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HOV None

Play Editor's Note: As of this evening the deal making in Washington has failed to reach a consensus so there is no agreement yet on how to implement the government's bail-out plan. We're getting a lot of rhetoric from both sides of the aisle. Some argue that lawmakers need more time to "get it right the first time" before Congress takes a recess ahead of the elections. News that no agreement has been reached could push stocks, especially financials, lower tomorrow. Most tend to believe that some sort of agreement will be reached by Monday. Please note that I am adding a couple of bullish candidates to the watch list but the best plan is probably not trading in this market.

A few stocks I'm watching...

XLF: Nimble traders might want to try and short this under $20.00.

MNST: A new move under $16.00 might be a bearish entry point.

LAMR: This stock looks like a bearish candidate again.

WFMI: I mentioned that WFMI might be a bullish candidate a few days ago. Today's bounce over $20.00 and its 50-dma looks like a possible entry point.

TSO: This oil refiner is challenging resistance near $20.00 and its 100-dma. Aggressive traders might want to use a move over $20.25 as a bullish entry point.

New Long Plays

Hovnanian - HOV - close: 8.67 change: +0.54 stop: 7.80

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:
We are going to take another swing at HOV. The homebuilders are recovering and the group posted a 4% gain in spite of negative new home sales figures out this morning. Hope that a rescue package will eventually get done, which will take "bad" loans off the banking system's books, which in turn will allow banks to start lending again, which is good news for homebuilders. HOV rallied back above its 200-dma after bouncing from its 10-dma. We're suggesting a stop loss under Wednesday's low (7.85). We have two targets. Our first target is $9.95. Our second target is $11.25. The homebuilders have been a volatile group. Readers should consider this an aggressive play.

Picked on September 25 at $ 8.67
Change since picked: + 0.00
Earnings Date 12/18/08 (unconfirmed)
Average Daily Volume: 3.7 million


Wal-Mart Stores - WMT - cls: 60.12 change: +1.20 stop: 57.99

Company Description:
Wal-Mart Stores, Inc. operates Wal-Mart discount stores, supercenters, Neighborhood Markets and Sam's Club locations in the United States. The Company operates in Argentina, Brazil, Canada, China, Costa Rica, El Salvador, Guatemala, Honduras, Japan, Mexico, Nicaragua, Puerto Rico and the United Kingdom and, through a joint venture, in India. (source: company press release or website)

Why We Like It:
In a crazy market like this one investors are going to gravitate toward "safe haven" plays like WMT. Shares were trading near multi-year highs a few days ago. The last couple of days has seen investors buy the dip near tested, technical support at its rising 100-dma. We see today's close over $60.00 as a new bullish entry point. We're suggesting a stop loss under yesterday's low. Our first target is $63.25. Our second target is $64.90. WMT is not going to be a very fast moving stock but it should be a little less volatile than the rest of the market.

Picked on September 25 at $60.12
Change since picked: + 0.00
Earnings Date 11/13/08 (unconfirmed)
Average Daily Volume: 21.8 million

New Short Plays

None today.

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