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New Plays

Insurance, Tech, and Internet

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Play Editor's Note: We are adding some new bullish plays to the newsletter but all of them should be considered aggressive, higher-risk trades. The market's bounce was encouraging but the prevailing trend is still down. These new positions below are speculative bets that the bounce (a.k.a. bear-market rally) really isn't over yet and just took a huge step back on Monday. If we are wrong I would expect to be stopped out very quickly.


NEW BULLISH Plays

CIGNA - CI - close: 11.99 change: +0.83 stop: 10.99

Why We Like It:
CI displayed some relative strength today. The market retraced toward its lows early afternoon but CI was working on a higher low. The stock is extremely oversold if the market can build on today's bounce then I would expect CI to continue to out perform. The stock can be very volatile as evidenced by its big swings in October. We are suggesting readers buy CI here with a stop loss at $10.99 since $11.00 was support on Monday. Our target is $14.50.

Annotated chart:
CI

Picked on December 02 at $11.99 
Change since picked:     + 0.00   			
Earnings Date          02/05/09 (unconfirmed)    
Average Daily Volume:       8.1 million     


Cognizant Tech. - CTSH - close: 18.03 change: +0.49 stop: 17.19

Why We Like It:
It looks like shares of CTSH produced a minor bullish double-bottom pattern with the two bounces near the $17.25 zone today. We're also seeing some bullish divergences between price and the stock's technical indicators. If this market can bounce higher I suspect that CTSH will be able to breakout past immediate resistance at its 50-dma near $18.85. This is an aggressive entry point but we're suggesting readers buy CTSH here with a stop loss immediately under today's low. Our target is the $20.85 mark.

Annotated chart:
CTSH

Picked on December 02 at $18.03 
Change since picked:     + 0.00   			
Earnings Date          02/05/09 (unconfirmed)    
Average Daily Volume:       6.2 million     


EBAY Inc. - EBAY - close: 13.26 change: +1.03 stop: 12.79

Why We Like It:
This is also an aggressive, higher-risk play. EBAY has been in a bearish trend for months and it could still see lower lows before the year is out. However, we are starting to see some hints that maybe the bounce that began last week isn't over yet. We're willing to speculate on the rebound continuing but we'll try to keep our risk at a minimum with a stop loss at $12.79, which is under today's afternoon low. Our short-term target is $14.95.

Annotated chart:
EBAY

Picked on December 02 at $13.26 
Change since picked:     + 0.00   			
Earnings Date          01/22/09 (unconfirmed)    
Average Daily Volume:        21 million     


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