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  TIE

New Long Plays

None today.
 

New Short Plays

Par Pharma. - PRX - close: 29.96 chg: -1.46 stop: 32.01

Company Description:
Par Pharmaceutical Companies, Inc. develops, manufactures and markets generic pharmaceuticals through its principal subsidiary, Par Pharmaceutical, Inc., and its recently acquired subsidiary, Kali Laboratories, Inc. The company also is developing an additional line of branded pharmaceutical products for specialty markets, the first of which is Megace ES. Par currently manufactures, markets or licenses 90 prescription drugs. (source: company press release or website)

Why We Like It:
The outlook for PRX looks pretty dim if you're scanning its daily chart. Shares are seriously under performing both the DRG drug index and the BTK biotech index. The stock has been declining for months after it peaked in December-January. Now after six to eight weeks of trying to breakout over the $33.00-33.50 region it looks like PRX is ready for its next leg down. Today's above-average volume decline below last month's low and round-number (psychological) support at the $30.00 mark looks like a new bearish entry point. Technically, as you might expect, PRX looks pretty bearish with oscillators pointing lower and its MACD in a new sell signal. There is potential support at the May low near $29 but we suspect PRX will break it. The Point & Figure chart is very bearish and points to a $20.00 target. Our plan is to see how far PRX can fall before its July 28th earnings report (unconfirmed date). For now we'll set our target in the $27.00-26.50 range.

Annotated chart:

Picked on July 14 at $29.96
Change since picked: + 0.00
Earnings Date 07/28/05 (unconfirmed)
Average Daily Volume: 661 thousand

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Titanium Metals - TIE - close: 57.75 chg: -5.57 stop: 62.51

Company Description:
TIMET, headquartered in Denver, Colorado, is a leading worldwide producer of titanium metal products. (source: company press release or website)

Why We Like It:
This one is for aggressive players only. Normally we strongly recommend against trying to pick a top in stocks, especially when they've shown so much relative strength like TIE. However, today's high-volume sell-off broke round-number support at the $60.00 level and technical support at the simple 10-dma. The 10-dma has been rising support for the last two months. We know that some of the most dangerous words when trading stocks are "this time it's different". Yet we suspect with the major averages overbought and extended and with TIE overbought and extended that this sell-off could be the beginning of a deeper consolidation at least for another day or two. The risk-reward ratio here isn't that great. We're using a stop at $62.51 because we assume a potential bounce back toward the $60.00 level tomorrow. Our target is the $52.50-50.00 range. Our plan is that if TIE doesn't confirm the reversal tomorrow (or maybe Monday) we'll quickly jump out of the play. Traders may want to keep in mind that TIE has a pretty small float of less than 7 million shares.

Annotated chart:

Picked on July 14 at $57.75
Change since picked: + 0.00
Earnings Date 08/01/05 (unconfirmed)
Average Daily Volume: 202 thousand
 

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