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PLMO None

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PalmOne - PLMO - close: 25.71 chg: +1.36 stop: 22.99

Company Description:
palmOne, Inc. -- a leader in handheld computing and communications solutions -- strives to put the power of computing in people's hands so they can access and share their most important information. The company's products include Treo(TM) smartphones, Zire(TM) and Tungsten(TM) handhelds, and software and accessories. (source: company website)

Why We Like It:
We like PLMO for its bullish technical breakout today. Fundamentally investors are somewhat cautious on the stock given its lackluster earnings report last week and its new, lowered guidance going forward. However, technically it looks like PLMO has built a short-term base over the last two months in the $21-25 range. Now shares are breaking out above resistance at the $25.00 level and its 50-dma on above average volume. There is some chatter that PLMO is experiencing a short squeeze, which could be a possibility since the latest data put short interest at almost 35 percent of the float. We'll suggest longs at current levels and target a move into the $29.00-30.00 range. Patient traders might wait for a potential dip back toward the $25.00 level as an alternative entry point. Keep a cautious eye on the exponential 200-dma near $27.50 as this could be resistance.

Suggested Options:
We are going to suggest the May calls.

BUY CALL MAY 22.50 UPY-EX OI=2403 current ask $4.50
BUY CALL MAY 25.00 UPY-EE OI=3076 current ask $2.75
BUY CALL MAY 30.00 UPY-EF OI=6040 current ask $1.00

Picked on March 23 at $ 25.71
Change since picked: + 0.00
Earnings Date 03/17/05 (confirmed)
Average Daily Volume = 3.2 million
 

New Puts

None today.

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