Option Investor

Daily Newsletter, Wednesday, 02/09/2005

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Table of Contents

  1. Market Wrap
  2. New Plays
  3. In Play Updates and Reviews

Market Wrap

New Plays

Most Recent Plays

New Plays
Long Plays
Short Plays

New Long Plays

None Today.

New Short Plays

Infocrossing - IFOX - close: 18.39 chg: -0.87 stop: 19.51

Company Description:
Infocrossing, Inc. is a provider of selective IT outsourcing services, delivering the computing platforms and proprietary systems that enable companies, regardless of industry, to process data and share information within their business, and between their customers, suppliers and distribution channels. Leading companies leverage Infocrossing's robust computing infrastructure, skilled technical team, and process-driven operations to reduce costs and improve service delivery by outsourcing the operation of mainframes, mid-range, open system servers, networks and business processes to Infocrossing. (source: company press release)

Why We Like It:
Tech services stock IFOX has been climbing since its August low in a very wide and volatile channel. IFOX just failed at the top of this channel with a bearish engulfing candlestick pattern. The candlestick pattern is normally a reversal pattern and when combined at the top of a trend with overhead resistance it makes a very compelling entry point for shorts. Technicals are also rolling over and its MACD is suggesting a new sell signal soon from overbought levels. We want to short IFOX here and target a drop to the $16.00 mark and/or the bottom of its channel depending on how fast it declines.

Annotated Chart:

Picked on February 09 at $18.39
Change since picked: - 0.00
Earnings Date 03/14/05 (unconfirmed)
Average Daily Volume: 277 thousand

Play Updates

Updates On Latest Picks

Long Play Updates

Encore Acquisition - EAC - close: 39.10 change: +0.20 stop: 37.75*new*

Heads up! EAC dipped toward the $38.00 level this morning but traders bought that dip and sent the stock to a new high of $39.93 this afternoon. Unfortunately, that's not quite good enough to hit our target at the $40.00 mark. However, given the market environment readers may want to strongly consider exiting here for a profit. We are going to raise our stop loss to $37.75.

Picked on January 27 at $36.10
Change since picked: + 3.00
Earnings Date 02/15/05 (unconfirmed)
Average Daily Volume: 173 thousand

Frontier Oil - FTO - close: 28.43 change: -0.48 stop: 27.75

FTO is also pulling back as the markets slip lower. Today's breakdown under the simple 10-dma might be a good warning for our readers to do their own profit taking. Technicals have turned bearish!

Picked on January 27 at $27.05
Change since picked: + 1.38
Earnings Date 02/17/05 (unconfirmed)
Average Daily Volume: 212 thousand

Short Play Updates

None today.

Closed Long Plays

None today.

Closed Short Plays

None today.

Watch List


Body goes here

Today's Newsletter Notes: Market Wrap by Linda Piazza, and all other plays and content by the Option Investor staff.


Option Investor Inc is neither a registered Investment Advisor nor a Broker/Dealer. Readers are advised that all information is issued solely for informational purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy, nor is it to be construed as a recommendation to buy, hold or sell (short or otherwise) any security. All opinions, analyses and information included herein are based on sources believed to be reliable and written in good faith, but no representation or warranty of any kind, expressed or implied, is made including but not limited to any representation or warranty concerning accuracy, completeness, correctness, timeliness or appropriateness. In addition, we do not necessarily update such opinions, analysis or information. Owners, employees and writers may have long or short positions in the securities that are discussed.

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