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  MTSC

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New Short Plays

Phazar Corp. - ANTP - close: 8.68 change: -0.24 stop: 9.27

Company Description:
PHAZAR CORP is a publicly owned company that operates as a holding company with Antenna Products Corporation and Phazar Antenna Corp. as wholly owned subsidiaries. Antenna Products Corporation is an operating subsidiary that designs, manufactures, and markets antenna systems, towers, and communication accessories worldwide. (source: company press release or website)

Why We Like It:
It has been a while since we have played ANTP on the Premier Investor newsletter. We've been keeping an eye on the stock. Shares have produced a very bearish pattern of lower highs and it looks like ANTP might be ready to breakdown under significant support in the $8.55-8.65 range. Before we continue we have to warn readers that this is an aggressive play. ANTP can be volatile and the most recent data puts short interest at over 10% of the 2.1 million-share float. That's a relatively high degree of shorts and a very, very small float. To make this play even higher risk we cannot find the company's next earnings report. Last year they reported in August so it stands to reason that they might report again in early August. We are going to suggest a trigger at $8.49 to short the stock. If triggered our target will be the $7.00-6.75 range.

Picked on July xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 08/04/06 (unconfirmed)
Average Daily Volume: 89 thousand

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MTS Systems - MTSC - close: 34.19 change: -1.23 stop: 37.05

Company Description:
MTS Systems Corporation is a leading global supplier of test systems and industrial position sensors. The Company's testing hardware and software solutions help customers accelerate and improve their design, development, and manufacturing processes and are used for determining the mechanical behavior of materials, products, and structures. MTS' high-performance position sensors provide controls for a variety of industrial and vehicular applications. (source: company press release or website)

Why We Like It:
A number of the scientific and technical instrument companies have been breaking down recently. One of them is MTSC, which just broke support at the $35.00 level today on strong volume. The technical picture is bearish with the MACD producing a new sell signal two days ago. As a matter of fact the technical picture almost looks too bearish and MTSC does look short-term oversold with its drop from the $40 region. We are going to suggest shorts with MTSC under $35.00 but more patient traders may want to wait and see if MTSC produces any sort of oversold bounce first. Both the $35.00 level and the $36.00 level should offer some overhead resistance so a failed rally near either could work as a new entry point. We would definitely be cautious about opening new plays if the major averages are positive tomorrow. The weekly chart shows MTSC breaking down under long-term support and the Point & Figure chart shows MTSC breaking support as well with a $21 target. We're going to aim for a decline into the $31.00-30.00 range. We do not want to hold over the July 26th earnings report. FYI: the latest data puts short interest at 4% of the stock's 18 million-share float.

Picked on July 17 at $34.19
Change since picked: + 0.00
Earnings Date 07/26/06 (confirmed)
Average Daily Volume: 105 thousand
 

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