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New Plays
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KSU SIF
LFC  
SPN  
TMO  

New Long Plays

Kansas City Southern - KSU - cls: 38.81 chg: +0.45 stop: 37.75

Company Description:
Headquartered in Kansas City, Mo., KCS is a transportation holding company that has railroad investments in the U.S., Mexico and Panama. Its primary U.S. holding includes KCSR, serving the central and south central U.S. Its international holdings include Kansas City Southern de Mexico, S. de R.L. de C.V., serving northeastern and central Mexico and the port cities of Lazaro Cardenas, Tampico and Veracruz, and a 50 percent interest in Panama Canal Railway Company, providing ocean-to-ocean freight and passenger service along the Panama Canal. KCS' North American rail holdings and strategic alliances are primary components of a NAFTA Railway system, linking the commercial and industrial centers of the U.S., Canada and Mexico. (source: company press release or website)

Why We Like It:
Railroad stocks are ticking higher again and if crude oil continues to climb the railroads should continue to see buying interest. More aggressive traders might want to consider buying the Friday bounce in KSU. We are suggesting that readers wait for a breakout over resistance at $39.50 first. Our suggested entry point to buy the stock is at $39.61. More conservative traders could even wait for a rally past potential round-number resistance at $40.00. If we are triggered at $39.61 then our target is the $43.50-44.00 range. Currently the P&F chart points to a $45 target.

Picked on May xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/26/07 (unconfirmed)
Average Daily Volume: 716 thousand

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China Life Ins. - LFC - cls: 50.27 chg: +3.47 stop: 46.74

Company Description:
Founded in 1949 and headquartered in Beijing, the China Life Insurance company provides multiple lines of insurance and annuities.

Why We Like It:
Many of you have already heard that fueling the rally on Friday was news that the Chinese government has relaxed their requirements on allowing Chinese banks to invest in overseas equity markets. This accounted for a 7.4% rally in shares of LFC and a bullish breakout from its four-week consolidation pattern and through resistance at the $50.00 level. We normally do not like to chase a big move like Friday's rally in LFC. However, this appears to be a unique event and LFC appears to have started a new leg higher. We are suggesting long positions now. It is up to the individual trader if they want to chase it here or wait for a potential dip back into the $49-48.50 zone. We're putting our stop under Thursday's low. Our target is the January 2007 highs in the $57.00-57.50 range. FYI: The P&F chart has produced a new triple-top breakout buy signal. The chart pattern points to a $70 target.

Picked on May 13 at $50.27
Change since picked: + 0.00
Earnings Date 08/25/07 (unconfirmed)
Average Daily Volume: 1.2 thousand

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Superior Energy - SPN - cls: 38.42 chg: +1.84 stop: 35.99

Company Description:
Superior Energy Services, Inc. serves the drilling-related needs of oil and gas companies primarily through its rental tools segment and the production-related needs of oil and gas companies through its well intervention, rental tools and marine segments. The Company uses its production-related assets to enhance, maintain and extend existing production and, at the end of a property's economic life, plug and abandon wells and decommission platforms and structures. Superior also owns and operates mature oil and gas properties in the Gulf of Mexico.
(source: company press release or website)

Why We Like It:
Oil services stocks were big winners on Friday. The OSX index rose almost 3% and back toward record highs. Shares of SPN out performed its peers with a 5% gain on above average volume. The move looks like a breakout from its trading range and if you squint hard enough it also looks like a breakout from an inverse head-and-shoulders pattern (see an intraday chart). We're suggesting long positions here. Readers can choose to wait for a new high over $38.50 or look for a dip back into the $37.75-38.00 zone. Our target is the $42.50 level. The P&F chart is very bullish with a $65 target.

Picked on May 13 at $38.42
Change since picked: + 0.00
Earnings Date 08/01/07 (unconfirmed)
Average Daily Volume: 1.5 million

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Thermo Fisher - TMO - close: 53.63 change: +1.58 stop: 51.75

Company Description:
Thermo Fisher Scientific Inc. is the world leader in serving science, enabling our customers to make the world healthier, cleaner and safer. With an annual revenue rate of more than $9 billion, we employ 30,000 people and serve over 350,000 customers within pharmaceutical and biotech companies, hospitals and clinical diagnostic labs, universities, research institutions and government agencies, as well as environmental and industrial process control settings. Serving customers through two premier brands, Thermo Scientific and Fisher Scientific, we help solve analytical challenges from routine testing to complex research and discovery. (source: company press release or website)

Why We Like It:
Investors applauded the recent earnings report from TMO. You can see the reaction with the big April 26th rally. Shares have spent the last three weeks consolidating those gains and now we're seeing signs of a new rally forming. Shares rebounded sharply from the bottom of its current trading range on big volume. We are suggesting long positions now although we admit that this is an aggressive entry point. Readers can choose to wait for a breakout over resistance at $54.00 first or wait for a dip back towards $52.00 as alternative entries. We are aiming for the $59.00-60.00 range. The P&F chart points to a $76 target.

Picked on May xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/26/07 (confirmed)
Average Daily Volume: 3.0 thousand
 

New Short Plays

Sifco Industries - SIF - cls: 17.70 chg: +7.98 stop: 19.01

Company Description:
SIFCO Industries, Inc. ("Company") is engaged in the production and sale of a variety of metalworking processes, services and products produced primarily to the specific design requirements of its customers. The processes and services include forging, heat-treating, coating, welding, machining and selective electrochemical finishing. The products include forgings, machined forged parts and other machined metal parts, remanufactured component parts for turbine engines, and selective electrochemical finishing solutions and equipment. The Company's operations are conducted in three business segments: (1) Aerospace Component Manufacturing Group, (2) Turbine Components Services and Repair Group, and (3) Applied Surface Concepts Group. (source: company press release or website)

Why We Like It:
Shares of SIF truly exploded higher on Friday. The market was reacting to the company's latest earnings report where SIF turned in profits that were approaching three times the estimates. Volume on Friday was about 20 times the daily average. We're not going to discuss fundamentals here. The stock is technically overbought after Friday's 82% gain. We do want to warn you that this is a very speculative, high-risk play. While we did not see a lot of short interest in the stock prior to SIF we won't be the only ones suggesting a short. You could try and short it with a stop loss just above Friday's high. We are willing to give SIF some room to maneuver so we'll put the stop at $19.01. Our target is the $14.00-12.00 range.

Picked on May 13 at $17.70
Change since picked: + 0.00
Earnings Date 04/27/07 (unconfirmed)
Average Daily Volume: 30 thousand
 

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