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New Long Plays

Foundation Coal - FCL - cls: 31.94 change: +0.74 stop: 30.59

Company Description:
Foundation Coal Holdings, Inc., through its affiliates, is a major U.S. coal producer with 14 coal mines and related facilities in several states including Pennsylvania, West Virginia, Illinois, and Wyoming. Through its subsidiaries, Foundation Coal employs approximately 3,000 people and produces approximately 70 million tons annually, largely for utilities generating electricity. (source: company press release or website)

Why We Like It:
Coal stocks were marching higher on Friday as investors responded well to an earnings report from Massey Energy (MEE). We like FCL as a bullish candidate as the stock appears to have formed a new bottom with the consolidation near $30.00 and recently the breakout from its trading range. Technicals are naturally turning higher. More aggressive traders may want to buy the stock now or on a dip near $31.00. We are suggesting a trigger at $32.11 to catch a breakout over short-term support at the $32.00 level. If triggered our target is the $34.75-35.00 range. Keep a wary eye on the 50-dma near $33.60 as potential resistance. Aggressive traders might want to put their stop under $30.00. We are going to set our stop at $30.59, which is under last week's low. We do not want to hold over the February 7th earnings report (still unconfirmed).

Picked on January xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/07/07 (unconfirmed)
Average Daily Volume: 771 thousand

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PeopleSupport - PSPT - close: 23.24 change: +0.54 stop: 20.99

Company Description:
PeopleSupport, Inc., is a leading offshore business process outsourcing (BPO) provider that offers customer management, transcription and captioning and additional BPO services from its centers in the Philippines, Costa Rica and United States. A majority of PeopleSupport's services are performed in the Philippines. Headquartered in Los Angeles, California, and with approximately 7,800 employees worldwide, PeopleSupport serves clients in a variety of industries, such as travel and hospitality, financial services, technology, telecommunications, consumer products, healthcare and insurance, law enforcement, entertainment and education. (source: company press release or website)

Why We Like It:
The bulls definitely appear in control with PSPT. Shares are climbing to new all-time highs and pretty much ignored the market volatility last week. There is a bullish trend of higher lows as traders step in to buy the dip. Early January saw a sell-off and a bearish breakdown but bulls jumped in to buy the dip near its 100-dma and the move produced a sharp bullish reversal easily seen on the weekly chart. Broken resistance in the $22.00-22.50 region should now offer new support. We are suggesting long positions with PSPT above $22.00. Our target is the $26.00 level. We do not want to hold over the early March earnings report. FYI: More conservative traders might consider a tighter stop under $21.50 or under $22.00.

Picked on January 28 at $23.24
Change since picked: + 0.00
Earnings Date 03/07/07 (unconfirmed)
Average Daily Volume: 295 thousand
 

New Short Plays

Teledyne Tech - TDY - close: 37.80 change: -1.03 stop: 40.35

Company Description:
Teledyne Technologies is a leading provider of sophisticated electronic components, instruments and communication products, systems engineering solutions, aerospace engines and components, and on-site gas and power generation systems. Teledyne Technologies has operations in the United States, the United Kingdom, Mexico and Canada. (source: company press release or website)

Why We Like It:
TDY recently reported earnings. The company's results were better than expected but management issued an earnings warning for the first quarter. The stock was already struggling with a bearish trend of lower highs. This negative earnings news might be the spark needed to push the stock into a new full-fledged bearish trend. The results came out on Thursday and TDY dipped under the 200-dma and support in the $38.00-38.50 region. There was no follow through on the bounce and Friday saw a failed rally at $39.58 and a close under its 200-dma on big volume. We are suggesting shorts with TDY under $38.40. There might be potential support at the top of its July 2006 gap near $35.85 but we're going to aim for the $34.25-34.00 range. The P&F chart has a new triple-bottom breakdown sell signal with a $33 target. FYI: The latest (January) data has short interest at 3.7% of the company's 31.3 million-share float.

Picked on January 28 at $37.80
Change since picked: + 0.00
Earnings Date 01/25/07 (confirmed)
Average Daily Volume: 197 thousand
 

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