99 Cents Only Stores (NDN) Q4 2010 Analysis

Recent price: 16.34$

P/E Ratio: 16.84

3 month Target Price: 17.75$

Company Description

99¢ Only Stores is a unique deep-discount retailer of primarily name-brand consumable general merchandise. We have always delivered great value to our customers, and in these challenging economic times, we are "The Right Store...Now More Than Ever!" They provide a primary shopping destination for price-sensitive consumers and a fun treasure-hunt shopping experience for other value conscious consumers. They accomplish this by offering excellent values on a wide selection of quality food and basic household items with a focus on name brands and an exciting assortment of “wow” items.

Their stores are attractively merchandised, clean, full service "destination" locations that offer customers significant value on their everyday household needs in a fun shopping environment. Merchandise encompasses a wide array of name brand closeouts and regularly available consumable products including food and beverages such as produce, deli, and other basic grocery items.

Confidence Margins

Strong resistance $19.07 (+17%)

Light resistance $17.75 (+9%)

Light support $15.75 (-4%)

Strong support $15.10 (-8%)

Recommendation

The NDN stock has recently suffered a large selloff due to a lowering of their revenue guidance. This will be a great opportunity for the coming quarter.

Entry and Exit Strategy

For the cautious investor:

Buy the stock for 16.25$/share or less.

For the risk-taking trader:

Buy 22.50$ March 2011 out of the money call options for about 20$/contract or less. The stock is trading inside a channel defined buy the light resistance and the light support. Selling when the stock is at the higher end of the channel will be cautious and profitable.

For the cautious investor:

Sell when the stock reaches 17.75$, because of the light resistance or keep it until about 19$ if you are very bullish.

For the risk-taking trader:

The announcement of quarterly results should trigger an interesting price movement since the market anticipates them to be bad. A good thing to do would be to hold the contracts until the stock reaches the light resistance

Duke Energy Corporation (NYSE: DUK) Q4 2010 Analysis

Recent price: 17.65$

P/E Ratio: 35.71

3 month Target Price: 18.10$

Company Description

Duke Energy makes life better for millions of people every day by providing electric and gas services in a sustainable way – affordable, reliable and clean.

They are one of the largest electric power companies in the United States, supplying and delivering energy to approximately 4 million U.S. customers. They have approximately 35,000 megawatts of electric generating capacity in the Carolinas and the Midwest, and natural gas distribution services in Ohio and Kentucky. Our commercial and international businesses own and operate diverse power generation assets in North America and Latin America, including a portfolio of renewable energy assets.

Headquartered in Charlotte, N.C., Duke Energy is a Fortune 500 company traded on the New York Stock Exchange

Confidence Margins

Strong resistance  $18.75 (+6%)

Light resistance  $18.10 (+3%)

Light support  $17.50 (-1%)

Strong support  $16.75 (-5% )

Recommendation

This is a stock to hold very shortly since the RSI is getting closer to 70; this means there might be limited upside potential after that.

Entry strategy

For the cautious investor:

Buy the stock for 17.65$ or less.

For the risk-taking trader:

Buy 18$ December out of the money call options for about 19$ a contract.

Exit Strategy

For the cautious investor:

Sell when the stock reaches 18.10$, or keep it until about 18.75$ if you are very bullish.

For the risk-taking trader:

These options are currently undervalued and they should greatly appreciate following a positive move of the stock.

If the resulting price is satisfying, sell the call options as an up price movement happens.

DSP Group, Inc. (NASDAQ: DSPG) Q4 2010 Analysis

Recent price: 7.33$

P/E Ratio: -

3 month Target Price: 8.21$

Company Description

DSP Group, Inc is a leading global provider of wireless chipset solutions for converged communications at home. Delivering system solutions that combine semiconductors and software with reference designs, DSP Group enables consumer electronics manufacturers and service providers to cost-effectively develop innovative revenue-generating applications with fast time to market. DSP Group provides a broad portfolio of wireless chipsets integrating DECT, Wi-Fi, PSTN and VoIP technologies with state-of-the-art application processors. With a growing share of the wireless home telephony market, the Company provides comprehensive solutions supporting all major digital cordless technologies worldwide.

DSP Group serves a broad customer base including leading CE brands, original equipment manufacturers, original design manufacturers, telecommunications operators and service providers. Enabling converged voice, audio, video and data connectivity across diverse consumer products – from cordless and VoIP phones to home gateways and connected multimedia screens – DSP Group proactively partners with CE manufacturers to shape the future of converged communications at home.

Confidence Margins

Strong resistance $8.21 (+12%)

Light resistance $7.50 (+2%)

Light support $6.65 (-9%)

Strong support $6.00 (-18%)

Recommendation

DSPG is currently in an uptrend and still has a lot of potential for growth over the next quarter.

Entry Strategy

For the cautious investor:

Buy the stock for 7.33$ or less.

For the risk-taking trader:

Buy the stock for 7.33$ or less; you might use some leverage to increase the payout from this trade while paying little interest considering the short holding period. If the stock goes under the light support level, you might want to consider closing the position if you cannot bear to have your position temporarily getting to your strong support.

Exit Strategy

For the cautious investor:

Sell when the stock reaches about 8$ or keep it until about 8.20$ if you are very bullish.

For the risk-taking trader:

Same strategy as the cautious investor, except that you should consider closing the position before the light support is the use of leverage has negative effects on the position.

Microsoft Inc. (NASDAQ: MSFT) Q4 2010 Analysis

Recent price: 25.82$

P/E Ratio: 12.23

3 month Target Price: 29.75$

Company Description

Microsoft Corporation is engaged in developing, manufacturing, licensing and supporting a range of software products and services for different types of computing devices. Its software products and services include operating systems for personal computers, servers and intelligent devices; server applications for distributed computing environments; information worker productivity applications; business solutions applications; computing applications; software development tools, and video games. It operates in five segments: Windows & Windows Live Division (Windows Division), Server and Tools, Online Services Division, Microsoft Business Division, and Entertainment and Devices Division. It also designs and sells hardware, including the Xbox 360 gaming and entertainment console and accessories, the Zune digital music and entertainment device and accessories, and Microsoft personal computer (PC) hardware products.

Confidence Margins

Strong resistance  $29.75 (+15% )

Light resistance  $26.40 (+2%)

Light support  $23.80 (-8%)

Strong support  $23.40 (-10%)

Recommendation

As a major player, the company has been severely punished by the market. Most investors expect it to perform very badly on their next earnings report.

Entry and Exit Strategy

The performance will greatly depend on their next earnings report; make sure to open a position before it is issued.

For the cautious investor:

Buy the stock for 25.90$ or less.

For the risk-taking trader:

Buy 27$ November 2010 out of the money call options for about 13$ a contract.

For the cautious investor:

Sell when the stock reaches 26.40$, or keep it until 29.50$ if you are very bullish.

For the risk-taking trader:

Time being a major factor in this trade; try to sell the contracts in the days following the earnings report to lock in your profits before the expiration of those contracts as the proximity of that date has a major effect on their price.

Dryships Inc. (NASDAQ: DRYS) Q4 2010 Analysis

Recent price: 4.57$

P/E Ratio: 24.05

3 month Target Price: 5.70$

Company Description

Dryships is a Marshall Islands registered company that was formed in September 2004. Their business strategy is focused on building and maintaining enduring relationships with charterers of drybulk carriers and providing reliable seaborne transportation services at competitive cost. They seek to create shareholder value by acquiring and operating second hand drybulk carriers across the size spectrum, including large (Capesize), medium (Panamax) and small (Handymax and Handysize), and employing them in a combination of "spot charter", and "period time charter" contracts and pools.

Mr. George Economou, the company’s Chief Executive Officer, has been active in shipping since 1976 and formed the Company's related technical and commercial ship-management company, Cardiff Marine Inc. in 1991. Cardiff has established a reputation in the international drybulk shipping industry for operating and maintaining a fleet with high standards of performance, reliability and safety.

Confidence Margins And Potential Profit

Strong resistance $5.70 (+25%)

Light resistance $5.00 (+9%)

Light support $4.10 (-10%)

Strong support $3.30 (-28%)

Recommendation

The company is currently close to being oversold, with the RSI index lowering and getting close to 30 and the MACD coming back to 0. The next big move in the stock price will be bullish.

Entry and Exit Strategy

For the cautious investor:

Buy the stock for 4.50$ or less.

For the risk-taking trader:

Buy 6$ December out of the money call options for about 10$ a contract. If the stock goes under the light resistance level, you might want to consider closing the position if you cannot bear to have your position temporarily getting to your strong support.

For the cautious investor:

Sell when the stock reaches 5$, due to the strong resistance or keep it until about 5.70$ if you are very bullish.

For the risk-taking trader:

Major price movements should happen when the company announces the awarding of a Rig drilling contract, or after the release of their quarterly report.

If the resulting price is satisfying, sell the call options as soon as either of those events happens.