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Ready to Rally?


Stocks to watch right now.

Here are my targets for accumulation, my potential shorts and adds thus far today. The economic numbers were about as good as they could have been, and I feel we could be setting up for a powerful rally next month.

What that means is that a full robust rally won't happen today, but certain stocks may have set or tested lows for the year this week - including today's follow on selling.

I've done little this week except build an ever-growing watch list. I did add Juniper Networks (JNPR), since I felt the valuation was compelling enough to risk some downside.

Additionally, I'll share some of my current stock themes.

Visa (V): Now in the mid $79s and under, this is a good buy. I added it again, will likely clip some for a day trade and may allow some to run. Furthermore, this is one of the stocks I'll likely use again and again in times of market weakness.

VMWare (VMW): I sold this sometime ago, but every time it hits the low $50s, I put it on the front screen. I believe virtualization will be huge and that VMWare will maintain a sizable lead despite new product releases from Microsoft (MSFT). If it goes under $50? I'll own some.

Research In Motion (RIMM): See my comments from yesterday's Buzz. The cellular market, like the broadband market, is bifurcated. High-end multi-function phones are replacing the lower-end handsets - see Research In Motion results versus those of the Sony (SNE)/ Ericsson (ERIC) joint venture. Some companies will defy the prevailing negativity. I think Apple (AAPL) and Research In Motion are moving into a more dominant position every month. And the lower each of them trade, the more I like them.

Ciena Corporation (CIEN): Another nasty downturn for this terrific renewed growth story on a fundamental basis. Ciena has leading solutions for the intelligent, dynamic and bandwidth-straining networks in secular-growth mode worldwide, as well as new software coming for yet another revenue stream. However, only the toughest traders and investors need apply to the long Ciena club, because when Ciena is caught in the undertow, it really does feel like it will never rise again.I added to Ciena near $23 this morning.

Solar: Almost any high-quality solar name is a buy - if you have the moxie. They are just getting crushed today, with nothing but positive news (so far as I can see), and yesterday was brutal as well. I have not added much solar exposure this week, though I've wanted to every day.

This week we saw a $100 billion alternative energy plan from the United Kingdom, Japan talking about investment and subsidies, and U.S. legislation on the docket which should provide a catalyst. Last but not least, we have oil spiking following the Fed's meeting.

So where's the rub? Well, Goldman Sachs (GS) issued a mixed report - but, coming from Goldman, it sounded more negative than it might have otherwise, since they've been pounding out downgrades like it's their job. They were, however, mostly bullish on chips.

This is primarily because solar is the new technology beta trade, and beta has been an easy target for machines (given the algorithms). The fear trade has been in full swing since Trichet got very hawkish a couple of weeks ago.

Lam Research (LRCX): A positive note from Goldman here on chips, since they featured Lam. Stock has been killed, and a better cycle for them should be on the way. Lam has very good value at current levels.

Juniper Networks: I think Juniper's demise is greatly exaggerated, and I've buzzed on this a few times of late.

Citrix Systems (CTXS): A frequent trader of mine, as well as my second favorite virtualization play and my favorite software name in general. I may be back long again today as the stock is under $30.

Akamai Technologies (AKAM): I sold this stock at higher levels, and recent news about SBC (T) entering their space and the negative beta tilt against tech has made for a tough couple weeks for Akamai. I like it better under $32 and may wait for that level. However, a late-day charge and good technical action may get me back into some Akamai sooner rather than later.

Ultrashort Oil & Gas (DUG): Trading discipline took me out of this one near $30. But this reverse exchange-traded fund has held well even in the face of rising oil prices. That's on my buy list (short position) as well.

Deutsche Bank (DZZ): Dual short on gold is on my list as well - but only as a shorter term technical trade.

Corning (GLW): Still not long here, but the closer it gets to $22.50, the more I like it.

Last but not least: Google (GOOG). I protected some Google gains recently as a trailing stop got triggered closer to the $560s. However, I think Google will hold above $505 - but it may be close. Additionally, I look to make Google a larger long again on a move closer to the $500 level. It's simply amazing to me that one of the best growth stocks in the U.S. (if not the world) is being sold at valuation levels so cheap with multiple revenue stream drivers that they may actually have growth accelerating into the coming quarters/years.

Moreover, once the current market reaction lows are complete I expect Google to start a rally to the low $700s, if not to new highs.
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Positions in JNPR, V, CIEN, GOOG

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