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New Plays
Long Plays
Short Plays
ARA ADM
CIT  
FMX  
PNK  
RTN  
SM  
TRMA  

Play Editor's Note: The S&P 500, DJIA and Russell 2000 are hitting new all-time highs. Investors don't seem to care that the markets are overbought and way overdue for a correction. We are adding new bullish positions given the trend but we continue to urge caution for traders. We could see a correction at any time and the correction is so overdue it will be painful when it appears. Watch your stop losses carefully and make sure they are in place.


New Long Plays

Aracruz Celulose - ARA - cls: 62.00 chg: +1.83 stop: 57.99

Company Description:
Aracruz Celulose is a Brazilian company, the world's leading producer of bleached eucalyptus pulp. It is responsible 27% of the global supply of the product, used to manufacture printing and writing, tissue, and high value added specialty papers. (source: company press release or website)

Why We Like It:
The Brazilian markets surged to another new all-time high on Friday. The NYSE-traded ADR shares of ARA rallied just over 3% on strong volume. The move looks like a tempting entry point following ARA's recent bounce from support near the $58.00 level. We successfully traded ARA several days ago and we're going to try again. The daily chart has an inverse H&S pattern that suggests a $66 target. The Point & Figure chart forecasts an $82 target. Our target is the $68.00-70.00 range. More conservative traders may want to exit near $66.00. We'll place our stop just under what should be support at $58.00.

Picked on June 03 at $62.00
Change since picked: + 0.00
Earnings Date 07/27/07 (unconfirmed)
Average Daily Volume: 355 thousand

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CIT Group - CIT - close: 61.11 change: +1.18 stop: 58.49

Company Description:
CIT Group Inc., a leading commercial and consumer finance company, provides clients with financing and leasing products and advisory services. Learn more at www.cit.com (source: company press release or website)

Why We Like It:
Friday's 1.9% rally in CIT produced a bullish breakout over resistance and its five-week trading range between $58.50 and $61.00. The move was fueled by above average volume and more aggressive traders might want to use it as an entry point. We want to wait for a rally past the February 2007 high so we're suggesting a trigger to go long the stock at $61.75. If triggered we are aiming for the $67.00-70.00 range. Currently the Point & Figure chart forecasts an $84 target. More conservative traders may want to exit near $65.00, which could be round-number resistance.

Picked on June xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/18/07 (unconfirmed)
Average Daily Volume: 1.3 million

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Fomento Economico - FMX - cls: 40.44 chg: +0.60 stop: 37.99

Company Description:
FEMSA is the leading beverage company in Latin America. It controls an integrated beverage platform that comprises Coca-Cola FEMSA, the largest Coca-Cola bottler in the region; FEMSA Cerveza, one of the leading brewers in Mexico and important beer exporter to the United States; and Oxxo, the largest and fastest growing convenience store chain in Mexico with over 4,900 stores. (source: company press release or website)

Why We Like It:
Mexican stocks have also been hitting new highs and while shares of FMX aren't near new highs the stock is breaking out over resistance at the $40.00 level. Actually what we are seeing is the ADR shares traded in New York, which have bounced from support near $38.00 and broken through the $40.00 level. The company recently split its stock 3-for-1 and we are not seeing any post-split depression. We are suggesting long positions now with FMX above $40.00 but a dip near $39.00 could also be used as a new entry point. Our target is the $44.00-45.00 range.

Picked on June 03 at $40.44
Change since picked: + 0.00
Earnings Date 07/28/07 (unconfirmed)
Average Daily Volume: 1.5 million

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Pinnacle Enter. - PNK - cls: 30.94 chg: +0.34 stop: 29.95

Company Description:
Pinnacle Entertainment owns and operates casinos in Nevada, Louisiana, Indiana, Missouri, Argentina and The Bahamas; owns a hotel in Missouri; and has significant insurance claims related to a hurricane-damaged hotel and casino complex previously operated in Biloxi, Mississippi. Pinnacle also has two casino development projects under construction in the St. Louis, Missouri area, which are dependent upon final approval by the Missouri Gaming Commission. Pinnacle is currently developing the Company's second casino resort in Lake Charles, Louisiana, to be called Sugarcane Bay; anticipates developing a casino project in Baton Rouge, Louisiana, subject to various approvals; and is designing a hotel casino resort to be built on its site at the heart of the famed Boardwalk in Atlantic City, New Jersey. (source: company press release or website)

Why We Like It:
The casino and gaming stocks were showing strength on Friday. If the rally continues then PNK will probably breakout from its current trading range in the $30-31 zone. Shares have been bouncing around its exponential 200-dma and its 100-dma. We are suggesting a trigger to buy the stock at $31.35. More conservative traders may want to use a trigger above $31.50. If triggered our target is the $34.50-35.00 range. Currently the P&F chart for PNK is still bearish and points to a $19 target.

Picked on June xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 08/07/07 (unconfirmed)
Average Daily Volume: 685 thousand

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Raytheon - RTN - close: 56.17 chg: +0.57 stop: 53.95

Company Description:
Raytheon Company, with 2006 sales of $20.3 billion, is a technology leader specializing in defense, homeland security and other government markets throughout the world. With a history of innovation spanning 85 years, Raytheon provides state-of-the-art electronics, mission systems integration and other capabilities in the areas of sensing; effects; and command, control, communications and intelligence systems, as well as a broad range of mission support services. With headquarters in Waltham, Mass., Raytheon employs 73,000 people worldwide. (source: company press release or website)

Why We Like It:
The DFI defense index is breaking out to new all-time highs. Helping power that move is RTN, which just broke out past resistance at the $56.00 level. Volume on Friday's rally was well above the daily average, which is bullish. We are suggesting long positions now with RTN above $56 but a dip back toward the $55.00 level, which should be short-term support, would also be an attractive entry point. Our target is the $59.75-60.00 range.

Picked on June 03 at $56.17
Change since picked: + 0.00
Earnings Date 07/25/07 (unconfirmed)
Average Daily Volume: 2.3 million

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St. Mary Land - SM - cls: 38.09 chg: +0.73 stop: 35.99

Company Description:
St. Mary Land & Exploration Company was founded in 1908 and incorporated in 1915. We are engaged in the exploration, development, acquisition and production of natural gas and crude oil in five core areas in the United States. (source: company press release or website)

Why We Like It:
After months of consolidating sideways it looks like SM is finally breaking out. The rally on Friday pushed shares above resistance near $38.00 but we want to see a little more confirmation. We are suggesting a trigger to buy the stock at $38.51. If triggered our target is the $43.50-45.00 range. We would expect some resistance near $40.00 and again near $40.65 but overall the breaking from its trading range and above its 200-dma is very bullish.

Picked on June xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 08/02/07 (unconfirmed)
Average Daily Volume: 539 thousand

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Trico Marine - TRMA - cls: 42.78 chg: +0.67 stop: 40.45

Company Description:
Trico provides a broad range of marine support services to the oil and gas industry, primarily in the North Sea, Gulf of Mexico, West Africa and Southeast Asia (through its partnership). The services provided by the Company's diversified fleet of vessels include the transportation of drilling materials, supplies and crews to drilling rigs and other offshore facilities; towing drilling rigs and equipment from one location to another; and support for the construction, installation, repair and maintenance of offshore facilities. Trico has its principal office in Houston, Texas. (source: company press release or website)

Why We Like It:
Oil and oil service stocks were higher on Friday thanks to a $1.00 rally in crude oil. Shares of TRMA managed to breakout from its four-week trading range. The stock already had a bullish trend of higher lows and now shares are hitting new all-time highs. We are suggesting long positions with shares above $42.00. If you prefer to buy the dip watch for a pull back near the $42.00 level. Our target is the $46.50-47.50 range. The P&F chart points to a $58 target.

Picked on June 03 at $42.78
Change since picked: + 0.00
Earnings Date 08/06/07 (unconfirmed)
Average Daily Volume: 268 thousand
 

New Short Plays

Archer Daniels - ADM - cls: 34.59 chg: -0.45 stop: 36.11

Company Description:
Archer Daniels Midland Company (ADM) is the world leader in BioEnergy and has a premier position in the agricultural processing value chain. ADM is one of the world's largest processors of soybeans, corn, wheat and cocoa. ADM is a leading manufacturer of biodiesel, ethanol, soybean oil and meal, corn sweeteners, flour and other value-added food and feed ingredients. Headquartered in Decatur, Illinois, ADM has over 26,000 employees, more than 240 processing plants and net sales for the fiscal year ended June 30, 2006 of $37 billion. (source: company press release or website)

Why We Like It:
Back in early 2006 ethanol stocks could do no wrong. Now it looks like the bloom has withered. ADM has been under performing the market for most of May. Shares have seen failed rallies near $37.00 and now this past week the stock produced a failed rally and bearish reversal under its 200-dma. Some recent analyst comments raised concerns about profit margins due to increased ethanol production and rising corn prices. The P&F chart is still bullish but the weekly chart's technicals are suggesting more weakness ahead. We're suggesting shorts with ADM under $35.00. Our target is the $30.50-30.00 range but we do expect some support and a bounce near $32.75-33.00.

Picked on June 03 at $34.59
Change since picked: + 0.00
Earnings Date 07/31/07 (unconfirmed)
Average Daily Volume: 6.6 million
 

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