Option Investor
New Plays

Five new plays and a watch list

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Play Editor's Note: We're adding five new bullish candidates to the newsletter tonight but there were several more that looked tempting. Here are a few stocks for your watch list:

ADSK - The action in ADSK looks bullish. I would be tempted to buy Friday's bounce with a stop loss under $17.30. Maybe a quick target at $20.00 and a secondary target near $22.00. The P&F chart points to $29.

ALTR - Friday's bullish engulfing candlestick looks good but ALTR has resistance near $15.70 and the 50-dma is near $16.00. Watch it for a breakout. ALTR appears to have produced a bullish double bottom.

DXO - This is the double-long ETF on crude oil. Naturally it's been crushed over the last six months. The volume on it this past week might be suggesting that oil has found a bottom. Aggressive traders may want to speculate on bullish plays here.

GRMN - I think GRMN is going to have a lot of competition going forward so I have a fundamental bearish bias against the stock. Yet short-term shares have turned almost bullish. A move over $20.50 might be a new short-term entry point for long positions.

PBG - This past week was bullish for PBG. Shares have developed a positive trend of higher lows. I would be tempted to buy it here with a stop loss under Friday's low. Use $20.00 as your first target. The $22.00 level is probably a good secondary target.

VRSN - This tech stock also looks bullish with a breakout over its 50-dma. I might be tempted to buy it here with a stop loss under $20.00. More conservative traders will want to wait for a rise over $22.00 before initiating positions. Target $25.00 or its 100-dma.


NEW BULLISH Plays

Advent Software - ADVS - close: 24.32 change: +0.83 stop: 22.45

Why We Like It:
It looks like shares of ADVS have finally put in a bottom with the low in October and November. This past week saw the stock breakout over the top of its trading range and the simple 50-dma. Our biggest complaint is the lack of volume on the move but we are only two weeks away from Christmas and trading tends to slow down. Friday's session produced a bullish engulfing candlestick pattern and ADVS is poised to make a run at new relative highs. The Point & Figure chart looks very bullish with a $33 target. Meanwhile ADVS is also a candidate for a short squeeze. The most recent data listed short interest at more than 18% of the very small 26.5 million-share float.

We are suggesting readers buy ADVS with a stop loss under Friday's low. Our first target is $27.00. Our second target is $29.85.

Annotated chart:
ADVS

Picked on December 13 at $24.32 
Change since picked:     + 0.00   			
Earnings Date          02/05/09 (unconfirmed)    
Average Daily Volume:       330 thousand    


Hansen Natural - HANS - close: 29.27 change: +1.17 stop: 27.49

Why We Like It:
HANS has been consolidating under resistance at $30.00 and its 200-dma for three weeks now. The stock has a bullish trend of higher lows suggesting the next move is going to be a breakout higher. If HANS does breakout it could see a huge move. The stock has a high amount of short interest around 18.8% of the float. Nimble traders could try buying another dip near $28.00. We are suggesting readers wait for a breakout over resistance at $30.00. Our entry point to buy the stock will be $30.25. If triggered our target is $34.90. We are going to list a secondary target at $37.50 but strongly suggest readers take most of their money off the table at $34.90. The Point & Figure chart looks very bullish (see below) with a $45 target.

Annotated chart:
HANS

Picked on December xx at $xx.xx <-- see TRIGGER  
Change since picked:     + 0.00   			
Earnings Date          02/26/09 (unconfirmed)    
Average Daily Volume:       1.8 million     


Juniper Networks - JNPR - close: 17.46 change: +0.33 stop: 16.49

Why We Like It:
Networking stock JNPR is making progress. The stock has broken out over several levels of resistance and traders continue to buy the dips. Friday's session delivered a bullish engulfing candlestick in what looks like the end of a bull-flag consolidation pattern. We're suggesting readers buy JNPR here with a stop loss under Friday's low. Our target is $19.85. FYI: The P&F chart is bullish with a $26 target.

Annotated chart:
JNPR

Picked on December 13 at $17.46 
Change since picked:     + 0.00   			
Earnings Date          01/22/09 (unconfirmed)    
Average Daily Volume:      10.1 million     


Lam Research - LRCX - close: 23.02 change: +2.15 stop: 20.49

Why We Like It:
The semiconductors were some of the best performers last week in spite of news that revenues for the industry will be down. Shares of LRCX have been showing a lot of relative strength and really delivered on Friday with a 10% gain. Aggressive traders may want to jump in now. We don't want to chase it. Our plan is to buy a dip into the $22.25-21.75 zone with a stop loss under Friday's low. If triggered we're listing a target at $24.90. More aggressive traders may want to aim higher. The P&F chart is bullish with a $33 target.

Annotated chart:
LRCX

Picked on December xx at $xx.xx <-- see TRIGGER  
Change since picked:     + 0.00   			
Earnings Date          01/21/09 (unconfirmed)    
Average Daily Volume:       3.1 million     


N.Amer.Palladium - PAL - close: 1.54 change: +0.10 stop: 1.25

Why We Like It:
You may not be familiar with PAL. Here's an excerpt about the company: North American Palladium is a Canadian mining company that produces palladium, platinum, nickel, copper and gold from its 100% owned Lac des Iles Mine located in Thunder Bay, Ontario. Commodity stocks have been crushed this year with the global recession news and the rising U.S. dollar. That may be changing. PAL has been building a bottom along the $1.00 level for several weeks. This past week saw a strong rally in commodity-related stocks as the U.S. dollar tumbled. The move produced a bullish breakout buy signal in PAL. Now the stock can be volatile so we are listing it as a high-risk, more aggressive play. Traders need to be remain defensive. Just because the stock is cheap, don't take too big of a position. We are suggesting bullish positions now with a stop loss under Friday's low. Our target is $3.00.

Annotated chart:
PAL

Picked on December 13 at $ 1.54 
Change since picked:     + 0.00   			
Earnings Date          11/08/08 (confirmed)    
Average Daily Volume:       593 thousand    


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