Option Investor
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Daily Newsletter, Wednesday, 12/31/2008

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Table of Contents

  1. New Plays
  2. In Play Updates and Reviews

New Plays

New Year's Eve: No New Plays

Play Editor's Note: No New Plays Tonight. Enjoy Your New Year's Eve.


In Play Updates and Reviews

Equities Bounce Into 2009


BULLISH Play Updates

FISERV Inc. - FISV - close: 36.37 change: +0.74 stop: 33.95

FISV finished the day up 2% but most of the gains came within the first few minutes of trading. Volume actually ended close to normal levels, which might be considered bullish considering the holiday. I don't see any changes from my previous comments. Our first target is $37.50. Our second target is $39.50. FYI: The point & figure chart is bullish with a $50 target.

Picked on December 30 at $35.63 
Change since picked:     + 0.74   			
Earnings Date          02/04/09 (unconfirmed)    
Average Daily Volume:       1.6 million     


General Dynamics - GD - close: 57.59 change: +1.18 stop: 53.90

GD managed to tag a new relative high intraday and shares closed at new six-week highs. I don't see any changes from our Tuesday comments. If you don't want to buy the stock here then look for a dip back toward $56.00. Our first target is $59.90 since the $60.00 mark looks like round-number resistance. Be sure to take some profits here. We will set a secondary target at $63.00. FYI: The point & figure chart is bullish with a $74 target.

Picked on December 30 at $56.41 
Change since picked:     + 1.18   			
Earnings Date          01/28/09 (unconfirmed)    
Average Daily Volume:       2.5 million     


Hansen Natural - HANS - close: 33.53 change: -0.82 stop: 31.90

Hmm... after out performing the market for the last three weeks shares of HANS under performed today while the rest of the market was in rally mode. More conservative traders may want to exit completely or significantly raise your stop loss.

We are not suggesting new bullish positions. HANS has already hit our first target at $33.90. Our secondary target is $36.00.

Picked on December 16 at $30.25 *triggered       
Change since picked:     + 3.28   			
Earnings Date          02/26/09 (unconfirmed)    
Average Daily Volume:       1.8 million     


Hecla Mining - HL - close: 2.80 change: +0.10 stop: 2.25

There was some news out today on HL that should make bulls much more cautious. The company announced that it had renegotiated with the bank to push back a principal repayment to a later date at a much higher interest rate. I don't know all the details but at face value this is not the sign of a healthy company. The news did not seem to affect the stock price today, which rose 3.7%.

If you're looking for a new entry point I would still be tempted to buy a dip near $2.40, which should become new support. We have two targets. Our first target is $2.95. Our second target is $3.45.

Picked on December 27 at $ 2.65 /gap higher entry
Change since picked:     + 0.15 /originally listed @ 2.48
Earnings Date          02/19/09 (unconfirmed)    
Average Daily Volume:       6.1 million     


Liberty Global - LBTYA - close: 15.92 change: +0.51 stop: 13.85 *new*

LBTYA rallies higher into the near year. Shares rose 3.3% and closed at new six-week highs. Volume was almost normal. We are adjusting the stop loss higher to $13.85. The stock is up almost 10% from our entry point. More conservative traders may want to take some money off the table. Our target is $17.40. The P&F chart is forecasting a $20 target.

Picked on December 29 at $14.50 *triggered       
Change since picked:     + 1.42   			
Earnings Date          02/23/09 (unconfirmed)    
Average Daily Volume:       3.2 million    


Mannatech Inc. - MTEX - close: 2.45 change: -0.15 stop: 2.34

MTEX did not participate in the market's rally on Wednesday. Today's 5.7% loss should be considered relative weakness and a warning for the bulls. At this point I would watch for a bounce near $2.40 as a possible entry point. Our first target is $2.95. Our secondary target is $3.25. Be sure to take some money off the table at our first target since the $3.00 mark and the 50-dma could be tough resistance to crack. I would consider this a higher-risk play because the stock does not have a lot of volume and shares are prone to some big intraday spikes.

Picked on December 27 at $ 2.60 
Change since picked:     - 0.15   			
Earnings Date          03/09/09 (unconfirmed)    
Average Daily Volume:        84 thousand    


Total System Services - TSS - close: 14.00 change: +0.06 stop: 13.49

There are no changes from our previous comments. We're still waiting on a bullish breakout over resistance. I am suggesting a trigger to buy the stock at $14.40.

If TSS hits our trigger at $14.40 we will have two targets. Our first target is $15.95. Our second target is $17.45.

Picked on December xx at $xx.xx <-- see TRIGGER  
Change since picked:     + 0.00   			
Earnings Date          01/22/09 (unconfirmed)    
Average Daily Volume:       1.1 million   


BEARISH Play Updates

Walt Disney Co. - DIS - close: 22.69 change: +0.21 stop: 23.05

As bears on DIS we need to turn more defensive here. The stock cleared technical resistance at its 50-dma on Wednesday. Short-term resistance at $23.00 held for now. A failed rally here or a new decline under $22.00 could be used as a new entry point for shorts. However, if the stock rallies past $23.00 I could see switching to short-term bullish positions.

We have two targets. Our first target is $20.10. Our secondary target is $19.05.

Picked on December 23 at $21.85 
Change since picked:     + 0.84   			
Earnings Date          02/03/09 (unconfirmed)    
Average Daily Volume:      17.9 million     


CLOSED BULLISH PLAYS

RadioShack - RSH - close: 11.94 change: +0.46 stop: 11.15

RSH out performed the S&P 500 with a strong 4% rally. Shares hit a high of $12.07. We have been suggesting that readers exit this stock at $11.70 or higher. The play is now closed. RSH had managed to hit our first target at $12.45 days ago and we opted for an early exit due to waning momentum.

chart:
RSH

Picked on December 13 at $11.15 
Change since picked:     + 0.79   			
Earnings Date          02/12/09 (unconfirmed)    
Average Daily Volume:       4.3 million     


CLOSED BEARISH PLAYS

Applied Materials - AMAT - close: 10.13 change: -0.02 stop: 10.26

AMAT showed relative weakness today and closed at a loss versus a very widespread market rally. Unfortunately, the stock spiked to $10.40 intraday and hit our stop loss at $10.26 closing the play. My bias on AMAT is bearish until shares clear resistance in the $10.85-11.00 zone.

chart:
AMAT

Picked on December 23 at $ 9.72 
Change since picked:     + 0.41   			
Earnings Date          02/10/09 (unconfirmed)    
Average Daily Volume:      19.8 million     


DreamWorks Animation - DWA - close: 25.26 change: +1.03 stop: 24.35

There was no reason for DWA to rally more than 4% today. I believe that today's move was merely exaggerated by light volume and the widespread market rally fueled some short covering. The breakout over the 50-dma and the $25.00 level is technically a bullish signal but will it hold? I doubt it but I'm not betting against it. DWA hit our stop loss at $24.35 closing our bearish play early this morning.

chart:
DWA

Picked on December 23 at $23.18 /stopped out 24.35
Change since picked:     + 2.08   			
Earnings Date          02/26/09 (unconfirmed)    
Average Daily Volume:       902 thousand    


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