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New Long Plays

Ingersoll-Rand - IR - close: 40.20 chg: +0.66 stop: 37.99

Company Description:
Ingersoll Rand is a leading diversified industrial company providing products, services and integrated solutions to industries ranging from transportation and manufacturing to food retailing, construction, and agriculture. (source: company press release or website)

Why We Like It:
It has taken IR a couple of months but the stock finally broke out through resistance in the $39.00-40.00 region, which also included technical resistance at its 100-dma and exponential 200-dma. The stock's relative strength on Friday (+1.66%) helped the weekly chart's MACD indicator produce a new buy signal. Industrial-related stocks are showing leadership recently so we expect IR to see some follow through next week. We do not want to hold over the October 27th earnings report so our short-term target is the $43.00-43.50 range. We'll raise our stop loss once we see IR push past potential overhead resistance at its 200-dma near 40.75.

Picked on October 08 at $40.20
Change since picked: + 0.00
Earnings Date 10/27/06 (confirmed)
Average Daily Volume: 2.8 million

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Kinetic Concepts - KCI - cls: 33.35 chg: +1.52 stop: 30.99

Company Description:
Kinetic Concepts, Inc. is a global medical technology company with leadership positions in advanced wound care and therapeutic surfaces. We design, manufacture, market and service a wide range of proprietary products that can improve clinical outcomes while helping to reduce the overall cost of patient care. Our advanced wound care systems incorporate our proprietary V.A.C. technology, which has been clinically demonstrated to help promote wound healing and can help reduce the cost of treating patients with serious wounds. (source: company press release or website)

Why We Like It:
Last August shares of KCI were cut in half after the company lost some legal battles on its patent infringement case versus a rival's product. Since then shares have seen a sharp rebound that turned sideways in September. Now after a month of consolidating sideways the stock is breaking out higher again. Friday's rise pushed through resistance in the $32.00-32.50 region and technical resistance at its 50-dma. The rally on Friday also produced a new Point & Figure chart buy signal that points to a $42 target. We think KCI can trade toward the late May lows, which as support will probably act as resistance and this area also coincides with the 200-dma. We'll set a target in the $37.50-38.00 range. Be advised that the $35.00 mark might offer some resistance as well at least on the initial test of that level. We do not want to hold over the late October earnings report.

Picked on October 08 at $33.35
Change since picked: + 0.00
Earnings Date 10/30/06 (unconfirmed)
Average Daily Volume: 1.4 million

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Acc. Home Lenders - LEND - cls: 36.53 chg: +0.70 stop: 34.95

Company Description:
Accredited Home Lenders Holding Co. is a mortgage company operating throughout the U.S. and in Canada. Accredited originates, finances, securitizes, services, and sells non-prime mortgage loans secured by residential real estate. Founded in 1990, the company is headquartered in San Diego. (source: company press release or website)

Why We Like It:
Anything related to homes and mortgages has been beat up for months but it looks like shares of LEND may have turned the corner. The stock's bounce from its August lows flattened out in the middle of September. Since then the stock has been consolidating sideways in a $34.00-37.00 trading range. Friday's show of relative strength was encouraging with a breakout past the 50-dma. However, we want to see a breakout past the top of its trading range. Therefore we're suggesting a trigger to go long the stock at $37.16. If triggered our target is the $42.00-42.50 range. Please note that there is potential resistance at the bottom of its gap down at $38.71, and potential resistance at $40.00. The P&F chart is positive with a $50 target. We do not want to hold over the late October earnings report.

Picked on October xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/31/06 (unconfirmed)
Average Daily Volume: 759 thousand
 

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