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Long Play Updates

BJ Services - BJS - close: 30.14 change: +0.29 stop: 28.99

It was a relatively volatile day for BJS. The stock managed to tag both sides of its trading range with a dip to $29.37 and a spike to $30.54 before finally settling with a 0.9% gain. The relative strength was probably due to a positive earnings report from Halliburton (HAL), another oil services stock. Our weekend updated suggested that readers consider an entry point on a dip near $29.50 or on a rise past $30.55. Today's move satisfied the first entry point suggestion. Our target is the $33.50-34.00 range. Be advised that the $32.00 level and the 50-dma (near $32) might offer some overhead resistance. We do not want to hold over the October 31st earnings report.

Picked on October 19 at $30.55
Change since picked: - 0.41
Earnings Date 10/31/06 (confirmed)
Average Daily Volume: 5.5 million

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D.R.Horton - DHI - close: 23.02 change: -0.21 stop: 22.99

This is a pivotal test for DHI. The stock actually broke down under support at the $23.00 level on an intraday basis. The bounce back this afternoon was pretty anemic. If DHI doesn't rebound from this level tomorrow we'll probably drop it as a bullish candidate. So far we're still just spectators waiting for a breakout over resistance near $25.50. We're suggesting a trigger to go long at $25.51.

Picked on October xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 11/14/06 (confirmed)
Average Daily Volume: 4.1 million

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Denbury Resources - DNR - cls: 29.01 chg: +0.09 stop: 27.99

DNR managed to stall the downward momentum from Friday. Shares bounced twice near $28.60. Whether or not it is a new short-term bottom remains to be seen. We were expecting a dip closer to the $28.00 region. We would suggest waiting for a move over $29.21 or $30.00 before considering new bullish positions. Our target is the $33.00-34.00 range. We do not want to hold over the early November earnings report.

Picked on October 16 at $30.26
Change since picked: - 1.25
Earnings Date 11/01/06 (unconfirmed)
Average Daily Volume: 826 thousand

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Kinetic Concepts - KCI - cls: 34.62 chg: +0.99 stop: 32.65 *new*

KCI shot higher this morning and the stock managed to tick over round-number resistance at the $35.00 level intraday. The relative strength in KCI today (+2.9%) is encouraging but we're not suggesting new positions. More conservative traders may want to lock in a gain right now since we're running out of time. KCI is due to report earnings on Friday, October 27th. We're planning to exit on Thursday afternoon at the closing bell to avoid the earnings announcement. Our target is the $36.00-37.00 range. We're concerned the 100-dma near $36 might be overhead resistance. Please note that we're adjusting the stop loss to $32.65.

Picked on October 08 at $33.35
Change since picked: + 1.27
Earnings Date 10/27/06 (confirmed)
Average Daily Volume: 1.4 million

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PDL BioPharma - PDLI - close: 20.53 chg: -0.13 stop: 19.94

Any attempt at a breakout higher in PDLI seems to be suffering from a lack of upward movement in the BTK biotech index. The BTK has been consolidating sideways for the last three days and the BTK failed to participate in the market rally today. We remain optimistic in PDLI for now but any significant pull back in the biotech sector would definitely hamper this play. We have less than two full weeks before we plan to exit to avoid holding over PDLI's earnings report. Our target is the $22.25-22.50 range.

Picked on October 05 at $20.11
Change since picked: + 0.42
Earnings Date 11/02/06 (confirmed)
Average Daily Volume: 1.3 million

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W&T Offshore - WTI - close: 32.12 chg: -0.20 stop: 30.21

Energy stocks were generally weak thanks to another decline in crude oil. This left shares of WTI drifting flat to down on Monday. We're not suggesting new positions at this time although a bounce from the rising 10-dma might be used as a new entry point. More conservative traders may want to exit near $33.00. Our target is the $34.00-35.00 range.

Picked on October 13 at $30.21
Change since picked: + 1.91
Earnings Date 11/09/06 (unconfirmed)
Average Daily Volume: 534 thousand

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Zale Corp. - ZLC - close: 28.07 chg: +0.24 stop: 27.49

Our new play in ZLC is now open. Traders once again bought the dip near the bottom of ZLC's bullish, rising channel. The initial rally this morning pushed ZLC to an intraday high of $28.32 and our suggested entry point was $28.26. Now that the play is open our target is the $29.90-30.00 range. Please note that ZLC's failure to hold its intraday gains is a concern and right now today's session looks like a mini-failed rally at its 10-dma. The lack of volume on today's rebound is another reason we're feeling cautious here. We would still consider bullish positions with ZLC above $28.00 but we'd prefer to see a new relative high over $28.32 before starting new plays. We do expect some resistance at $29.00 so be prepared for a pull back. FYI: The Point and Figure chart for ZLC forecasts a $37 target.

Picked on October 23 at $28.26
Change since picked: - 0.19
Earnings Date 11/30/06 (unconfirmed)
Average Daily Volume: 376 thousand
 

Short Play Updates

None
 

Closed Long Plays

Olympic Steel - ZEUS - close: 25.96 change: -0.44 stop: 25.95

We have been stopped out of ZEUS at $25.95. Friday's sell-off carried over into Monday and the stock traded under short-term support at the $26.00 level. The intraday low was $25.88.

Picked on October 15 at $27.34
Change since picked: - 1.38
Earnings Date 11/01/06 (confirmed)
Average Daily Volume: 205 thousand
 

Closed Short Plays

None
 

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