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New Long Plays

Contango Oil - MCF - close: 81.70 change: +1.52 stop: 76.75

Company Description:
Contango is a Houston-based, independent natural gas and oil company. The Companys core business is to explore, develop, produce and acquire natural gas and oil properties primarily offshore in the Gulf of Mexico. (source: company press release or website)

Why We Like It:
Crude oil is breaking out to new highs and the oil stocks are following it higher. MCF has been consolidating under resistance at $80.00 for more than four weeks. Today's rally is a bullish breakout on above average volume. Now normally we would avoid a stock with average volume under 250,000 a day. However, the play set up here looked too tempting. Shares have support at $75.00 but that's too wide of a stop so we're putting our stop at $76.75. We would buy the stock now or on a dip to $80.00. More conservative traders may want to use a tighter stop since broken resistance should be new support. Our target is the $88.00-90.00 range. FYI: One risk is earnings. We can't find a good earnings report date for MCF and we would not want to hold over the announcement.

Picked on May 06 at $81.70
Change since picked: + 0.00
Earnings Date 02/08/08 (unconfirmed)
Average Daily Volume: 107 thousand

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Wachovia - WB - close: 30.08 change: +0.30 stop: 28.89

Company Description:
Wachovia Corporation is one of the nation's largest diversified financial services companies, with assets of $808.9 billion and market capitalization of $53.8 billion at March 31, 2008. Wachovia provides a broad range of retail banking and brokerage, asset and wealth management, and corporate and investment banking products and services to customers through 3,300 retail financial centers in 21 states from Connecticut to Florida and west to Texas and California, and nationwide retail brokerage, mortgage lending and auto finance businesses. (source: company press release or website)

Why We Like It:
WB came out with bad news today. The company said they would have to restate their first-quarter results. The company had reported a loss of 20 cents a share. Now they're restating it as a loss of 36 cents a share. With news like that you would normally expect the stock to crater. Instead traders bought the dip near $29.00 and its 10-dma and shares closed in the green. When investors are buying bad news it's tough to be bearish. The banking sector indices both appear to have broken through resistance and traders bought the dip in the entire group. Thus the sector and WB look poised to rebound. We're suggesting readers buy WB right here with a tight stop under today's low. There is potential resistance at the 100-dma. Our first target is the $33.00 mark. Our second target is the $34.90 mark.

Picked on May 06 at $30.08
Change since picked: + 0.00
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume: 39.5 million
 

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