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New Plays
Long Plays
Short Plays
BZP None
CTSH  
MCD  

Play Editor's Note: Tomorrow should be interesting. Today's failed rally is pretty bearish but I suspect the market is setting up for an oversold bounce soon. If the market does bounce I would only use it as a short-term trading rally and then we can load up on bearish plays again near resistance or a new lower high. The wild cards for tomorrow are the interpretation of the inflation beast in the CPI report and consumer confidence. You can probably bet that both will be worse than expected.


New Long Plays

BPZ Resources - BZP - close: 25.53 change: +1.77 stop: 22.69

Company Description:
Houston-based BPZ Energy is an oil and gas exploration and production company which has exclusive license contracts for oil and gas exploration and production covering approximately 2.4 million acres in four properties in northwest Peru. It also owns a minority working interest in a producing property in southwest Ecuador. (source: company press release or website)

Why We Like It:
BZP is a momentum play in the oil and gas sector. Shares are breaking out to new highs after consolidating under the $25.00 level for weeks. Technicals have turned positive and volume was very strong on today's breakout. If you want consider waiting for a dip back toward $25.00. We're suggesting bullish positions now. The latest data put short interest at about 10% of the float so BZP could see more of a short squeeze here. We have two targets. They are $27.50 and $29.90. The Point & Figure chart is bullish with a $40 target.

Picked on June 12 at $25.53
Change since picked: + 0.00
Earnings Date 08/02/08 (unconfirmed)
Average Daily Volume: 883 thousand

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Cognizant Tech. - CTSH - close: 34.57 change: +0.42 stop 33.65

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:
CTSH has held up pretty well the last couple of days in spite of the market volatility. I suspect the stock is set to rally high enough to fill its gap from last November. We are suggesting long positions now with a tight stop at $33.65. Our target is the $38.00 mark. The P&F chart is much more bullish with a $49 target. We do not want to hold over the late July earnings report.

Picked on June xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/31/08 (unconfirmed)
Average Daily Volume: 4.8 million

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McDonald's - MCD - close: 59.34 chg: +0.59 stop: 58.49

Company Description:
McDonald's Corporation is the ubiquitous fast-food chain found around the globe in 118 countries.

Why We Like It:
On June 9th shares of MCD exploded higher on better than expected May same-store sales data. The stock has been able to maintain its gains and traders are buying the dips. The move looks like a bullish breakout from a four-week bull-wedge pattern (see chart). There is obvious resistance near $61.50 but we're going to aim closer to the December 2007 highs. We're suggesting long positions now with a $63.00 target. Our suggested stop loss is $58.49 but more conservative traders could try and play this with a might tighter stop near today's low. If you don't like this entry point then wait for another rise over $60.00.

Picked on June 12 at $59.34
Change since picked: + 0.00
Earnings Date 07/24/08 (unconfirmed)
Average Daily Volume: 6.6 million
 

New Short Plays

None today.
 

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