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New Plays
Long Plays
Short Plays
MT BCE
STLD  

New Long Plays

Mittal Steel - MT - close: 34.60 chg: +0.35 stop: 32.49

Company Description:
Mittal Steel is the world's largest and most global steel company. The company has operations in twenty-seven countries, on five continents. Mittal Steel encompasses all aspects of modern steelmaking, to produce a comprehensive portfolio of both flat and long steel products to meet a wide range of customer needs. It serves all the major steel consuming sectors, including automotive, appliance, machinery and construction. (source: company press release or website)

Why We Like It:
Steel stocks are on the move higher again. Stocks in this sector have been consolidating flat to down the last month or two but recently we're seeing an industry wide rally. Some of the companies are raising their prices, which naturally tends to help out earnings. The sector failed to react to an analyst downgrade just a couple of days ago. MT looks like a tempting bullish candidate. The stock has rallied right to resistance after breaking out above its 100-dma this past week. We want to be ready to catch any breakout above resistance at the $35.00 level. Therefore we're suggesting a trigger to go long the stock at $35.26. If triggered our target is the $39.50-40.00 range. We do not want to hold over the early November earnings report. FYI: The Point & Figure chart is bullish with a $47 target. Plus, readers will note that we're adding two stocks in the steel sector today. We would suggest you only pick one of them to trade.

Picked on September xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 11/01/06 (unconfirmed)
Average Daily Volume: 3.2 million

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Steel Dynamics - STLD - close: 54.48 change: +1.69 stop: 49.99

Company Description:
Steel Dynamics, Inc. (SDI) is the nations fifth largest producer of carbon steel products, based on production capacity. Annual revenues exceed $2 billion, with annual shipments at a rate surpassing 4 million tons per year. SDI employees number about 3,300. SDI is among the most profitable American steel companies in terms of profit margins and profits per ton. (source: company press release or website)

Why We Like It:
We are switching directions on STLD. This past month we completed a successful short play on the stock when shares traded near psychological support at $50 and technical support at its 200-dma. Since then STLD has seen a significant bounce higher. Now, not only is STLD bouncing from support, but it also looks like the whole steel sector is gaining ground. Friday's rally in STLD helped confirm the stock's breakout over resistance at its two-month trendline of lower highs. We are going to suggest longs at current levels or on a dip back towards $52.50. However, more conservative traders may want to seriously consider waiting for a rise past potential resistance at the $55.00 mark before initiating plays. Our target is the $59.00-60.00 range. We do not want to hold over the October earnings report. Readers will note that we're adding two stocks in the steel sector today. We would suggest you only pick one of them to trade.

Picked on September 03 at $54.48
Change since picked: + 0.00
Earnings Date 10/19/06 (unconfirmed)
Average Daily Volume: 1.5 million
 

New Short Plays

BCE Inc. - BCE - close: 24.73 change: -0.26 stop: 25.26

Company Description:
BCE is Canada's largest communications company. Through its 28 million customer connections, BCE provides the most comprehensive and innovative suite of communication services to residential and business customers in Canada. (source: company press release or website)

Why We Like It:
This is a simple trading range play. You might call it a channeling stock or rolling stock. BCE has been stuck in a trading range between the $25 region and the $22.50 region for months. The stock just spent the last week testing and failing at resistance near the top of the range. Friday saw BCE breakdown under its 10-dma and short-term trend of higher lows on above average volume. This looks like an entry point to short BCE with a stop above the top of its trading range (25.26). Our target is not the far edge of its range but what looks like intermediate support at $23.25. We'll actually use a target range of $23.35-23.25.

Picked on September 03 at $24.73
Change since picked: + 0.00
Earnings Date 11/01/06 (unconfirmed)
Average Daily Volume: 225 thousand
 

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