: 73.74 chg: +1.21 stop: 69.90

Company Description:
The IEZ is the iShares Dow Jones U.S. Oil Equipment exchange traded fund (ETF) that seeks to mimic the Dow Jones U.S. Select Oil Equipment and Services index.

Why We Like It:
Here's another momentum play and it's even more risky than the IEO. Why is it more risky? We think it entails more risk because it is so lightly traded. Normally we avoid equities with average daily volume less than 250K-300K. We're suggesting readers buy today's bounce. We will place the stop loss under $70.00 but more conservative traders could put their stop under today's low (71.34). Our target is the $79.50-80.00 range.

Picked on May 13 at $73.74
Change since picked: + 0.00
Earnings Date 00/00/00
Average Daily Volume: 67.5 thousand

---

Oshkosh Corp. - OSK - close: 39.90 change: -0.41 stop: 38.75

Company Description:
Oshkosh Corporation is a leading designer, manufacturer and marketer of a broad range of specialty access equipment, commercial, fire & emergency and military vehicles and vehicle bodies. (source: company press release or website)

Why We Like It:
It looks like the worst is behind it for OSK. Shares bottomed back in March and April. There was a rally up into earnings, a little post-earnings profit taking, and now it's back to marching higher. There is potential resistance at its 100-dma near $40.75 but if the broader market can keep climbing we expect OSK to drive higher. Our eight-week target is the $44.50-45.00 range. We would expect some resistance near $42.00. The Point & Figure chart is bullish with a $57 target.

Picked on May 13 at $39.90
Change since picked: + 0.00
Earnings Date 05/01/08 (confirmed)
Average Daily Volume: 975 thousand

---

Perdigao - PDA - close: 57.74 change: -0.28 stop: 54.35

Company Description:
Perdigo is one of the largest food companies and exporters in Latin America, dedicated to raising, producing and slaughtering poultry. The company also processes frozen pastas, soybeans and their derivatives, and distributes frozen vegetables. Its core business is directed to chilled and frozen food. (source: company press release or website)

Why We Like It:
The Brazilian market continues to show relative strength and we think there are more highs coming for both the Bovespa and shares of PDA. Shares of PDA broke through resistance near $55.00 several days ago. Now they have digested that move and look poised to begin a new leg higher. We're suggesting bullish positions now or on a dip anywhere above $55.00. Our target is the $64.50-65.00 range. The P&F chart is bullish with a $69 target.

Picked on May 13 at $57.74
Change since picked: + 0.00
Earnings Date 04/24/08 (confirmed)
Average Daily Volume: 163 thousand
 

New Short Plays

None today.
 

Premier Investor New Play Archives