4 stocks I'm watching on the bounce

 Perched in my ring side seat listening to Dylan sing about a sad eyed lady from the lowlands as the market gets set to open after one hell of a crazy sloppy choppy day yesterday. I am listening to Dylan sing love songs and dreaming about a powerful bounce that will enable lots of money to be made and that money that is made will be racked in and put away and after that bounce happens and it will happen cause it always does and the bottom this current market is making right now is a temporary short term bottom as a new cyclical bear market has begun. The current market is oversold. It ought to bounce. Looking for this shadow bounce to occur. I am playing it and am more then full. Full in stocks that are in good shape technically. Perched up high above the crowd down on the street below enables objectivity and flexibility. I am objective flexible and focused on one specific intention and that is to make money. That is all I care about when I am perched high above the crowd in the Eagles Nest. The futures are positive right now. Europe turned and reversed course and perhaps the reversal experienced over there will enable the bulls to come out of the corner and get into the game. The big boys are cautious. The big boys armed with the big bucks are sitting idly by watching the bears squeeze some of the life out of it and they will not sit back and do nothing for long.

It is my intention to sell short into the bounce that will occur as the SPX and NASDAQ held important lines of support yesterday as a modest reversal at the close restored a bit of confidence. Bulls are rattled and bears are flexing and clawing and hugging in the capability to take your breath away. Bulls are dizzy and nauseous and wounded and dangerous. I am playing for a bounce. If NASDAQ closes below 2150 coupled with an SPX close below 1250 the current decline will get more serious and I will be compelled to sell. That is the stop I have on the market and it is on a closing basis. Now let’s get into some of the stocks I am playing to take advantage of the phantom bounce coming:

Micron Technology (MU | Quote | Chart | News | PowerRating) 15.46

I have a large position in this stock and am going to sell a large portion of it in to strength as it is bound to test the recent highs made and not do much more then that till later this year and into next. I am playing MU to bounce into the 17 zone. That will happen if the stock closes above its 50 day line over the next tow sessions. The 50 day line is 15.72. It has good support at 15. It is a timely stock to play on a bounce because it is in good shape technically. It is in a modest intermediate term slump. It is oversold. Place the stop under 15.

Free Scale Semiconductor (FSL | Quote | Chart | News | PowerRating) 30.09

This is the best of the best relative to large cap semi conductor exposure. The semi stocks came in hard. FSL is in the midst of a modest bounce after sliding to 29 and change adjusting an extended condition after rising to new all time high points in the beginning of May. It corrected more then 10%. It still trades above its 50 and 200 day lines and is out performing the market. FSL is up slightly in the last 5 days out performing most of its peers in the space. FSL is up close to 20% this year and down over 10% since 5/5/06 it is a timely buy for a bounce up to 33.

Delmonte Foods (DLM | Quote | Chart | News | PowerRating) 11.83

Do you think I am just into tech stocks? Wrong? I am across the board and involved in individual issues that show a rising trend. DLM is a conservative play. It is in a quiet up trend. It is not a sexy stock. Forget about that. It is just trading up on all cylinders right now and is actually up over the last 5 days. A rise above 12.20 on a closing basis and it miss good bye Charlie. It is at that point when pyramiding the shears is appropriate. I have a big position in DLM and a close above 12.20 and the position will grow. This is a low risk try with a stop at 10.89 for investors and 10.49 for a swing.

Lexmark (LXK | Quote | Chart | News | PowerRating) 53.56

Any one manages to take some of this down yesterdays? I imaged to add a tiny piece to an already existing position and was my best performer yesterday and ought to take off form current levels if this market rallies. It is my best stock right now. It is the best of the best right now. It pooped yesterday. If you own the stock you know what I mean. The stock easily tests 60 where it runs into trouble. Lots of congestion in the 60 zone. It is a timely buy.

It is time for the best part of the day. I am listening to the Stones sing hopeful love songs. The Stones are bullish. Always have been. Bullish rhythms and that is just the ticket necessary to get the bulls off the dime and get the blood flowing and get back into the game and take those big bad ugly dancing bears and drive them out with a little rock and roll to distract them and tire them out so that the tight grip may loosen and the ones that got caught napping and that includes yours truly may find and graceful and profitable exit. The intention is to sell short those issues that express a declining trend into the coming bounce. Now as I sit back with a warm cup a tea with a chunk a lemon to enhance and uplift the senses and get ready to walk down that lane just east of Trinity Church yes walk down the lane where the best of intentions may be squashed. At the end of the lane there is a church to pray in and a cemetery to rest. Right now I am perched high above the crowd looking down at all the dreamers heading into the street of dreams to try another time to achieve the stated intention and objective and that is to make money.

Jack S. Rothstein
Rothstein Asset Management, L.P.
3600 Chain Bridge Road, Suite 200
Fairfax VA 22030
Phone 888-343-4825 -- Fax 703-385-7232
Email: Jack@ramhedge.com  Jrothstein@jrmoney.com
Web: RAMhedge.com