Editor's Note:
Good evening. The market is at a tough spot here and I believe it could go either way. I'm leaning towards a bounce back up into SPX 1,110. Tonight's new plays should exploit the moves and I believe they have some potential. Please email me with any questions.


NEW BULLISH Plays

Athenahealth, Inc. - ATHN - close 29.46 change +0.60 stop 25.50

Company Description:
Athenahealth is a leading provider of internet-based business services for physician practices. The Company's service offerings are based on proprietary web-native practice management, electronic health record (EHR) software, a continuously updated payer knowledge-base and integrated back-office service operations.

Target(s): 31.50, 34.00
Key Support/Resistance Areas: 34.25, 31.75, 30.00, 28.25, 25.75
Time Frame: 1 to 2 weeks

Why We Like It:
ATHN is in the business of automating health care records and billing. I like ATHN as a long defensive play that should thrive as healthcare regulation takes form. Technically ATHN had a huge gap down after they missed earnings estimates in late April. Since then the stock has formed a nice cup and handle pattern which signals the "changing of the guard" from sellers to buyers. The company reported earnings in late July that beat estimates and the stock is now gaining momentum. On Friday, ATHN closed right on a downward trend line from January but I think it is only a matter of time before this is broken, which is typical of a cup and handle formation. Ideally, I suggest traders initiate long positions on any weakness, but a break out is another strategy. Let's use $28.50 as a trigger on weakness and $30.25 as a trigger on strength. ATHN has a big gap to fill all the way up near $34.00 which is our most aggressive target. Our near term target is $31.50. Our initial stop is $25.50 which is below its upward trend line and the rising 20-day SMA.

Suggested Position: Long ATHN stock

Options Traders: Buy September $31.00 Calls, current ask $1.25

Annotated daily chart:

Entry on August xx
Earnings 10/28/2010 (unconfirmed)
Average Daily Volume: 767,000
Listed on August 14, 2010


Oceaneering International - OII - close 49.48 change -0.57 stop 46.60

Company Description:
Oceaneering International, Inc. is an oilfield provider of engineered services and products to the offshore oil and gas industry, with a focus on deepwater applications. Through the use of its applied technology, it also serves the defense and aerospace industries. Its business segments are contained within two businesses: services and products provided to the oil and gas industry (Oil and Gas) and all other services and products (Advanced Technologies). Its five business segments within the Oil and Gas business are Remotely Operated Vehicles (ROVs), Subsea Products, Subsea Projects, Inspection and Mobile Offshore Production Systems.

Target(s): 53.00, 54.40, 57.00
Key Support/Resistance Areas: 57.50, 54.50, 53.40, 49.00
Time Frame: 1 to 2 weeks

Why We Like It:
With the recent oil leak in the Gulf of Mexico the oil services industry is being turned upside down with regulations and drilling moratoriums. I think OII will benefit because the new rules in the gulf point to more underwater robotic contracts. And it just so happens that OII recently raised their guidance because of it. This past week's dip has come right into an upward trend line and a prior resistance level which should now act as support. This is a buying opportunity in OII. I suggest readers enter long positions now. Our stop is $46.60 which is below OII's recent swing low and its rising 50-day SMA. We have three realistic near term targets that will produce a winning nice trade if they are reached.

Suggested Position: Long OII stock at current levels

Buy September $50.00 CALL, current ask $2.35

Annotated chart:

Entry on August xx
Earnings 10/28/10 (unconfirmed)
Average Daily Volume: 807,000
Listed on August 14, 2010


NEW BEARISH Plays

Chesapeake Energy - CHK - close 20.78 change -0.26 stop 22.85

Company Description:
Chesapeake Energy Corporation is a producer of natural gas in the United States. It owns leading positions in the Barnett, Fayetteville, Haynesville, Marcellus and Bossier natural gas shale plays and in the Eagle Ford, Granite Wash and various other unconventional oil plays. The company has also vertically integrated its operations and owns substantial midstream, compression, drilling and oilfield service assets.

Target(s): 19.70, 18.80, 18.05
Key Support/Resistance Areas: 22.50, 21.60, 20.30, 19.65, 18.75, 18.00
Time Frame: 1 to 2 weeks

Comments:
CHK is a good company but it is facing significant headwinds. There is increasing pressure to ban drilling in the Marcellus shale. Pennsylvania is considering a year long moratorium so they can study fracturing problems and its impact on drinking water. If the process is halted in the Marcellus shale then it will probably be halted in the Haynesville and Barnett shale plays, which are the primary assets of CHK. Technically, CHK looks like it is about ready to lose it. The stock is trading in a wide downward channel and on Friday it closed below an upward trend line. It would be nice to short CHK on a bounce but I'm not sure it will happen. I suggest we initiate short positions now. Our most aggressive target right now is to test the July 2009 lows near $18.05. Our stop is $22.85 which is above the recent swing high and several moving averages.

Suggested Position: Short CHK stock at current levels

Options Traders: Buy October $20.00 PUTS, current ask $1.00

Annotated chart:

Entry on August xx
Earnings: 11/2/2010 (unconfirmed)
Average Daily Volume: 10 million
Listed on August 14, 2010