NEW BULLISH Plays

TD Ameritrade - AMTD - close 16.42 change +0.09 stop 15.68

Company Description:
TD Ameritrade Holding Corporation (TD AMERITRADE) is a provider of securities brokerage services, and technology-based financial services to retail investors and business partners. The Company provides securities brokerage services, including trade execution, clearing services and margin lending. The Company provides trustee, custodial and other trust-related services to retirement plans and other custodial accounts. The Company provides a suite of investor education products and services. The Company also provides cash sweep products through third-party banking relationships. The Company provides its services through the Internet, a national branch network and relationships with registered investment advisors (RIAs). The Company's subsidiary TD AMERITRADE Clearing, Inc. (TDA Clearing) provides clearing and execution services. On June 11, 2009, the Company completed the acquisition of thinkorswim Group Inc.

Target(s): 17.40, 17.90, 18.20
Key Support/Resistance Areas: 16.40, 17.50, 17.90, 18.40
Time Frame: 1 to 2 weeks

Why We Like It:
AMTD has come into an interesting support area in the $16.00 to $16.50 area dating back to January 2008 (see the weekly chart below). I believe the stock is poised to bounce from here. We're not looking to hit a home run here but simply catch a move up towards the stock's daily 20 and possibly 50-SMA's (see a daily chart). A $1 move will give us a +6% gain. Fundamentally, AMTD trades at a lower P/E ratio than many of its online brokerage peers. This is a countertrend trade at a key support level on a good company with strong fundamentals. Our stop will be $15.68.

Suggested Position: Long AMTD stock at current levels

Options Traders:
Suggested Position: August $15.00 CALLS, current ask $1.90

Annotated Weekly Chart:

Entry on June xx
Earnings Date 7/20/10 (unconfirmed)
Average Daily Volume: 5.1 million
Listed on June 26, 2010


NEW BEARISH Plays

Grand Canyon Education - LOPE - close 23.50 change -0.22 stop 25.68

Company Description:
Grand Canyon Education, Inc. is a provider of online postsecondary education services focused on offering graduate and undergraduate degree programs in its core disciplines of education, business, and healthcare. In addition to its online programs, the Company offers ground programs at its traditional campus in Phoenix, Arizona and onsite at the facilities of employers. It primarily focuses on recruiting and educating working adults, whom it defines as students age 25 or older who are pursuing a degree while employed. As of December 31, 2009, approximately 91.3% of its online students were age 25 or older. It offers the degrees of Doctorate of Education, Master of Arts, Master of Education, Master of Business Administration, Master of Science, Bachelor of Arts, and Bachelor of Science and a variety of programs leading to each of these degrees.

Target(s): 21.80, 20.80, 20.05
Key Support/Resistance Areas: 25.00, 24.25, 23.00, 21.50, 20.00
Time Frame: 1 to 2 weeks

Why We Like It:
Education stocks have come under political fire recently and are now being probed by pundits in Washington. There was a hearing on Thursday afternoon in which Senators criticized for-profit universities. This uncertainty has put pressure on many stocks in the sector and I believe it is far from over. According to Chronicles of Higher Education reporter Marc Perry, who observed the hearing, he had this say: At the conclusion of hearings about the for-profit education sector, Senator Tom Harkin said he doesn't think that any "reasonably objective" observer can say that nothing is wrong with the sector, and added that hearings about the sector will continue next month. One unnamed senator kept repeating the word "scam" during the hearing. Senator Al Franken, a Minnesota Democrat, repeatedly said that he wants "to shut the for-profit universities down," and asked one witness "What kind of laws do we need to pass to shut'em down?" This is not good for the sector. LOPE has made a series of lower highs and lower lows and I see no reason why this stock will not trade down to its 200-day SMA (currently $21.41). Our first target is $21.80 and I have provided two more aggressive targets should the selling intensify. LOPE has two primary downtrend lines overhead along with its 20-day, 200-day, and 100-day SMA's all turning lower. This should provide plenty of resistance and keep any bounces in check. Our initial stop will be $25.68 to account for short term volatility. NOTE: This sector is volatile and I suggest small position size to manage risk. This is also a highly contentious sector and is being driven by news. There are three employment reports this week and if any of them are better than expected it could negatively affect the short term direction of education stocks, which will be good for our position. If the reports turn out to be worse than expected LOPE may be positively affected. But I believe there is enough resistance overhead to keep bounces in check.

Suggested Position: Short LOPE stock at current levels

Option Traders: Buy August $25.00 PUTS, current ask $2.60

Annotated chart:

Entry on June xx
Earnings 8/3/2010 (unconfirmed)
Average Daily Volume: 429,000
Listed on June 26, 2010


Avon Products - AVP - close 27.49 change +0.04 stop 29.65

Company Description:
Avon Products, Inc. (Avon) is a global manufacturer and marketer of beauty and related products. Its products fall into three product categories: Beauty, Fashion and Home. Beauty consists of color cosmetics, fragrances, skin care and personal care. Fashion consists of fashion jewelry, watches, apparel, footwear and accessories. Home consists of gift and decorative products, house wares, entertainment and leisure products, and children’s and nutritional products. Sales from Health and Wellness products and mark., a global cosmetics brand that focuses on the market for young women, are included among these three categories based on product type. Avon primarily sells its products to the consumers through the direct-selling channel. It has operations in six regions: Latin America; North America; Central & Eastern Europe; Western Europe, Middle East & Africa; Asia Pacific, and China. In March 2010, the Company acquired Liz Earle Beauty Co. Limited.

Target(s): 25.80, 25.25, 24.25
Key Support/Resistance Areas: 29.50, 29.00, 27.50, 25.75, 25.00
Time Frame: Several weeks

Why We Like It:
AVP ran into prior support and its 50-day SMA this past week and is now turning lower. The stock made a lower high and I believe it is due to make a lower low, or at least retest its recent lows near $25.00. If we simply catch a portion of this move we will have a nice profitable trade. Our primary target is $25.25 but I have also listed $25.80 as a target which is an area to consider tightening stops or taking profits. If the selling picks up AVP could go all the way down to the $24.00 area which was a prior support/resistance level from 10/08 and 5/09. Our stop is $29.65 and our time frame is several weeks.

Suggested Position: Short AVP stock at current levels

Option Traders: Buy August $27.00 PUTS current ask $1.45

Annotated chart:

Entry on June xx
Earnings 7/29/2010 (unconfirmed)
Average Daily Volume: 4.2 million
Listed on June 26, 2010