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Long Play Updates

Brookfield Asset Mgt - BAM - cls: 41.27 chg: +0.44 stop: 38.49

BAM's early strength on Friday faded lower through most of the day until traders bought the dip again near $40.50. We do not see any changes from our new play description on Thursday night so we're reposting it here:

The May sell-off in stocks was pretty tough on BAM with a drop from $44 to under $38.00 at its lowest. Shares had fallen out of its long-term rising channel. However, today's sharp rally, on top of Wednesday's intraday bounce from support near $38.00, has put BAM back into its rising trend. As you might expect the short-term technical oscillators are turning positive. Normally we don't like to chase a move this big (+4.9% on Thursday) but the major averages look poised to move higher so we'll hop on the band wagon. Our goal will be the $43.85-44.00 range.

Picked on May 25 at $40.83
Change since picked: + 0.44
Earnings Date 04/28/06 (confirmed)
Average Daily Volume: 473 thousand


Drew Industry - DW - close: 32.00 chg: +0.38 stop: 30.19

DW added 1.2% on Friday but volume was pretty light ahead of the holiday-weekend. There's no doubt that shares have broken out of its two-week trading range now. However, studying the intraday chart suggests that DW might dip back toward the $31.50 level again. Readers may want to wait for a pull back before initiating new positions. We're reposting the new play description from Thursday night here:

Shares of DW have spent the last two weeks consolidating sideways in a narrow trading range above technical support at its simple 200-dma. Now that the market is rebounding shares of DW are breaking out from its range. The MACD has produced a new buy signal and short-term technicals are improving. The stock does have a bearish P&F chart, which was produced with the month of May sell-off, but that doesn't mean shares can't bounce back toward $34.00. We are going to suggest positions here with the stock over $31.50. More conservative traders might want to wait for a move over $32.00. Our target is the $33.75-34.00 range since the 50-dma and 100-dma are converging on that area and these two moving averages are likely to be overhead resistance.

Picked on May 25 at $31.62
Change since picked: + 0.38
Earnings Date 05/01/06 (confirmed)
Average Daily Volume: 137 thousand


Health Net. - HNT - close: 42.09 chg: +0.17 stop: 39.95

We are starting to worry just a little bit about HNT's upward momentum. It seems to be slowing. The stock spent most of the last couple of days consolidating sideways. We're not going to suggest new long positions at this time. Our target remains the $44.50-45.00 range for now. More conservative traders might want to consider a tighter stop near $41.00 or its 10-dma near 41.50.

Picked on May 16 at $41.12
Change since picked: + 0.97
Earnings Date 08/07/06 (unconfirmed)
Average Daily Volume: 1.1 million


Murphy Oil - MUR - close: 51.76 chg: +0.23 stop: 48.75

We do not see any changes from our new play description on Thursday night so we're reposting it here:

Oil stocks are on the rebound and strength in crude oil certainly doesn't hurt the bulls' argument for further gains. Shares of MUR have been consolidating sideways with a trend of lower highs and higher lows. We believe that the breakout is going to be higher but we want to see it first. We're going to suggest a trigger to go long the stock at $52.55, which would be a breakout of its resistance trendline (see chart). Our target will be the $57.50-60.00 range. Currently the P&F chart points to a $73 target.

Picked on May xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/25/06 (unconfirmed)
Average Daily Volume: 1.3 million


SLM Corp. - SLM - close: 54.63 chg: -0.19 stop: 53.35

SLM continues to creep higher in a slow process of higher highs and higher lows over the last six weeks. We suspect that the next move will be lower toward the $54.00 region. Watch for the dip-bounce combo before considering new positions. Our target is the 57.40-57.50 range.

Picked on May 22 at $55.21*gap higher*
Change since picked: - 0.39
Earnings Date 07/20/06 (unconfirmed)
Average Daily Volume: 2.0 million

Short Play Updates

Akamai - AKAM - close: 31.67 chg: -0.65 stop: 33.01

There was almost no follow through on AKAM's big bounce on Thursday and that's good news for the bears. The stock appears to have formed a descending channel of lower highs and lower lows. However, we would not get too confident. This remains a risky play given the stock's volatility. Short-term technicals are mixed given the recent action in the share price. The Point & Figure chart, which normally weeds out a lot of the daily noise, is bearish and points to a $21.00 target. We are not suggesting new positions at this time and more conservative traders, if you have not already exited, may want to tighten their stops toward $32.50. We are going to adjust our target to $28.50 to account for the rising 100-dma. At the moment last week's low near $28.40 is looking like a decent exit.

Picked on May 23 at $31.15
Change since picked: + 0.52
Earnings Date 07/26/06 (unconfirmed)
Average Daily Volume: 3.2 million


K-Swiss - KSWS - close: 27.22 chg: -0.14 stop: 28.05

We are encouraged by KSWS' relative weakness on Friday but we remain wary. The trend is bearish with its lower highs and lower lows but the technicals are starting to look more bullish. We are not suggesting new positions at this time. We are adjusting our target to $26.00. The P&F chart points to a $19 target.

Picked on May 12 at $27.45
Change since picked: - 0.23
Earnings Date 04/27/06 (confirmed)
Average Daily Volume: 300 thousand


Starbucks - SBUX - close: 35.43 chg: -0.01 stop: 36.65

SBUX continues to under perform the market as shares consolidate under the $36.00 level and vacillate back and forth across its 100-dma. We remain bearish but hesitate to suggest new positions with the major averages in rebound mode. Traders should be aware that shares of SBUX could see some volatility on Thursday, June 1st when the company reports its May sales numbers. We are going to target the top of its February gap (33.00) with an exit range of $33.15-33.00.

Picked on May 23 at $35.59
Change since picked: - 0.16
Earnings Date 08/02/06 (unconfirmed)
Average Daily Volume: 5.7 thousand

Closed Long Plays


Closed Short Plays

Ryan's Restaurant - RYAN - cls: 12.74 chg: -0.23 stop: 13.01

We have been stopped out of RYAN. The stock opened at $13.00 and spiked to $13.07 before fading lower again. The move on Friday looks like a failed rally and a potential entry point to short RYAN again. More aggressive traders may want to consider new positions here with a stop above Friday's high. The overall pattern remains bearish with its head-and-shoulders pattern and P&F chart that points to a $9.00 target.

Picked on May 22 at $12.29
Change since picked: + 0.45
Earnings Date 04/26/06 (confirmed)
Average Daily Volume: 268 thousand

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