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New Plays
Long Plays
Short Plays
GVA None
HOV  
IFF  
RYL  

Play Editor's Note: I want to remind readers that we remain in a bear market. We just experienced a bear-market rally, which is normally very sharp. Last week's rebound was extraordinarily fast and powerful due to government intervention and some government manipulation of the short-trading rules ahead of an options expiration weekend. It may have very well been a turning point for the market but we won't know that until it's a good distance back in our rear view mirror. I do expect the bounce to continue but after a 1,000 point rebound in the DJIA and a 9.8% bounce in the NASDAQ Composite it's time for a little profit taking. I'm adding some bullish candidates but we are looking for a dip first! FYI: Keep an eye on WFMI and TSO. They might be bullish candidates. Look for a dip toward $20 for WFMI and a breakout over $20 for TSO. Plus, readers might want to speculate on WM, which is a takeover target.


New Long Plays

Granite Construction - GVA - cls: 41.12 chg: +2.24 stop: 37.85

Company Description:
Granite Construction Incorporated is a member of the S&P 400 Midcap Index, the Domini 400 Social Index and the Russell 2000. Granite Construction Company, a wholly owned subsidiary, is one of the nation's largest diversified heavy civil contractors and construction materials producers. Granite Construction Company serves public and private sector clients through its offices and subsidiaries nationwide. (source: company press release or website)

Why We Like It:
GVA has spent months consolidating sideways under the $40.00 level. Friday's market rally was strong enough to power the stock through significant resistance. This broken resistance should now be support. We are suggesting readers buy a dip in the $40.15-39.00 zone. If triggered our target is the $44.85-45.00 range. If you consider the length of GVA's base it just finished building in the $30-40 zone the stock could be setting up for a much larger rally higher. Aggressive traders could aim for the $50 region. The Point & Figure chart is forecasting a $59 target.

Picked on September xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/29/08 (unconfirmed)
Average Daily Volume: 744 thousand

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Hovnanian - HOV - close: 9.05 change: +0.52 stop: 7.85

Company Description:
Hovnanian Enterprises, Inc., founded in 1959 by Kevork S. Hovnanian, Chairman, is headquartered in Red Bank, New Jersey. The Company is one of the nation's largest homebuilders. (source: company press release or website)

Why We Like It:
Housing stocks leaped higher last week as investors turned hopeful that a solution to the credit crisis might rub off on the housing market and mortgage rates. If we can stem the flow of bad news out of Wall Street consumers might feel more confident and go ahead with plans to buy a home. Plus, new rules about naked short selling is good news for the homebuilders, which are some of the most shorted stocks in the market. HOV broke through resistance near $8.00, resistance at its simple 200-dma, resistance at its exponential 200-dma and the $9.00 mark. I suspect that if the market dips this week HOV could return to the $8.50 region before bouncing again. We're suggesting readers buy HOV on a dip in the $8.55-8.00 zone. We have two targets. Our first target is $9.99. Our second target is $11.50. Trades should be aware that there is a big homebuilding conference this week and comments coming out of this conference could move the sector. FYI: The latest data listed short interest at 49% of HOV's 51.4 million-share float. This definitely makes it susceptible to a short squeeze.

Picked on September xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 12/18/08 (unconfirmed)
Average Daily Volume: 3.7 million

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Intl. Flavor & Fragrance - IFF - cls: 44.47 chg: +1.44 stop: 41.75

Company Description:
IFF is a leading global creator of flavors and fragrances used in a wide variety of consumer products and packaged goods. Consumers experience these unique scents and tastes in fine fragrances and beauty care, detergents and household goods, as well as beverages, confectionary and food products. (source: company press release or website)

Why We Like It:
IFF just broke out from a five-month trading range and rallied past technical resistance at its 200-dma. We're expecting the market to pull back a bit this week so look for IFF to retest broken resistance at support. Our suggested entry point to buy IFF is the $43.25-43.00 zone. If triggered our target is $46.85. The Point & Figure chart is bullish with a $60 target.

Picked on September xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/30/08 (unconfirmed)
Average Daily Volume: 693 thousand

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Ryland Group - RYL - cls: 29.00 change: +2.80 stop: 25.95

Company Description:
With headquarters in Southern California, Ryland is one of the nations largest homebuilders and a leading mortgage-finance company. (source: company press release or website)

Why We Like It:
RYL is another homebuilder that is soaring higher on hopes that the government's plan to calm Wall Street will improve consumer confidence and lift the housing sector. The stock just broke through resistance at its 200-dma near resistance around $27.00. We are suggesting that readers buy a dip in the $27.25-26.50 range. If triggered we're setting two targets. Our first target is $29.95. Our second target is $32.00. The Point & Figure chart is bullish with a $43 target. FYI: The most recent data listed short interest at 32% of the 42.6 million-share float. Note: RYL may not be presenting at the homebuilding conference this week but comments from its competitors could definitely influence trading in the homebuilding stocks this week.

Picked on September xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/22/08 (unconfirmed)
Average Daily Volume: 2.5 million
 

New Short Plays

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