Option Investor
New Plays
Printer friendly version

New Long Plays

ALON USA Ener. - ALJ - close: 29.64 chg: +0.74 stop: 27.75

Company Description:
Alon USA Energy, Inc., headquartered in Dallas, Texas, is an independent refiner and marketer of petroleum products, operating primarily in the Southwestern and Western regions of the United States. (source: company press release or website)

Why We Like It:
We recently closed all of our bullish oil plays due to the weakness in crude oil futures this past week. Yet not all oil stocks are moving lower. Shares of ALJ have ignored weakness in crude oil and continued to consolidate under resistance at $30.00 with a bullish trend of higher lows. Shares look poised to breakout over $30.00, especially have Friday's rally. We're suggesting a trigger to go long the stock at $30.15. If triggered our target is the $33.50-34.00 range. Be aware that the 100-dma near $32 might offer some resistance. FYI: The P&F chart is still bearish after the August-September sell-off.

Picked on November xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 11/07/06 (confirmed)
Average Daily Volume: 504 thousand


Cameco - CCJ - close: 32.78 change: +1.18 stop: 30.89

Company Description:
Cameco, with its head office in Saskatoon, Saskatchewan, is the world's largest uranium producer. The company's uranium products are used to generate electricity in nuclear energy plants around the world, providing one of the cleanest sources of energy available today. (source: company press release or website)

Why We Like It:
The weekly chart for CCJ shows that the stock has broken its long-term up trend. However, that doesn't mean the stock won't produce some trade-worthy rallies. This is an aggressive play given our entry point. Shares have recently been weak but Friday's session produced a bullish engulfing candlestick pattern. These patterns are typically seen as one-day reversals, especially at the bottom of a move down. We're suggesting longs on the reversal. However, if CCJ doesn't confirm the reversal with a gain in the next day or two we'll quickly abandon the play. We'll start the play with a stop under Friday's low. Our short-term target is the $35.00-36.00 range.

Picked on November 19 at $32.78
Change since picked: + 0.00
Earnings Date 10/31/06 (confirmed)
Average Daily Volume: 2.5 million


Worthington Ind. - WOR - close: 17.96 chg: +0.26 stop: 17.39

Company Description:
Worthington Industries is a leading diversified metal processing company with annual sales of approximately $3 billion. (source: company press release or website)

Why We Like It:
Several iron and steel-related stocks displayed relative strength on Friday thanks to new rumors and talk of potential M&A activity. We're not saying WOR is a buyout target but strength in the sector certainly doesn't hurt. What we do like about WOR is how shares have begun to bounce back from the bottom of a wide trading range (approximately $16-21). This past week saw WOR breakout over technical resistance at its 50-dma and shares are challenging resistance near $18.00. More conservative traders may want to wait for a rise past $18 or last week's high ($18.17) before initiating positions. Traders should also be aware that the 200-dma near $19.00 might offer some resistance. Our target is the $19.85-20.00 range. FYI: The P&F chart points to a $31 target.

Picked on November 19 at $17.96
Change since picked: + 0.00
Earnings Date 12/26/06 (unconfirmed)
Average Daily Volume: 868 thousand

New Short Plays

None today.

Premier Investor New Play Archives