Option Investor

Daily Newsletter, Wednesday, 07/26/2006

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Table of Contents

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

Market Wrap

Market Wrap

New Plays

Most Recent Plays

New Plays
Long Plays
Short Plays
None None

New Long Plays

None today.

New Short Plays

None today.

Play Updates

Updates On Latest Picks

Long Play Updates

Carnival Corp. - CCL - close: 40.01 chg: -0.75 stop: 39.75

Be careful! CCL's reversal today (-1.8%) is a big vote of no confidence in yesterday's bullish breakout. The stock might still bounce from the $40 level but if the markets see any weakness tomorrow we would expect to be stopped out at $39.75.

Picked on July 25 at $40.76
Change since picked: - 0.75
Earnings Date 09/15/06 (unconfirmed)
Average Daily Volume: 4.3 million


St. Jude Medical - STJ - close: 36.38 change: +0.44 stop: 32.99

STJ continues to show relative strength. Yesterday we said that a dip into the $35.40-35.00 range would be an attractive entry point. This morning STJ provided us a pull back to $35.11 before rebounding and closing with a 1.2% gain. Volume came in above average, which is bullish. The next hurdle is potential resistance at its simple 100-dma near $37. Our target is the $39.00-40.00 range. Our time frame is about four to six weeks.

Picked on July 25 at $35.94
Change since picked: + 0.44
Earnings Date 07/19/06 (confirmed)
Average Daily Volume: 3.8 million

Short Play Updates

Phazar Corp. - ANTP - close: 8.72 change: -0.04 stop: 9.27

There is no change from our previous updates on ANTP. We remain on the sidelines. Our trigger to short the stock is at $8.49. If triggered our target will be the $7.00-6.75 range. We want to remind readers that this is an aggressive play. ANTP can be volatile and the most recent data puts short interest at over 10% of the 2.1 million-share float. That's a relatively high degree of shorts and a very, very small float. To make this play even higher risk we cannot find the company's next earnings report. Last year they reported in August so it stands to reason that they might report again in early August (we're guessing between 8/04-8/11).

Picked on July xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 08/04/06 (unconfirmed)
Average Daily Volume: 89 thousand


Cascade - CAE - close: 37.31 change: -0.59 stop: 36.76

We do not see any changes from yesterday's update on CAE although more aggressive traders might want to consider shorts on a decline under $36.50. We are going to keep CAE on the play list for now but if shares close over $38.50 we're dropping it as a bearish candidate. Our plan is to use a trigger at $34.90 to catch any breakdown under support in the $35 region. If triggered our target is the $31.50-31.00 range. The Point & Figure chart is more bearish with a $22.00 target. We do not want to hold over its earnings report in September.

Picked on July xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 09/07/06 (unconfirmed)
Average Daily Volume: 87 thousand


Juniper Networks - JNPR - cls: 13.40 chg: -0.30 stop: 14.61*new*

JNPR continues to show relative weakness. The stock lost another 2.1% and is closing near new three-year lows. If the major averages are weak tomorrow we would consider new short positions. We are going to adjust our stop loss to $14.61. Our target is the $12.00-10.00 range. Conservative traders can exit near $12 with us and more aggressive traders can aim lower. The P&F chart is still very bearish with an $8.50 target.

Picked on July 21 at $13.75
Change since picked: - 0.35
Earnings Date 07/19/06 (confirmed)
Average Daily Volume: 13.1 million


Maxim Integrated - MXIM - close: 28.38 chg: -0.24 stop: 30.01

There are no changes from our previous updates on MXIM. The stock tried to bounce again but it failed under the $29.00 level. Short-term technicals are starting to turn bearish again but its MACD on the daily chart is nearing a new buy signal. We are not suggesting new plays at this time. More conservative traders may want to exit early or tighten their stops toward $29.50 or even the $29 region. The longer-term trend in the SOX and in MXIM remains bearish.

Picked on July 09 at $29.75
Change since picked: - 1.37
Earnings Date 08/04/06 (confirmed)
Average Daily Volume: 5.5 million


Meridian Biosci. - VIVO - close: 20.86 chg: -0.15 stop: 23.05

VIVO is still consolidating sideways in a pretty narrow range. Overall the pattern remains bearish but traders might want to wait for a move under $20.50 or the recent low near $20.37 before opening positions. Our target is the $18.15-18.00 range since the $18.00 level was support last year.

Picked on July 23 at $20.94
Change since picked: - 0.08
Earnings Date 07/20/06 (confirmed)
Average Daily Volume: 175 thousand


Watson Wyatt Wld - WW - close: 32.87 chg: -0.23 stop: 34.01

WW's upward momentum is slowing and the stock erased yesterday's gains. We remain bearish and traders might want to open new positions here although if you do we'd consider a tighter stop (maybe $33.55). Our target is the $31.10-31.00 range. We do not want to hold over the early August earnings report. FYI: the most recent data put short interest at 6.9% of WW's 41 million-share float.

Picked on July 16 at $33.19
Change since picked: - 0.32
Earnings Date 08/10/06 (confirmed)
Average Daily Volume: 216 thousand

Closed Long Plays


Closed Short Plays

Today's Newsletter Notes: All plays and content by the Option Investor staff.


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