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New Plays
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JASO None
VSE  

Play Editor's Note: We are not adding a lot of new plays to the newsletter this weekend. The major market indices look like they have built a bearish double-top pattern. Yet we hesitate to open a bunch of bearish positions as we move into the last week of June, which could see window dressing. Plus, there is a host of potentially market-moving economic reports and a FOMC meeting this week. There is no way to know if stocks will continue to sell-off, surge back to test the highs or just trade sideways as investors wade through the economic reports and wait for the fourth of July weekend and the beginning of second quarter earnings.


New Long Plays

JA Solar - JASO - cls: 29.73 change: +0.52 stop: 27.45

Company Description:
Based in Hebei, China, JA Solar Holdings Co., Ltd. is an emerging and fast-growing manufacturer of high-performance, monocrystalline solar cells. The Company sells its products to solar module manufacturers who assemble and integrate its solar cells into modules and systems that convert sunlight into electricity. (source: company press release or website)

Why We Like It:
Rising crude oil always tends to drive new interest into the alternative energy stocks. The solar industry has seen their stocks surge this past week or two. We suspect that there is more left in this rally. Investors definitely bought the dip on Friday near $28.00. We're suggesting traders buy the bounce. We're going to set our stop loss under the 10-dma around $27.50. More conservative traders could tighten their stop toward $28.00 while more aggressive traders could put their stop under $26.00, which as broken resistance should be support. Our target is the $33.00-33.50 range. The Point & Figure chart is very bullish with a quadruple-top breakout buy signal and a $47 target. More aggressive traders may want to aim higher.

Picked on June 24 at $29.73
Change since picked: + 0.00
Earnings Date 08/14/07 (unconfirmed)
Average Daily Volume: 1.5 million

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Verasun Energy - VSE - cls: 13.89 chg: +0.65 stop: 12.89

Company Description:
VeraSun Energy Corporation, headquartered in Brookings, South Dakota, is a leading producer of renewable fuel. The Company has three operating ethanol production facilities located in Aurora, SD, Fort Dodge, IA, and Charles City, IA. The Company also has two facilities under construction in Hartley, IA, and Welcome, MN, and a sixth plant under development near Reynolds, IN. Upon completion of the new facilities, VeraSun will have an annual production capacity of approximately 670MMGY. The Company has plans to extract oil from dried distillers grains, a co-product of the ethanol process, for use in biodiesel production. (source: company press release or website)

Why We Like It:
Late Thursday congress passed an energy bill that was good news for the ethanol industry. The news fueled an industry-wide rally and VSE rose 4.9% and did so on almost four times the normal volume. This looks like a bullish reversal for VSE. However, we want to see more confirmation. Aggressive traders can jump in now. We're suggesting that readers wait and use a trigger to buy the stock at $14.55. More conservative traders may even want to wait for a rise past $15.00 before buying the stock. We are going to use a wide (aggressive) stop loss under the recent low. Our target is the $17.75-18.00 range, just under the simple 200-dma. We'll be watching the 50-dma and 100-dma as potential resistance. FYI: The P&F chart is still bearish.

Picked on June xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 08/07/07 (unconfirmed)
Average Daily Volume: 878 thousand
 

New Short Plays

None today.
 

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