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WPSC CSCO
  NYT

New Long Plays

Wheeling-Pittsburgh - WPSC - cls: 40.07 chg: +2.22 stop: 35.95

Company Description:
Wheeling-Pittsburgh Steel Corporation is a metal products company with approximately 3,100 employees. It has facilities in Steubenville, Mingo Junction, Yorkville and Martins Ferry, OH; Beech Bottom and Follansbee, WV; and Allenport, PA. (source: company press release)

Why We Like It:
If you haven't noticed yet almost the entire iron and steel industry has seen their stocks breaking out and hitting new relative highs in the last few days. WPSC is one such stock with shares cracking round-number, psychological resistance at the $40.00 mark on Friday. If you read Barron's you may have noted the article a couple of weeks ago discussing the rosy future for WPSC and Wall Street's expectations that the company is a potential takeover target. The company issued a press release too stating that stronger demand would improve its results. Bulls should like the strong and steady climb higher and shares just recent bounced from its rising trendline of support. The P&F chart shows a new double-top breakout buy signal with a $51 target. We want to target a move into the $44-45 range. We are starting the play with a stop a little bit wider than we'd like and true support is closer to the $35 level. Conservative traders can wait for some confirmation. More aggressive types can hope for a dip and buy the bounce from $38.00. FYI: be aware that we could not confirm an earnings date. The best information would could find suggest WPSC reports in mid-March. Once a date is secured we'll plan to exit before its earnings announcement.


 

Picked on February 20 at $40.07
Gain since picked: + 0.00
Earnings Date 03/14/05 (unconfirmed)
Average Daily Volume: 122 thousand

New Short Plays

Cisco Systems - CSCO - close: 17.30 chg: -0.15 stop: 18.26

Company Description:
Cisco Systems, Inc., the worldwide leader in networking for the Internet, celebrates 20 years of commitment to technology innovation, industry leadership, and corporate social responsibility. (source: company press release)

Why We Like It:
We normally hesitate to suggest shorts on CSCO because there is such a huge fan base for the stock even though the share price is light years from where it was in the bubble days and almost half what it was in early 2004. The trend of lower highs has prevailed ever since its 2004 peak and now after more than six months of consolidating above the $17.50 level the stock is breaking down for what looks like another leg lower. While technicals are negative and its MACD has produced a new sell signal we really like the P&F chart and its new quadruple-bottom breakdown sell signal with a $14.50 target. Our target is the $15.00 level, which is bound to be round-number support. Our time frame is six to eight weeks.


 

Picked on February 20 at $17.30
Gain since picked: - 0.00
Earnings Date 01/27/05 (confirmed)
Average Daily Volume: 61.1 million

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NY Times - NYT - close: 37.20 chg: -1.05 stop: 38.61

Company Description:
The New York Times Company, a leading media company with 2004 revenues of $3.3 billion, includes The New York Times, the International Herald Tribune, The Boston Globe, 16 other newspapers, eight network-affiliated television stations, two New York City radio stations and more than 40 Web sites, including NYTimes.com and Boston.com. For the fourth consecutive year, the Company was ranked No. 1 in the publishing industry in Fortune's 2004 list of America's Most Admired Companies. The Company's core purpose is to enhance society by creating, collecting and distributing high-quality news, information and entertainment. (source: company press release)

Why We Like It:
Shares of NYT have been struggling for months with a steady trend of lower highs. The challenge of shareholders now is that the consolidation above the $38.00 level has now broken down and on big volume. Of course the volume was sparked by news Thursday night that NYT will purchase About.com for $410 million. Most seem to agree that NYT's expansion of its Internet presence is a good thing but that the deal was too expensive. We're focusing on the technical breakdown with the new MACD sell signal and the P&F chart with its sell signal and $28 target. We suspect that NYT will drift toward the $32.50-33.50 range before finding significant support so this region will be our target. Patient traders may want to wait and see if NYT bounces a little. Then readers could short a failed rally under $38.00. Our time frame is six to eight weeks.


 

Picked on February 20 at $37.20
Gain since picked: - 0.00
Earnings Date 01/25/05 (confirmed)
Average Daily Volume: 516 thousand

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