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Long Play Updates

Builders FirstSource - BLDR - close: 21.86 chg: +0.13 stop: 20.25

BLDR managed a bounce from Friday's morning low near the simple 10-dma but volume came in very low. The low volume does not inspire a lot of confidence so we urge traders to be cautious. We are not going to suggest new long positions here. There are too many other candidate that look stronger. The overall pattern for BLDR remains bullish and our target is the $23.50-24.00 range. We do not want to hold over the earnings report even if we think it will be positive.

Picked on January 03 at $21.75
Change since picked: + 0.16
Earnings Date 01/26/06 (unconfirmed)
Average Daily Volume: 205 thousand

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Duke Energy - DUK - close: 27.79 change: +0.18 stop: 27.25 *new*

Utility stocks continue to inch higher and DUK is inching right along with them. The stock added 0.6% on Friday and came very close to our target in the $27.95-28.00 range. We are not suggesting new plays. We are going to raise our stop loss to $27.25.

Picked on December 13 at $26.89
Change since picked: + 0.90
Earnings Date 02/01/06 (unconfirmed)
Average Daily Volume: 3.9 million

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Lear Corp. - LEA - close: 29.34 change: +0.09 stop: 27.99

LEA is a new bullish candidate from the Thursday night newsletter. We do not see any change from our original play description so we're reposting it here:

The multi-month bearish trend in the major U.S. carmakers and some of the parts suppliers may be ending - at least short-term. The group has been strongly lately after the recent December vehicle sales data, while bad, was not worse than expected. The downward momentum in LEA actually stalled a few weeks ago and the stock has been building a sideways base in the $27.00-29.00 region. Wednesday's bullish breakout over the 50-dma looked like a buy signal although the shares failed to push past the $30 level today the pull back stalled near $29.00, which as broken resistance should act as new support. We want to buy a bounce from $29.00. More conservative traders may want to wait for LEA to trade over Thursday's high at $30.13 before going long. We're going to set our stop loss at $27.99. We are looking for a quick move into the $32.40-33.00 range before its January 25th earnings report. We do not want to hold over the report.

Picked on January 05 at $29.25
Change since picked: + 0.09
Earnings Date 01/25/06 (unconfirmed)
Average Daily Volume: 1.8 million

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LifeCell Corp. - LIFC - close: 19.63 change: +0.05 stop: 19.24

The last few days has seen LIFC rally from its lows near $18 but the stock remains stuck under resistance at the $20.00 level and its 100-dma (at 20.30). Our trigger to go long is at $20.65. One problem is the time frame. LIFC is due to report earnings in late January (in about three weeks) and we do not want to hold over the report. Keep that in mind if you're considering a long position. If triggered we'll target a rally into the $24-25 range. The P&F chart is bullish with a $29 target.

Picked on December xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 01/25/06 (unconfirmed)
Average Daily Volume: 598 thousand

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VCA Antech - WOOF - close: 29.38 chg: +0.20 stop: 27.45

WOOF continues to inch higher and notched another all-time high on Friday. Our target is the $29.90-30.00 range but more conservative traders may want to think about exiting early right here for a gain. We are not suggesting new plays. We will plan to exit ahead of the late January earnings report.

Picked on November 09 at $26.74
Change since picked: + 2.60
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume: 436 thousand
 

Short Play Updates

GMX Resources - GMXR - close: 35.87 chg: -0.20 stop: 38.51

We may be bearish on GMXR but we're still surprised at the stock's relative weakness on Friday. The oil sector turned in a very strong day. The OIX oil index added 2% and the OSX oil services index rose 3.5%. Meanwhile shares of GMXR produced another minor failed rally and closed under its 21-dma to test the $35 level again. Volume came in above average on Friday's decline and that's another bearish clue. More conservative traders may want to wait for a new decline under $35.00 before initiating positions. Our target will be the $30.50-30.00 range. We do not want to hold over the late January earnings report.

Picked on January 01 at $36.00
Change since picked: - 0.13
Earnings Date 01/29/06 (unconfirmed)
Average Daily Volume: 256 thousand

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Mercury Computer - MRCY - close: 19.69 change: +0.36 stop: 20.51

MRCY produced a bit of an oversold bounce on Friday but considering the market's strength we're not too surprised. Watch for a failed rally under round-number resistance at $20.00 as a new entry point. We're reposting our original play description here:

Technology stocks, especially hardware, have been strongly lately. That's why MRCY's relative weakness makes it so tempting as a short candidate. The stock gapped down back in October after issuing an earnings warning for fiscal year 2006. The oversold bounce took a couple of months but now MRCY is turning lower again. The stock's decline today (-3.5%) broke down below round-number, psychological support at the $20.00 level, technical support at the 50-dma, and MRCY's two-month trend of higher lows. Volume came in above average on the decline. We are going to target a drop into the $17.70-17.50 range by its January earnings report. We do not want to hold over the report.

Picked on January 05 at $19.34
Change since picked: + 0.36
Earnings Date 01/26/06 (unconfirmed)
Average Daily Volume: 296 thousand

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Somanetics - SMTS - close: 28.56 change: -1.07 stop: 32.45*new*

SMTS continues to show relative weakness and there was a lot of its on Friday with SMTS' 3.6% decline. Volume came in about twice the average, which is also bearish. Friday's close under the simple 100-dma doesn't bode well for the bulls. We are adjusting our stop loss to breakeven at $32.45. More conservative traders may want to think about exiting early right here for a gain. We are not suggesting new positions. Our target is the $27.50-27.00 range.

Picked on December 29 at $32.45
Change since picked: - 3.77
Earnings Date 01/11/06 (unconfirmed)
Average Daily Volume: 158 thousand

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Waters Corp. - WAT - close: 37.35 chg: +0.09 stop: 39.01*new*

WAT doesn't seem to be in a hurry to get anywhere but the lack of participation in the market's rally last week is bearish. The stock has a pretty strong trend of lower highs and that should help produce some lower lows. We would still consider new positions here but you might want to use a tighter stop loss. We are going to lower our stop to $39.01. Our target is the $35.25-35.00 range. WAT's P&F chart points to a $25 target. We do not want to hold over the late January earnings report.

Picked on December 18 at $38.60
Change since picked: - 1.25
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume: 901 thousand
 

Closed Long Plays

Norfolk So. Corp. - NSC - close: 42.16 chg: -0.69 stop: 42.49

We have been stopped out. NSC was downgraded on valuation concerns before the opening bell on Friday. The stock reacted with a gap down to open at $42.15. That's below our stop loss at $42.49. The stock did rebound off its lows but shares have broken their multi-month bullish channel and technical support at the 50-dma. Aggressive players might want to watch for a failed rally near $43 and consider shorts. Just remember that Jim suggested not shorting NSC in the wrap a couple of weeks ago but the stock is showing more weakness than some of its peers.

Picked on December 22 at $44.35
Change since picked: - 2.19
Earnings Date 01/25/06 (unconfirmed)
Average Daily Volume: 2.2 million
 

Closed Short Plays

Network Appliance - NTAP - cls: 28.98 chg: +0.77 stop: 28.55

The networking sector has been soaring powered by a big rally (or short squeeze) in shares of Cisco Systems (CSCO). The bears in NTAP finally gave up on Friday and the stock vaulted ahead of its 50-dma. Actually the stock gapped open higher at $29.03 above our stop loss at $28.55 making our loss bigger than expected. Shares still have additional resistance at the $30 level.

Picked on December 28 at $27.70
Change since picked: + 1.28
Earnings Date 02/15/06 (unconfirmed)
Average Daily Volume: 4.3 million
 

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