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New Long Plays

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New Short Plays

Patterson Cos. - PDCO - close: 33.42 change: -0.19 stop: 34.51

Company Description:
Patterson Companies, Inc. is a value-added distributor serving the dental, companion-pet veterinarian and rehabilitation supply markets. (source: company press release or website)

Why We Like It:
PDCO's oversold bounce from its late May gap down has stalled just as it fills the gap. This is a classic pose for a stock in a bearish trend. PDCO doesn't move very fast but investors seem to be selling into the rallies. We're suggesting shorts with a relatively tight stop loss. Our target is the $30.50-30.00 zone. The P&F chart is bearish with a $28 target. FYI: The most recent data listed short interest at about 11% of the 98 million-share float. That is a relatively high degree of short interest for this stock.

Picked on June 03 at $33.42
Change since picked: + 0.00
Earnings Date 08/21/08 (unconfirmed)
Average Daily Volume: 1.6 million

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Porfolio Recov.Assoc. - PRAA - cls: 39.66 chg: -0.41 stop: 41.01

Company Description:
Portfolio Recovery Associates is a full-service provider of outsourced receivables management and related services. The Company's primary business is the purchase, collection and management of portfolios of defaulted consumer receivables. (source: company press release or website)

Why We Like It:
The market is still worried about credit risk and consumer debt so PRAA may have a hard time going forward. The trend in PRAA has definitely taken a turn for the worse. The stock broke through major levels of support back in May. Now the oversold bounce is struggling and PRAA is barely holding on to its 100-dma. We are suggesting a trigger under the April low of $39.25. Our entry point will be $39.19. If triggered our first target is the $35.25-35.00 zone. Our second target is $32.50. The P&F chart is bearish with a $29.00 target. We have to label this a high-risk, aggressive play because PRAA has a lot of short interest, which raises the risk of a short squeeze. The most recent data listed short interest at 37% of the very small 14.7 million-share float. That is almost a month's worth of short interest. Conservative traders will want to avoid this one since our stop loss may not protect us very well in a "fast market".

Picked on June xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/24/08 (unconfirmed)
Average Daily Volume: 157 thousand
 

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