Option Investor
New Plays
HAVING TROUBLE PRINTING?
Printer friendly version
New Plays
Long Plays
Short Plays
ACI None
ASD  
IMCL  

New Long Plays

Arch Coal - ACI - close: 47.50 change: +0.74 stop: 43.74

Company Description:
St. Louis-based Arch Coal is the second largest coal producer in the United States. Through its subsidiary operations in Wyoming, Utah, Colorado, West Virginia, Kentucky and Virginia, Arch Coal provides the fuel for approximately 6% of the electricity generated in the United States. (source: company press release or website)

Why We Like It:
The high-flying coal stocks of April and early May were hit hard with profit taking over the last few weeks. Now that the market is bouncing the oversold bounce in ACI looks like a new entry point to go long. Crude oil over $70 a barrel draws more interest to alternative energy sources. Plus, the coal sector got an upgrade on Friday. ACI received a $66 price target. It is interested to note that the sell-off in ACI dipped just low enough to fill the gap from mid April. Now that shares are bouncing the technical oscillators are improving and the Point & Figure chart is on the verge of a new buy signal. We are suggesting long positions here at $47.50 but more patient traders might want to wait for a dip back toward $45.00 and enter positions there. Our target is the $54.00-55.00 range. However, bear in mind that if ACI tarries too long trying to rally past the $50.00 level we may exit early.

Picked on May 28 at $47.50
Change since picked: + 0.00
Earnings Date 07/21/06 (unconfirmed)
Average Daily Volume: 3.9 million

---

Amer. Std. Co. - ASD - close: 43.30 change: +1.22 stop: 41.49

Company Description:
American Standard is a $10.3 billion global manufacturer with market- leading positions in three businesses: air conditioning systems and services, sold under the Trane and American Standard brands for commercial, institutional and residential buildings; bath and kitchen products, sold under brands such as American Standard and Ideal Standard; and vehicle control systems, including electronic braking and air suspension systems, sold under the WABCO name to the world's leading manufacturers of heavy-duty trucks, buses, SUVs and luxury cars. The company employs approximately 61,000 people and has manufacturing operations in 28 countries. (source: company press release or website)

Why We Like It:
The month of May sell-off pulled ASD all the way back to technical support at its simple 200-dma. It also happens to be near the bottom of its rising channel. The oversold bounce looks like an entry point for new long positions, especially now that the weekly chart has produced a "hammer" pattern candlestick, which is typically seen as a bullish reversal. We are suggesting positions here but you might want to consider waiting for a potential dip back toward $42.50. Our target is the $46.00-47.00 range.

Picked on May 28 at $43.30
Change since picked: + 0.00
Earnings Date 07/19/06 (unconfirmed)
Average Daily Volume: 1.3 million

---

ImClone Sys. - IMCL - close: 40.20 chg: +0.45 stop: 38.74

Company Description:
ImClone Systems Incorporated is committed to advancing oncology care by developing and commercializing a portfolio of targeted biologic treatments designed to address the medical needs of patients with a variety of cancers. The Company's research and development programs include growth factor blockers and angiogenesis inhibitors. ImClone Systems' strategy is to become a fully integrated biopharmaceutical company, taking its development programs from the research stage to the market. (source: company press release or website)

Why We Like It:
The BTK biotech index has produced a very strong oversold bounce with three big days in a row. This has empowered shares of IMCL to rebound from the bottom of its rising channel and challenge resistance at the bottom of its gap down from two weeks ago. There is a clear risk here. IMCL is under resistance at $40.50 and the BTK biotech index is facing resistance at its trendline of lower highs. Therefore we're going to suggest a trigger to go long shares of IMCL at $40.55. More conservative traders may want to wait for a move over $41.00 near the top of its gap down, since it too may offer resistance. Our target is the $44.00 level. The P&F chart points to a $56 target. FYI: IMCL is due to present at an investor conference on May 31st. Plus, it may be noteworthy that IMCL has pretty strong short interest at 12% of its 68.5 million-share float. That's definitely enough to fuel a short squeeze.

Picked on May xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/16/06 (unconfirmed)
Average Daily Volume: 1.6 million
 

New Short Plays

None today.
 

Premier Investor New Play Archives