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Florida East Coast - FLA - close: 62.14 change: +1.27 stop: 58.99

Company Description:
Florida East Coast Industries, Inc., (FECI) headquartered in St. Augustine, FL, conducts operations through Flagler Development Group (Flagler) and Florida East Coast Railway, L.L.C. (FECR). (source: company press release or website)

Why We Like It:
The railroad sector is breaking out from a significant consolidation pattern. We want to add exposure to the group and one stock that caught our eye was FLA. The stock has been out performing its peers and consolidating sideways the last few weeks. The recent rally has turned the technical picture bullish and today's 2% gain was a bullish breakout over resistance in the $61.60-61.75 region. Today's gain also produced a new triple-top breakout buy signal on its P&F chart, which now points to a $94 target. We are suggesting longs with FLA above $62.00 although if a dip appears a bounce near $60 could be an attractive entry point. Our target is the $67.00-70.00 range.

Picked on December 05 at $62.14
Change since picked: + 0.00
Earnings Date 02/01/07 (unconfirmed)
Average Daily Volume: 120 thousand


Guitar Center - GTRC - close: 46.40 change: +1.94 stop: 43.99

Company Description:
Guitar Center is the leading United States retailer of guitars, amplifiers, percussion instruments, keyboards and pro-audio and recording equipment. Our retail store subsidiary presently operates more than 195 Guitar Center stores across the United States. In addition, our Music & Arts division operates more than 90 stores specializing in band instruments for sale and rental, serving teachers, band directors, college professors and students. (source: company press release or website)

Why We Like It:
This appears to be a significant bullish breakout in GTRC. The stock has been consolidating mostly sideways for the past couple of months. Today's rally, on above average volume, is a breakout past resistance at $45.00 and its simple and exponential 200-dma. Plus, this is also a bullish breakout over its eighteen-month trendline of resistance (see chart). We are suggesting long positions now although a preferred entry point would be on a dip back near the $45 level, which should now act as support. Please note that the Point & Figure chart displays a potential problem with resistance near $48.00. Our short-term target is the $49.75-50.00 range but more aggressive traders may want to aim higher.

Picked on December 05 at $46.40
Change since picked: + 0.00
Earnings Date 01/31/07 (unconfirmed)
Average Daily Volume: 600 thousand

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