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FBP BLL

New Long Plays

First Bancorp - FBP - close: 40.37 chg: -1.05 stop: 37.00

Company Description:
With $17.4 billion in assets, First BanCorp is the second largest Financial Holding Company in Puerto Rico. It is the parent company of FirstBank Puerto Rico, a state chartered commercial bank in Puerto Rico, the Virgin Islands and Florida; of FirstBank Insurance Agency; and Ponce General Corporation. First BanCorp, FirstBank Puerto Rico and UniBank all operate within U.S. banking laws and regulations. The Corporation operates a total of 129 financial service facilities throughout Puerto Rico, the U.S. and British Virgin Islands, and Florida. On October 1, 2004, the Bank opened a loan office in Coral Gables, Florida. Among the subsidiaries of FirstBank Puerto Rico is Money Express, a finance company; First Leasing and Car Rental, a car and truck rental leasing company; and FirstMortgage, a mortgage banking company. In the U.S. and British Virgin Islands, the Bank operates FirstBank Insurance VI, an insurance agency; First Trade, Inc., a foreign corporation management company; and First Express, a small loan company. (source: company press release)

Why We Like It:
We like FBP because the stock is a great technical bounce play. The stock is extremely oversold with the first four months of 2005 completely erasing its 2004 gains. The stock has been declining in a very narrow channel but shares just recently broke out above resistance at its trendline of lower highs and at the $40.00 mark. We also notice that there has been a lot of volume over the last few days suggesting accumulation from large investors (like fund managers). We like the pull back toward $40.00 today and suggest using it as a bullish entry point. However, there is a chance that FBP could pull back even further toward the $39.00 or $38.50 region. Patient traders can wait for a possible dip but look for signs of a bounce before initiating positions. The P&F chart has already reversed from a sell signal into a new buy signal with a $58.00 target. Our six to eight week target is the $45.00 level.

Picked on May 05 at $40.37
Change since picked: + 0.00
Earnings Date 04/19/05 (confirmed)
Average Daily Volume: 280 thousand
 

New Short Plays

Ball Corp - BLL - close: 38.98 chg: -0.81 stop: 41.01

Company Description:
Ball Corporation is a supplier of metal and plastic packaging products, primarily for the beverage and food industries. The company also owns Ball Aerospace & Technologies Corp., which develops sensors, spacecraft, systems and components for government and commercial markets. Ball Corporation employs more than 13,200 people and reported 2004 sales of $5.4 billion. (source: company press release)

Why We Like It:
Unlike most of the market shares of BLL were showing relative strength through the second half of January through early March. Yet all of that changed when BLL began to slide in late March through the first half of April. The stock broke down through support near $40.00 and technical support at its 200-dma's. The decline also broke down through BLL's nearly two-year up trend. Since then BLL's attempt at an oversold bounce failed near the $41.00 level and its 200-dma. This failed rally-bearish reversal suggests that the downside is not over yet for BLL. Looking at the Point & Figure chart we see that the stock has reversed into a sell signal pointing to a $31.00 target. Bears could also be attracted to BLL's bearish reversal today. The stock tried to push through its exponential 200-dma near $40.30 today but failed. Shares reversed course after this morning's strength and the stock lost more than two percent on heavy volume. We want to use today's reversal as a short-term bearish entry point. We suggest shorting BLL here with a target in the $35.00-34.00 range.

Picked on May 05 at $38.98
Change since picked: - 0.00
Earnings Date 04/28/05 (confirmed)
Average Daily Volume: 611 thousand
 

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