Option Investor
Play Updates

In Play Updates and Reviews

HAVING TROUBLE PRINTING?
Printer friendly version

Long Play Updates

Advance Auto Parts - AAP - cls: 32.47 chg: -0.15 stop: 31.69*new*

Unfortunately, we have nothing new to report on for AAP. Friday's session was more of the same as the stock consolidated flat to down for the third day in a row following Tuesday's big bullish breakout. The pull back isn't necessarily a bad thing. Broken resistance near $32.00 should offer new support so a dip to or a bounce from the $32.00 region can be used as a new bullish entry point to go long the stock. However, traders should consider a few things first before initiating new plays. If you haven't read the market wrap for this weekend go do so now. The market's historical pattern for the next four weeks is pretty bearish and we would hesitate to open new bullish positions at this time. Second, the P&F chart for AAP is still bearish and the stock could have additional resistance at its descending 100-dma. Third, rival AZO is due to report earnings on Tuesday morning (September 19th). Shares of AZO have shown a lot of relative strength lately, potentially due to a positive expectation for their upcoming earnings. What are the odds of a "sell the news" reaction for AZO, which would then put pressure on AAP? In an effort to reduce our risk on AAP we're going to raise our stop loss to $31.69, which is underneath the rising 10-dma. Our target remains the $35.80-36.00 range. We do not want to hold over the early November earnings report for AAP.

Picked on September 12 at $32.93
Change since picked: - 0.46
Earnings Date 11/02/06 (unconfirmed)
Average Daily Volume: 1.4 million

---

Akamai Tech. - AKAM - close: 47.18 chg: +1.30 stop: 42.05*new*

The post-analyst day rally continues for AKAM. Shares surged another 2.8% on Friday with another strong session of volume. The stock hit an intraday high of $47.40 and is currently up more than 12% from our picked price. We would strongly suggest that readers consider locking in profits right here. We're not suggesting new positions and raising our stop loss to $42.05. Our target remains the $47.50-50.00 range.

Picked on September 11 at $42.05
Change since picked: + 5.13
Earnings Date 10/25/06 (unconfirmed)
Average Daily Volume: 3.8 million

---

Brookfield Asset Mgt. - BAM - cls: 44.61 chg: +0.06 stop: 42.95

We remain cautious on BAM. The stock is still trading in a bullish trend of higher highs and higher lows but the upward momentum has stalled. Now consider that the markets are entering a very dangerous four-week period with a history of weakness and you can see why we would be reluctant to open new bullish plays right here. We're still suggesting that more conservative traders consider cutting their losses early right here or at least consider tightening their stops (maybe 43.49). We're not suggesting new positions. Our target is the $49-50 range.

Picked on August 22 at $44.82
Change since picked: - 0.21
Earnings Date 08/03/06 (confirmed)
Average Daily Volume: 393 thousand

---

eBay Inc. - EBAY - close: 27.85 chg: -0.20 stop: 27.49

A breakout seems imminent for EBAY. The stock's sideways consolidation is narrowing between overhead resistance at the 100-dma and rising support at the 21-dma. The technical indicators are turning bearish and that suggests the next move will be down. EBAY's relative weakness on Friday also suggests the next move is lower. More conservative traders may want to exit early right now. We're not suggesting new positions. Currently our plan is to sell part of the position at $28.75 and the rest at $29.90.

Picked on August 24 at $26.25
Change since picked: + 1.60
Earnings Date 10/18/06 (unconfirmed)
Average Daily Volume: 19.6 million

---

Elk Corp. - ELK - close: 29.25 change: +0.35 stop: 27.95 *new*

ELK continues to show relative strength. The stock rebounded from a dip near its rising 10-dma. The overall pattern continues to look bullish although one could certainly argue that ELK is growing short-term overbought. We're concerned that the market's next move may be down for the next few weeks. Therefore traders may want to seriously consider exiting early right now for a gain. We're going to raise our stop loss to $27.95 and adjust our target to $29.60-30.00, which takes into account for potential resistance at the exponential 200-dma (near 29.60). We're not suggesting new positions.

Picked on August 22 at $27.10
Change since picked: + 2.15
Earnings Date 08/17/06 (confirmed)
Average Daily Volume: 245 thousand

---

Regal Beloite - RBC - close: 44.18 change: -0.24 stop: 42.49

Be careful here! This looks like a false start/bull trap. Shares of RBC rallied over resistance at the $45.00 level on Friday morning to hit an intraday high of $45.18. Our suggested trigger to go long the stock was at $45.11 so the play is now open. Unfortunately, RBC quickly reversed lower and closed back under resistance. We are not suggesting new positions at this time unless RBC hits a new relative high over $45.25. FYI: The next move looks like a dip towards $43. Conservative traders, if you are long RBC at $45.11, might want to cut their losses now with a 2% loss and wait for a new relative high.

Picked on September 15 at $45.11
Change since picked: - 0.93
Earnings Date 10/26/06 (unconfirmed)
Average Daily Volume: 291 thousand

---

SafeNet Inc. - SFNT - close: 18.79 chg: +0.36 stop: 18.15*new*

We are hesitant to open new bullish plays given our market outlook for the next four weeks. Yet the pattern in SFNT continues to look bullish. Aggressive traders might want to buy Friday's bounce, which was near the rising trendline of support (higher lows). Our official strategy still calls for us to wait for a breakout over the $19.50 region. Our entry point will be a trigger to go long at $19.60. Normally we'd be wary of the $20.00 mark as round-number resistance but the trading in SFNT has marked the $19.50 region as the level of resistance to beat. If triggered our target is the $22.00 level. More conservative traders may still want to wait for a rally over $20.00 before opening plays.

Picked on September xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/26/06 (unconfirmed)
Average Daily Volume: 300 thousand

---

United Tech. - UTX - close: 64.61 chg: +1.61 stop: 61.99

Dow-component UTX helped lead the rally higher. The stock added 2.55% on above average volume to breakout over the $64.00 level. The rise was fueled by news that the company was reaffirming their earnings outlook and raising their stock buy back program by $500 million to $2 billion. We remain bullish and continue to target the $66.00 level. The P&F chart has produced a double-top breakout buy signal with a $73 target, that could grow higher.

Picked on September 10 at $63.34
Change since picked: + 1.27
Earnings Date 10/17/06 (unconfirmed)
Average Daily Volume: 3.5 million

---

WebEx Comm. - WEBX - close: 38.71 chg: +0.76 stop: 35.74 *new*

Strength in software and Internet stocks helped WEBX power higher with a 2% gain on Friday. Volume came in relatively strong, which is another bullish condition. Overall shares look poised to move higher and the stock is hitting new five-year highs. We would continue suggesting new plays here but bear in mind our market outlook is not very positive. Traders should closely monitor their stops (more so than normal). We're going to raise the stop loss to $35.74. Our target remains the $42.50-44.00 range. The P&F chart is very positive with a bullish triangle breakout buy signal.

Picked on September 12 at $38.49
Change since picked: + 0.22
Earnings Date 10/25/06 (unconfirmed)
Average Daily Volume: 625 thousand
 

Short Play Updates

Hormel Foods - HRL - close: 35.76 chg: -0.41 stop: 36.65

After two weeks of consolidating sideways, with support at its rising 100-dma, shares of HRL finally broke down. The stock dipped to an intraday low of $35.31 before bouncing back and even the bounce began to fade lower into the closing bell. Volume came in above average on the breakdown, which is bearish. Our target remains the $35.00-34.50 range.

Picked on August 31 at $36.65
Change since picked: - 0.89
Earnings Date 11/23/06 (unconfirmed)
Average Daily Volume: 331 thousand

---

Patterson-UTI - PTEN - cls: 23.08 change: -0.41 stop: 26.05

Oil services stock PTEN continues to sell-off on big volume. Shares lost another 1.7% on Friday, which is a display of relative weakness compared to the bounce in the OSX oil services index. PTEN is quickly approaching our target in the $22.75-22.50 range but since crude oil is looking pretty oversold at this point and produced a bounce from its lows on Friday it might be a good idea to consider taking some money off the table in PTEN. We're not suggesting new positions.

Picked on September 10 at $25.28
Change since picked: - 2.20
Earnings Date 11/02/06 (unconfirmed)
Average Daily Volume: 2.8 million
 

Closed Long Plays

Knight Cap. Grp - NITE - cls: 17.22 chg: -0.96 stop: 16.74

It's time to let go of NITE. The stock can't seem to build on its bullish trend and Friday's session saw a sharp 5.2% decline on big volume that wiped out any potential gains we had. The bearish reversal on Friday was sparked by news that NITE's average trading volume in August was down more than 11% from a year ago. We are suggesting an immediate exit. Nimble traders might actually want to consider shorts on a breakdown below $16.75 or the $16.00 level and its 100-dma. We would target support near the 200-dma around the $14 level.

Picked on August 22 at $17.36
Change since picked: - 0.14
Earnings Date 07/18/06 (confirmed)
Average Daily Volume: 1.5 million
 

Closed Short Plays

None
 

Premier Investor Play Update Archives