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Daily Newsletter, Monday, 03/21/2005

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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
TOA SMMX

New Long Plays

Technical Olympic - TOA - cls: 29.68 chg: +0.63 stop: 28.95

Company Description:
TOUSA is a leading homebuilder in the United States, operating in 15 metropolitan markets located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA designs, builds, and markets high- quality detached single-family residences, town homes, and condominiums to a diverse group of homebuyers, such as "first-time" homebuyers, "move-up" homebuyers, homebuyers who are relocating to a new city or state, buyers of second or vacation homes, active-adult homebuyers, and homebuyers with grown children who want a smaller home ("empty-nesters"). It also provides financial services to its homebuyers and to others through its subsidiaries, Preferred Home Mortgage Company and Universal Land Title, Inc. (source: company press release)

Why We Like It:
TOA is a homebuilder that is ignoring some of the recent weakness in the homebuilding sector. We like how the stock is in a classic rising channel with volume rising on the current bounce from the bottom edge of the channel. The company recently announced a 5-for-4 stock split due April 1st. The upcoming split, while not a big one, should also keep the bullish trend alive. However, we're a little cautious given the weakness in the broader market so we want to use a TRIGGER over what could be round-number resistance at the $30.00 level. Our entry point to go long will be $30.05. Our short-term target is the $32.00 level but technical traders could aim for the $33 mark, which should be closer to the top of the channel.

Picked on March xx at $xx.xx <- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/16/05 (confirmed)
Average Daily Volume: 135 thousand
 

New Short Plays

Symyx Tech. - SMMX - close: 23.79 chg: -0.65 stop: 26.01

Company Description:
Symyx develops and applies high-throughput experimentation methods, instrumentation and software to enable accelerated discovery of proprietary materials and processes in the chemical, petrochemical, pharmaceutical, electronics, consumer goods, and automotive industries. Symyx offers these proprietary technologies to customers seeking to transform their research productivity through research collaborations, Discovery Tools sales, and the license of materials, intellectual property, and software. (source: company press release)

Why We Like It:
SMMX is breaking down. The stock tried to build a base above the $24.00 level and its 200-dma for a couple of months but the late February rally failed near $29. Now shares are breaking support and the P&F chart's sell signal points to an $18.00 target. We are only targeting a move to the $20.00 level, which is likely to be round-number, psychological support. We expect the trip to take a good six to eight weeks with potential support at $22.00 along the way.

Picked on March 21 at $23.79
Change since picked: - 0.00
Earnings Date 02/03/05 (confirmed)
Average Daily Volume: 173 thousand

Play Updates

Updates On Latest Picks

Long Play Updates

Cox Radio - CXR - close: 16.60 chg: +0.00 stop: 15.99

No change from previous update.

Picked on March 01 at $16.53
Change since picked: + 0.07
Earnings Date 02/23/05 (confirmed)
Average Daily Volume: 334 thousand

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Syneron Medical - ELOS - close: 33.75 chg: +1.79 stop: 29.49

The good news in ELOS today is that the stock was highlighted by two analyst firms today. One upgraded ELOS to an "out perform" while the other started coverage with a "buy" rating. Plus, we noticed that the 8 million share secondary offering that we mentioned previously was actually a sale of stock formerly held by company insiders - not new shares that would dilute current shareholder investment. Shares of ELOS added 5.6 percent on the broker comments with volume coming in about three times the average. The bad news today is that ELOS gapped open at $33.65, which was well above our planned entry point at $32.55. We have adjusted our entry but patient traders may want to watch for a pull back. We would suggest buying a bounce in the $32.50 range. Our short-term target remains in the $37.00-38.00 region.

Picked on March 21 at $33.65
Change since picked: + 0.10
Earnings Date 05/09/05 (unconfirmed)
Average Daily Volume: 329 thousand

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Valassis Comm. - VCI - close: 36.06 chg: +0.65 stop: 34.75

We have good news here too. Traders bought the dip to VCI's simple 50-dma this morning and the stock climbed throughout the rest of the session to close back above the $36.00 level. The whole move produced a bullish engulfing candlestick pattern, which is typically a bullish reversal. Readers can use today's bounce as a new entry point.

Picked on February 23 at $36.12
Gain since picked: - 0.06
Earnings Date 02/22/05 (confirmed)
Average Daily Volume: 337 thousand
 

Short Play Updates

Anheuser Busch - BUD - close: 47.47 chg: -0.13 stop: 50.11

No change from previous update.

Picked on February 7 at $48.32
Gain since picked: - 0.85
Earnings Date 02/02/05 (confirmed)
Average Daily Volume: 2.4 million

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Countrywide Financial - CFC - close: 32.40 chg: -0.23 stop: 35.01

No change from previous update.

Picked on March 09 at $33.36
Change since picked: - 0.86
Earnings Date 02/02/05 (confirmed)
Average Daily Volume: 3.8 million

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Flextronics - FLEX - close: 12.29 chg: +0.06 stop: 13.01

No change from previous update.

Picked on March 16 at $11.95
Change since picked: + 0.36
Earnings Date 04/28/05 (unconfirmed)
Average Daily Volume: 5.5 million

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Nabi Biopharma - NABI - close: 12.23 chg: -0.03 stop: 13.11

No change from previous update.

Picked on March 06 at $11.80
Change since picked: + 0.43
Earnings Date 02/15/05 (confirmed)
Average Daily Volume: 436 thousand

---

NY Times - NYT - close: 36.03 chg: -0.17 stop: 37.35

No change from previous update.

Picked on February 20 at $37.20
Gain since picked: - 1.17
Earnings Date 01/25/05 (confirmed)
Average Daily Volume: 516 thousand

---

ScanSource - SCSC - close: 57.13 chg: +0.09 stop: 60.51

No change from previous update.

Picked on March 13 at $ 57.58
Change since picked: - 0.45
Earnings Date 04/28/05 (unconfirmed)
Average Daily Volume = 95 thousand

---

United Industrial Crp. - UIC - cls: 28.52 chg: -0.63 stop: 31.51

No change from previous update.

Picked on March 17 at $29.23
Change since picked: - 0.71
Earnings Date 03/16/05 (confirmed)
Average Daily Volume: 181 thousand

---

West Marine - WMAR - close: 21.01 chg: -0.04 stop: 23.11

No change from previous update.

Picked on March 17 at $21.20
Change since picked: - 0.15
Earnings Date 03/03/05 (confirmed)
Average Daily Volume: 155 thousand
 

Closed Long Plays

None today.
 

Closed Short Plays

None today.

Today's Newsletter Notes: Market Wrap by Jonathan Levinson and all other plays and content by the Option Investor staff.

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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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