Option Investor
Play Updates

In Play Updates and Reviews

Printer friendly version

Long Play Updates

AllState - ALL - close: 65.92 change: +0.23 stop: 63.49

ALL gapped up slightly on Wednesday and held its grounds all day (but didn't make much further progress). It was able to challenge last week's high of $66.06 but not get above it. ALL is short term overbought so we could see a pullback but hopefully the 10-dma, now at $65.33, will continue to provide support. We remain bullish on the stock above $65.00 although we could see an intraday move down to its 20-dma at $64.65. While our stop remains at $63.49 (now just below the rising 50-dma at $63.51) more aggressive traders may want to exit with a break of the uptrend line from August, currently at $64.40. Daily stochastics is now overbought and there is a bearish divergence on RSI. In the meantime our upside target is the $69.00-70.00 range.

Picked on December 15 at $65.25
Change since picked: + 0.67
Earnings Date 01/31/07 (unconfirmed)
Average Daily Volume: 2.4 million


ONEOK Inc. - OKE - close: 43.76 change: +0.36 stop: 42.25

OKE continues to show relative strength vs. the natural gas index (XNG.X) and looks to be recovering nicely off its December dip. By holding above $43 this should turn more bullish over the next several days and by moving higher it should get its 10-dma ($43.33) back above it 20-dma ($43.46) and lend price support. Our stop is currently near the uptrend line from May which is right on top of the 50-dma at $42.22.

Picked on November 28 at $42.25
Change since picked: + 1.51
Earnings Date 07/26/06 (unconfirmed)
Average Daily Volume: 547 thousand


Raytheon - RTN - close: 53.63 change: +0.18 stop: 51.99

RTN got a small lift on Wednesday with the market. We're watching how price will react if it RTN pulls back to its uptrend line from November which is right on top of its 10-dma, both at $53.25. We remain somewhat cautious given the overbought oscillators so we are not suggesting new positions. Considering how close Thursday's high ($54.17) came to our target in the $54.50-55.00 range and the steepness of the rally since November, we could see a larger pullback. We're leaving our stop below the 20-dma at $52.63 and the $52.06 low on 12/11/06 but more aggressive traders can consider raising the stop closer to the 20-dma.

Picked on November 29 at $51.05
Change since picked: + 2.58
Earnings Date 01/25/07 (unconfirmed)
Average Daily Volume: 1.5 million


St.Paul Travelers - STA - close: 54.23 change: +0.21 stop: 51.95

STA had a wild day on Wednesday with a gap up, a drop back down into negative territory and then an afternoon bounce back up into positive territory. It remained comfortably above its 10-dma and continues to look bullish here. But with the daily oscillators looking to be rolling over and the bearish divergence at the last high we do not recommend any new plays in this stock. The current stop at $51.95 keeps it below the 20-dma and uptrend line from August, both currently at $52.78. Our target is the $57.50 level. The P&F chart is bullish with a $76 target.

Picked on December 17 at $53.56
Change since picked: + 0.67
Earnings Date 02/01/07 (unconfirmed)
Average Daily Volume: 2.5 million

Short Play Updates

Cheesecake Factory - CAKE - close: 24.90 chg: +0.22 stop: 27.01

CAKE continues to be pressured lower by its downtrend line from the end of November (currently at $25.00) and its 10-dma (at $25.34). This bodes well for our short play and the stop at $27.01 is above the 20-dma at $26.02. Once the 20-dma drops below the neckline at $25.70 we'll be able to lower our stop to just above that and get it closer to our entry price. In the meantime use a bounce to the 10-dma or $25.70 to initiate a new play. Our downside target is the $22.25-22.00 range. We do expect some support near $24.00 but given the bearish technicals on the weekly chart we think any bounce at $24 would be temporary. The P&F chart currently points to a $4.00 target. FYI: The most recent (November) data puts short interest at 11.8% of CAKE's 73.7 million-share float. That is relatively high short interest and could raise the risk of a short-squeeze if CAKE manages to rally.

Picked on December 18 at $25.65
Change since picked: - 0.75
Earnings Date 11/30/06 (confirmed)
Average Daily Volume: 1.3 million


Colonial Prop. - CLP - close: 46.61 change: +0.39 stop: 48.26

CLP continued higher today and made it back up to its 10-dma at $46.62 and its downtrend line from the end of November located at the same level. This bounce is another opportunity for a short entry with the same stop level as noted above. If it continues higher on Thursday the next resistance level is prior support near $47.20. We're keeping our stop at $48.26 to keep it above the 200-dma. Our target is the May 2006 low at $42.68 but we will plan to exit at $42.75. We do not want to hold over the late January earnings. FYI: Traders should know that in the past few months CLP has been noted as a potential takeover/acquisition target in the real estate sector. If a deal is announced it could be very painful for shorts but we haven't heard anything further on the subject. Meanwhile short interest is about 3% of the 43.4 million-share float.

Picked on December 17 at $46.71
Change since picked: - 0.10
Earnings Date 01/30/07 (confirmed)
Average Daily Volume: 217 thousand


New Century - NEW - close: 32.21 change: -2.11 stop: lowered to 35.70

After yesterday morning's spike up and then drop for the rest of the day we thought the short term pattern looked bearish and indeed it was. Today saw a big gap down followed by price flatlining. Our stop is being lowered after today's drop to the declining trend line along the lows since June. The stop is now above the 20-dma and price support-turned-resistance at $35.54. More aggressive traders can lower their stop to just above the 20-dma and downtrend line from August, both near $35.00. We remain bearish on NEW and traders can choose a breakdown under $34 (although today's gap down didn't give you much of a chance) or a failed rally that closes today's gap at $34.32 as a new entry point. Our target is the $31.00-30.00 range. FYI: The most recent (November) data put short interest at 22% of the company's 50 million-share float. That is a very high degree of short interest and it does raise the risk of a short squeeze if NEW reverses sharply higher.

Picked on December 10 at $34.47
Change since picked: - 2.26
Earnings Date 02/01/07 (unconfirmed)
Average Daily Volume: 1.4 million


21st Century - TCHC - close: 23.42 change: +0.37 stop: 26.01

TCHC bounced a little further today but didn't quite make it up to its 10-dma at $23.81 which is also the location of its downtrend line from October. Volume was downright anemic today (even with the lower holiday volume we're seeing in general) which supports the idea that the bounce will fail. Our stop at $25.01 is above the 20-dma at $24.82 so that will hopefully allow this to whip around a bit underneath our stop. Our downside target is the $21.50-20.00 range. The most recent (November) data puts short interest at over 6% of TCHC's 6.4% float. That's a very small float so 6% might be enough short interest to really increase the risk of a short squeeze should TCHC reverse higher.

Picked on December 10 at $24.84
Change since picked: - 1.42
Earnings Date 11/01/06 (confirmed)
Average Daily Volume: 115 thousand


Cognos - COGN - close: 41.88 change: -0.21 stop: 42.31

The short play in this stock has not been triggered yet as we're still waiting for it to drop through its 50-dma, currently at $39.88, to trigger our entry at $39.60. Price action on the daily charts looks like it's just consolidating so we like our entry price and will patiently wait for it to get hit. We might raise our trigger price if this pushes a little higher in the coming week. Our downside target price is $35.00 which is just above its 200-dma and at previous price level resistance now potential support.

Picked on December 21 at $40.19 (waiting for trigger at $39.60)
Change since picked: + 1.69
Earnings Date 12/20/06 (confirmed)
Average Daily Volume: 2.0 million


Citrix Sys. - CTXS - close: 27.37 change: +0.55 stop: 51.95

After dropping below support at $27.60, which is a potential H&S neckline for price action since August, we are now hoping to see CTXS head for its H&S price objective of $18 which is the same as the current P&F price objective. Aggressive traders can aim for that target while a short term downside target is a little less aggressive at $24.60 which is based on the 200 weekly average and a gap fill from October 2005 ($24.47 closing price on 10/24/05). An additional entry opportunity can be found if CTXS bounces back up to resistance at $27.60, which it appears it might do this week.

Picked on December 22 at $27.45
Change since picked: - 0.08
Earnings Date 01/27/07 (unconfirmed)
Average Daily Volume: 3.8 million

Closed Long Plays


Closed Short Plays


Premier Investor Play Update Archives