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Long Play Updates

Advance Auto Parts - AAP - cls: 32.82 chg: -0.41 stop: 31.89

The market pulled back on Thursday and shares of AAP followed lower after testing overhead resistance at its 100-dma yesterday. There is a chance that AAP will pull back again toward support near $32.00. We would wait and watch for another bounce from $32.00 before considering new bullish positions. Then again our market outlook isn't that optimistic for the next few weeks and we'd think twice before starting any new long plays. 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: - 0.11
Earnings Date 11/02/06 (unconfirmed)
Average Daily Volume: 1.4 million

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Hovnanian - HOV - close: 28.11 change: -0.72 stop: 27.74

Housing stocks continued to pull back on Thursday. The DJUSHB home construction index lost 2% and HOV fell 2.5%. Shares of HOV continue to struggle with technical resistance at its falling 100-dma. Fortunately, we're still sitting on the sidelines waiting for a bullish breakout over $30.00. Our suggested entry point is a trigger at $30.11. If we're triggered at $30.11 our target is the $34-35 range. Our time frame is six to eight weeks.

Picked on September xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 09/06/06 (confirmed)
Average Daily Volume: 1.6 million

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Intl. Game Tech. - IGT - close: 39.49 chg: -0.02 stop: 38.24

Shares of IGT continued to consolidate sideways in a narrow range. The lack of participation in the market's weakness could be see as a show of relative strength for IGT. However, we're still worried about what looks like a bull trap with the failed rally over $40 a week ago. Wait for a move over $40.32 before considering new bullish positions. Although we have been suggesting that more aggressive traders consider buying a bounce from $39 or its 10-dma. Our target is the $44.00-45.00 range. We do not want to hold over the early November earnings report.

Picked on September 17 at $40.26
Change since picked: - 0.77
Earnings Date 11/02/06 (unconfirmed)
Average Daily Volume: 2.2 million

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Regal Beloite - RBC - close: 44.04 chg: -0.85 stop: 42.85 *new*

Watch out! We have to wave the warning flag yet again with RBC. This is the second time the stock has rallied past resistance near $45.00 only to reverse lower into a potential sell signal. Shares even traded over our new higher entry point at $45.25. Volume on today's failed rally and bearish engulfing candlestick pattern was above average, which is not a good sign. The next move will probably be lower but so far RBC has been trading with a bullish pattern of higher lows. Therefore we're going to raise our stop loss to $42.85, which is a few cents under the Tuesday low. We're not suggesting new bullish positions with RBC under $45.00.

Picked on September 15 at $45.11
Change since picked: - 1.07
Earnings Date 10/26/06 (unconfirmed)
Average Daily Volume: 291 thousand

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United Tech. - UTX - close: 62.90 chg: -1.00 stop: 61.99

As a Dow-component, UTX's 1.5% decline was a contributing factor to the DJIA's loss. Volume was above average on today's weakness, which is not a good sign. Short-term momentum indicators are turning bearish. More conservative traders may want to exit early cut their losses or raise their stop toward today's low (62.50). We're not suggesting new positions.

Picked on September 10 at $63.34
Change since picked: - 0.44
Earnings Date 10/17/06 (unconfirmed)
Average Daily Volume: 3.5 million

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WebEx Comm. - WEBX - close: 38.23 chg: -0.46 stop: 35.99 *new*

Internet stocks were some of the worst performers today. The INX Internet index lost 2.4%. Shares of WEBX only lost 1.18% but the technical indicators are starting to turn bearish due to the stock's waning momentum. More conservative traders may want to reduce their risk by raising their stop loss toward $37.50, which has been short-term support over the last week. We're going to adjust our stop to $35.99. We are not suggesting new positions at this time. 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: - 0.26
Earnings Date 10/25/06 (unconfirmed)
Average Daily Volume: 625 thousand
 

Short Play Updates

Charlotte Russe - CHIC - close: 25.89 chg: -0.38 stop: 27.05

Traders on your mark! Get set! Shares of CHIC continued to slip today and shares lost 1.44% and closed under potential support at $26.00 and its 50-dma. This looks like a new sell signal to short the stock. Aggressive traders may want to open positions now. We're still waiting for CHIC to hit our trigger at $25.75. The stock looks poised to begin a new leg lower. There is probably some support near $24.00 and its 100-dma and then additional support near $22.00 and its rising 200-dma. If triggered our target is the $22.10-22.00 range. FYI: The latest (August) data puts short interest at 6.9% of CHIC's 22.2 million-share float.

Picked on September xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/19/06 (unconfirmed)
Average Daily Volume: 497 thousand

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Commercial Metals - CMC - close: 20.00 chg: -0.37 stop: 21.55

Our bearish play in CMC is now open. The stock has been showing some relative weakness the last couple of days and today shares broke down (intraday) under support at $20.00. The intraday low was $19.69 and our suggested entry point to short CMC was at $19.90. Our target is the $17.50-17.00 range. We do not want to hold over the late October earnings report.

Picked on September 21 at $19.90
Change since picked: + 0.10
Earnings Date 10/24/06 (unconfirmed)
Average Daily Volume: 1.5 million

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Hormel Foods - HRL - close: 36.25 chg: +0.08 stop: 36.51

HRL displayed relative strength for the second day in a row. We're not suggesting new positions at this time. More conservative traders may want to exit early or tighten their stops.

Picked on August 31 at $36.65
Change since picked: - 0.40
Earnings Date 11/23/06 (unconfirmed)
Average Daily Volume: 331 thousand

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Tessera Tech. - TSRA - close: 31.54 chg: -0.78 stop: 32.81 *new*

Good news! The rally in TSRA failed at $32.80 this morning and the stock produced a bearish reversal with another decline under its rising 50-dma. This looks like a new entry point to short the stock. However, more conservative traders may want to wait for another drop back under support at the $31.00 level. Keep an eye on the SOX semiconductor index, which looks vulnerable to more selling but still has some support at the 450 level. We're going to adjust our stop loss to $32.81. Our target is the $26.00-25.00 range. FYI: Readers should note that the latest (August) data puts short interest at 11.7% of the stock's 42.8 million-share float. That is a relatively high amount of short interest and makes this a higher-risk play.

Picked on September 19 at $30.95
Change since picked: + 0.59
Earnings Date 10/31/06 (unconfirmed)
Average Daily Volume: 634 thousand
 

Closed Long Plays

Elk Corp. - ELK - close: 28.30 change: -0.55 stop: 27.95

We are calling it quits on ELK and suggesting an early exit. The stock erased yesterday's gains with a 1.9% loss today. Volume evaporated on today's decline but that didn't stop the MACD on the daily chart from producing a new sell signal. More aggressive traders may want to let it ride since ELK held at short-term support near $28.00.

Picked on August 22 at $27.10
Change since picked: + 1.20
Earnings Date 08/17/06 (confirmed)
Average Daily Volume: 245 thousand
 

Closed Short Plays

None
 

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