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New Plays
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New Plays
Long Plays
Short Plays
HNZ AXS
JBHT ENH
K  

Play Editor's Note: This is an extremely tough market to trade. As Jim said in the wrap this weekend there are a lot of cross currents pulling at the market. Seasonally this is the worst time of year for stocks and we're already in a bear market. The path of least resistance should be down. A lot of traders are keeping an eye on the VIX for a spike to the 30 region as a sign for a potential bottom. I am adding some bullish trades but they are more defensive stocks. A perfectly good strategy this week would be to do nothing. I would be looking for any bounce in the major averages to fail.


New Long Plays

HJ Heinz - HNZ - close: 52.61 chg: +0.15 stop: 51.45

Company Description:
H. J. Heinz Company, offering Good Food Every Day, is one of the worlds leading marketers and producers of healthy and convenient foods specializing in ketchup, sauces, meals, soups, snacks and infant nutrition. (source: company press release or website)

Why We Like It:
Right now there is a lot of investor uncertainty and it looks like money is flowing toward "safer" stocks. HNZ is one such stock. You could argue that the company might be seeing rising input costs but even in a tough economy people are still going to buy their products. Shares are in a bullish up trend and the technicals have turned positive again. Friday's bounce near its 10-dma looks like another bullish entry point. Our only complaint against HNZ is that shares move so slowly. We're suggesting a stop loss at $51.45. A 5% move from here would be $55.24.

Picked on September 14 at $52.61
Change since picked: + 0.00
Earnings Date 11/28/08 (unconfirmed)
Average Daily Volume: 2.7 million

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JB Hunt Transport - JBHT - close: 37.94 chg: +0.21 stop: 35.49

Company Description:
J.B. Hunt Transport Services, Inc. focuses on providing safe and reliable transportation services to a diverse group of customers throughout the continental United States, Canada and Mexico. Utilizing an integrated, multimodal approach, we provide capacity-oriented solutions centered on delivering customer value and industry-leading service. (source: company press release or website)

Why We Like It:
Shares of JBHT have been out performing its peers in the trucking sector and out performing the transportation sector at large. Now that crude oil could be poised to breakdown under the $100 level trucking stocks could get a lift even though reality might be different. The hurricanes in the gulf have shut down a large portion of the country's refinery capacity and fuel prices are surging across the nation. Yet Wall Street hasn't punished the trucking stocks yet. Instead the focus seems to be on the strength of the economy and oil prices. JBHT's pattern of higher lows is bullish and technicals indicators have turned positive again. We're suggesting readers buy the stock now with a stop loss at $35.49, just under last Wednesday's lows. Our first target will be $39.95. Our second target is $42.50.

Picked on September 14 at $37.94
Change since picked: + 0.00
Earnings Date 10/13/08 (unconfirmed)
Average Daily Volume: 2.6 million

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Kellogg - K - close: 56.21 change: +0.35 stop: 54.89

Company Description:
With 2007 sales of nearly $12 billion, Kellogg Company is the world's leading producer of cereal and a leading producer of convenience foods, including cookies, crackers, toaster pastries, cereal bars, frozen waffles and meat alternatives. (source: company press release or website)

Why We Like It:
Kellogg is another stock that might be considered a "safe haven" play and at this point shares also look like a relative strength play. The stock has been seriously out performing the markets and traders continue to buy the dips. Shares are now challenging their all-time highs near $56.90 from September 2007. We're going to suggest readers jump in right now but more conservative traders will want to consider waiting for a new high over $57.00. Our biggest challenge with K is that the stock just doesn't move very fast. Our target is $59.95.

Picked on September 14 at $56.21
Change since picked: + 0.00
Earnings Date 10/29/08 (unconfirmed)
Average Daily Volume: 2.1 million
 

New Short Plays

Axis Capital - AXS - close: 32.00 change: -0.22 stop: 33.01

Company Description:
AXIS Capital is a Bermuda-based global provider of specialty lines insurance and treaty reinsurance with shareholders equity at June 30, 2008 of USD 5.3 billion and locations in Bermuda, the United States, Europe, Singapore and Australia. (source: company press release or website)

Why We Like It:
The insurance sector is sliding lower and concerns over titans in the industry like AIG don't help investor confidence. The IUX insurance index looks ready to breakdown under the 240 level and challenge its summer lows. AXS is already beginning to breakdown from its recent trading range. Shares of AXS slipped to their 50-dma and bounced on Friday but the bounce has already failed. We're suggesting a trigger at $31.40, just under Friday's low, as an entry point for bearish positions. Our target is $28.50.

Picked on September xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 11/13/08 (unconfirmed)
Average Daily Volume: 923 thousand

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Endurance Specialty - ENH - cls: 31.55 chg: -0.63 stop: 32.55

Company Description:
Endurance Specialty Holdings Ltd. is a global specialty provider of property and casualty insurance and reinsurance. Through its operating subsidiaries, Endurance writes property, casualty, healthcare liability, agriculture, workers' compensation, professional lines of insurance and property, catastrophe, casualty, agriculture, marine, aerospace, and surety and other specialty lines of reinsurance. (source: company press release or website)

Why We Like It:
ENH is another insurance name that looks poised to crash lower. I was unable to tell if the company does a lot of property insurance along the coast of the Gulf of Mexico but the damage wrought by the recent hurricanes could pose a heavy toll for a lot of the insurers. ENH has recently produced a bull trap pattern with the temporary spike over resistance near $34.00. Now shares are breaking down under the bottom of its trading range. The simple 50-dma at $31.20 might offer short-term support. We're suggesting a trigger for bearish positions at $30.99. If triggered our target is the $28.00 level. We'll list a second target at $26.50.

Picked on September xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/30/08 (unconfirmed)
Average Daily Volume: 589 thousand
 

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