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WBSN None

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Websense - WBSN - close: 52.85 chg: +2.80 stop: 49.49

Company Description:
Websense, Inc., the world's leading provider of employee internet management solutions, enables organizations to optimize employee use of computing resources and mitigate new threats related to internet use including instant messaging, peer-to-peer, and spyware. By providing usage policy enforcement at the internet gateway, on the network and at the desktop, Websense products enhance productivity and security, optimize the use of IT resources and mitigate legal liability for our customers. (source: company press release)

Why We Like It:
We normally do not like to play a stock this close to earnings but the recent bullish bounce from support looks like an opportunity we don't want to miss. Shares of WBSN have been channeling higher for months with investors buying dips to the 100-dma or 200-dma's. You can see a similar pattern on the P&F chart where the stock reverses higher after testing its P&F trendline of support. WBSN recently hit that level of support on its P&F chart and began to bounce again. That trend of support coincided relatively close to its simple and exponential 200-dma's on its daily candlestick chart (and price support near $47.50). Now the MACD indicator is producing a new buy signal and short-term oscillators are also positive. Thursday's rally was fueled by its positive earnings news. The company beat estimates by 2 cents, beat on revenues and issued a positive outlook going forward. There is possible resistance in the $54.00-55.00 range and its P&F chart is technically in a sell signal but we believe that WBSN is turning around like it has so many times before. Traders have a choice to make when it comes to initiating new bullish positions. One choice would be to go long at current levels here. Another would be to wait for a possible dip back toward the $50.50-51.00 region and buy a bounce. A third option would be to look for a breakout over 54.50 or 55.00 to confirm the new bullish trend. Our target is the $59.50-60.00 range with an eight-week time frame.

Suggested Options:
We are suggesting the July strikes although Junes are available.

BUY CALL JUL 50.00 DQH-GJ OI= 76 current ask $6.00
BUY CALL JUL 55.00 DQH-GK OI=204 current ask $3.50
BUY CALL JUL 60.00 DQH-GL OI=202 current ask $1.80

Picked on April 27 at $ 52.85
Change since picked: + 0.00
Earnings Date 04/26/05 (confirmed)
Average Daily Volume = 751 thousand
 

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