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New Plays
Long Plays
Short Plays
MASI BIG
TRA JWN

Play Editor's Note: If you have read this weekend's market wrap then you know that Jim is very cautious but still bullish. We are both concerned about next week. Not only is the bounce already struggling but we're about to move into the two worst months of the year for stocks. Keep in mind that you could easily argue we are in no-man's land without any clear short-term market direction and the best trade may be to just sit on the sidelines. Bigger picture we're still in a bear-market bounce, which will roll over sooner or later.


New Long Plays

Masimo Corp. - MASI - close: 37.57 change: +0.68 stop: 35.75

Company Description:
Masimo develops innovative monitoring technologies that significantly improve patient care-helping solve "unsolvable" problems. In 1995, the company debuted Measure-Through-Motion-and-Low-Perfusion pulse oximetry, known as Masimo SET, which virtually eliminated false alarms and increased pulse oximetry's ability to detect life-threatening events. (source: company press release or website)

Why We Like It:
We are returning to MASI. The stock has continued to out perform the broader market and the stock looks like it's almost done digesting the bullish breakout over $35. Shares have a bullish trend of higher lows and it's coiling for another breakout higher again. We are suggesting long positions now or on another dip back to the 10-dma near $36.35. More conservative traders will want to consider waiting for a new rise over short-term resistance at $37.75 before initiating positions. Our target is $41.25. We do not want to hold over the August 4th earnings report.

Picked on July 27 at $37.57
Change since picked: + 0.00
Earnings Date 08/04/08 (confirmed)
Average Daily Volume: 622 thousand

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Terra Industries - TRA - cls: 50.74 chg: +2.77 stop: 48.45

Company Description:
Terra Industries Inc., with 2007 revenues of $2.4 billion, is a leading international producer of nitrogen products. (source: company press release or website)

Why We Like It:
It has been a very volatile week for TRA. The stock has endured several five-dollar swings in just the last couple of days following the company's earnings report. This sort of volatility makes it a challenge to place a stop loss. Overall the trend is bullish with a consistent pattern of higher lows. The MACD on the daily chart has produced a new buy signal. The Point & Figure chart is bullish with a $64 target. We're suggesting long positions at $51.30. The last couple of days has seen the rally stall at $51.25. If triggered our first target is $56.00. Our second target is $59.85. We'll try and play with a stop loss at $48.45, which may be too tight given the recent volatility.

Picked on July xx at $xx.xx <-- see trigger
Change since picked: + 0.00
Earnings Date 07/24/08 (confirmed)
Average Daily Volume: 4.8 million
 

New Short Plays

Big Lots - BIG - close: 27.79 change: -1.37 stop: 30.51

Company Description:
Big Lots is the nation's largest broadline closeout retailer. The Company currently operates 1,353 BIG LOTS stores in 47 states. (source: company press release or website)

Why We Like It:
This play is for aggressive players only! BIG has huge short interest. The latest data put short interest at 45% of the 80 million-share float. That could amount to a massive short squeeze if one were to spark. In the bears favor is BIG's breakdown of its bullish trend from January through early July. Plus, the bounce has already failed twice. The bullish camp will argue that BIG bounced from its 38.2% Fibonacci retracement and its 100-dma. Unfortunately for the bulls that bounce has already run out of steam. We are suggesting shorts here or on another failed rally under $30. Don't be surprised if BIG sees another bounce in the $27.00-26.50 zone. Our target is $23.25 just above the 200-dma.

Picked on July 27 at $27.79
Change since picked: + 0.00
Earnings Date 08/28/08 (unconfirmed)
Average Daily Volume: 3.2 million

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Nordstrom - JWN - close: 28.94 chg: -0.20 stop: 31.51

Company Description:
Nordstrom, Inc. is one of the nation's leading fashion specialty retailers, with 159 stores located in 28 states. Founded in 1901 as a shoe store in Seattle, today Nordstrom operates 105 full-line stores, 50 Nordstrom Racks, two Jeffrey boutiques and two clearance stores. (source: company press release or website)

Why We Like It:
The U.S. consumer is still struggling. Oil may be off its highs but gas prices remain a challenge. JWN may service the higher-end consumer but it seems that everyone is spending less these days. The trend is JWN is bearish and the stock recently failed after filling its gap from mid July. This looks like a new entry point for shorts. Our short-term target is the $25.05 mark. More aggressive traders may want to aim lower. We do not want to hold over the mid August earnings report.

Picked on July 27 at $28.94
Change since picked: + 0.00
Earnings Date 08/14/08 (unconfirmed)
Average Daily Volume: 5.7 thousand
 

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