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New Plays
Long Plays
Short Plays
AXYS MCD
CAS  
SON  
USM  

Play Editor's note: Traders need to keep an eye on crude oil. It is as much a market mover as the major indices. If crude breaks down under $125 then the oil and oil services should follow. Since energy is such a large part of the S&P 500 then it could follow oil lower as well.


New Long Plays

Axsys Tech. - AXYS - close: 59.16 change: +1.90 stop: 54.99

Company Description:
Axsys Technologies, Inc. is a global leader in the design and development of high-performance surveillance cameras, imaging systems and related motion control technologies, serving the aerospace, defense, and high-performance commercial markets. (source: company press release or website)

Why We Like It:
AXYS has been stair stepping higher for months. The stock just broke out from a four-week consolidation phase and on strong volume. We are suggesting readers buy the breakout. Our target is the top of the channel in the 64.00-65.00 range. If you prefer a better entry point would be on a dip back into the $58.00-57.75 zone.

Picked on June 01 at $59.16
Change since picked: + 0.00
Earnings Date 07/24/08 (unconfirmed)
Average Daily Volume: 124 thousand

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AM Castle & Co - CAS - close: 32.83 change: +0.76 stop: 30.69

Company Description:
Founded in 1890, A.M. Castle & Co. is a global distributor of specialty metal and plastic products and supply chain services, principally serving the producer durable equipment sector of the economy. (source: company press release or website)

Why We Like It:
After two weeks of consolidation shares of CAS are rebounding from the bottom edge of its bullish channel. This is a chance to buy the bounce and ride it toward the top of the channel. Our target is the $36.50-37.00 zone, which is just under its all-time highs. We're suggesting a stop loss under last week's low but more conservative traders might be able to get away with a slightly tighter stop.

Picked on June 01 at $32.83
Change since picked: + 0.00
Earnings Date 07/31/08 (unconfirmed)
Average Daily Volume: 138 thousand

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Sonoco Products - SON - close: 34.62 change: +0.65 stop: 32.89

Company Description:
Sonoco, founded in 1899, is a $4.0 billion global manufacturer of consumer and industrial packaging products and provider of packaging services, with 334 operations in 35 countries serving customers in some 85 nations. (source: company press release or website)

Why We Like It:
SON spent more than a month trying to breakout over resistance near $34.00. On Friday it finally achieved success and the MACD on the daily chart produced a new buy signal. This looks like an entry point. If you prefer you could wait for a dip back toward $34.00, which should be new support. Our target is the $38.00 level. The P&F chart points to a $51 target. FYI: SON is due to present at a basics and industrials conference on June 4th.

Picked on June 01 at $34.62
Change since picked: + 0.00
Earnings Date 07/30/08 (unconfirmed)
Average Daily Volume: 430 thousand

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United States Cellular - USM - cls: 62.63 chg: +1.14 stop: 59.95

Company Description:
U.S. Cellular is the nations sixth-largest wireless service carrier, providing wireless service to 6.2 million customers in 26 states. (source: company press release or website)

Why We Like It:
It looks like USM may have broken its seven-month bearish trend. The stock has a new pattern of higher lows and traders have been buying dips to support near $60.00. The current bounce looks like an entry point to buy USM. Our target is the recent highs in the $67.00-67.50 zone. More aggressive traders could aim for $70 or its 200-ema. The P&F chart is bullish with an $85 target.

Picked on June 01 at $62.63
Change since picked: + 0.00
Earnings Date 08/07/08 (unconfirmed)
Average Daily Volume: 129 thousand
 

New Short Plays

McDonald's - MCD - close: 59.32 change: +0.16 stop: 60.01

Company Description:
McDonald's is the leading global foodservice retailer with more than 31,000 local restaurants in more than 100 countries. More than 75% of McDonald's restaurants worldwide are owned and operated by franchisees and affiliates. (source: company press release or website)

Why We Like It:
It looks like the oversold bounce in MCD is failing under the $60.00 level. The technical indicators are mixed and MCD still has a trendline of higher lows so this should be considered a higher-risk bearish play. We'll try and reduce our risk with a relatively tight stop at $60.01. If we're wrong then we should be taken out quickly. We would expect MCD to find some support near $58.00 at its trendline (see chart) but a breakdown from there should lead to a drop near $56 and its 200-dma. Our first target is the $56.30-56.00 zone. We are contemplating a secondary, more aggressive target. Currently the P&F chart is still bullish.

Picked on June 01 at $59.32
Change since picked: + 0.00
Earnings Date 07/30/08 (unconfirmed)
Average Daily Volume: 6.6 million
 

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