Monday, September 25, 2006

Daily Calls -- Sept. 26, 2006

The market overcame the early weakness and rebounded forcefully to close above last Friday’s high, with SP500 closed at new high. By doing so, very bullish candle formed for the major indices and many stocks, suggesting an imminent break-out. The question is, if the indicies/stocks do break-out broadly tomorrow, should longs play the break-out or at lighten up any long positions? Personally, I feel that the reward/risk ratio is not attractive for the break-out long play, however, short-on-top at this stage seems also very risky. Hmm, dilemma, dilemma, dilemma….

1. AAPL: L1 on pullback, entry zone 74.74.5, stop 73.7, IT= 76.

2. AKAM: L1 on pullback, entry zone 47.2-47.8, stop just below 47.

3. BRCM: L2 on pullback, entry zone 29.2-29.6, stop just below 29, IT=31.

4. CHAP: S1 on rebound, entry zone 33.3-33.9, stop 35-MA50=35.4

5. COST: S3 on top as it approaches 52.5 use a tight stop around 52.65, IT=50

6. CTRP: L3 on bottom as it retests MA200=43.4, IDS=42, IT=46.

7. DVN: L3 on bottom, entry zone 57.2-58.5, stop just below 57, IT=62

8. ESRX: CTT between 73 and 80 use tight stop.

9. MU: S3 on top, entry zone 18-18.5, stop around 18.7, IT=MA50=16.8

10. OS: S2 on top, entry zone 47-48, stop around MA50=48.4, IT=MA200=43.1

11. RHAT: L1 on pullback, entry zone 25.40-25.85, stop 25.1, IT=27.3.

12. SONS: L1 on pullback, entry zone 5.25-5.4, stop 5.18; IT=5.75. watch for possible break-out (5.75).

13. STP: L1 on pullback, entry zone 23.6-24.2, stop around 23.3, IT around 26.

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