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New Plays
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TRA XLF

New Long Plays

Terra Ind. - TRA - close: 44.80 chg: +2.50 stop: 39.74

Company Description:
Terra Industries (TRA) is a leading international producer of nitrogen products. The company employs approximately 870 people in North America and is headquartered in Sioux City, Iowa. (source: company press release or website)

Why We Like It:
TRA soared on Friday out performing the S&P 500 by a wide margin. We didn't see any news or catalyst for the rally and suspect it could just be a short squeeze on the technical breakout over the 50-dma. We're bullish on the sector and TRA is definitely showing relative strength. We are suggesting readers buy a dip in the $42.50-42.00 zone. If triggered our target is the $49.00-50.00 range. FYI: The latest data puts short interest at more than 20% of the 88.8 million-share float. We do not want to hold over the late April earnings report. This industry has seen a lot of volatility so watch your stops carefully!

Picked on April xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/23/08 (unconfirmed)
Average Daily Volume: 4.1 million
 

New Short Plays

Financial Sector SPDR - XLF - close: 25.13 chg: -0.49 stop: 26.51

Company Description:
This is the Financial Select Sector SPDR (spiders), which is an exchange traded fund (ETF) focused on banks, insurance, real estate, and diversified financials.

Why We Like It:
Wall Street will see a parade of earnings this week and many of them will be from the financial sector. We suspect that the news will be worse than investors think and thus the group could retest its lows. We're suggesting shorts now with the XLF under $26.00. We'll try and limit our risk with a stop loss at $26.51. Aggressive traders could put their stop above $27.00 and more conservative traders put their stop closer to $26.00. We're setting two targets. Our first target is the $22.50 mark. Our second target is the $21.00 mark.

Picked on April 13 at $25.13
Change since picked: + 0.00
Earnings Date 00/00/00
Average Daily Volume: 139 million
 

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