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New Plays

Industrials, Oil, Meat and more!

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Play Editor's Note: We are adding a bunch of new candidates to the newsletter this evening. However, I want to point out the charts in Jim's weekend market wrap. The specific charts that show the huge range for the DJIA and the S&P 500 and we're stuck right in the middle.

If you are feeling the least bit hesitant to jump back into the markets I want to say, "it's okay." You don't have to. More conservative traders should probably NOT open new positions at this time. A better entry point would be on a bounce from the bottom of the range or a breakout through the top of the range if you're bullish, just the opposite if you're bearish.

FYI: Nimble or more aggressive traders may want to check out Sara Lee (SLE). The stock has produced what looks like a bullish double-bottom. The stock got crushed during the market's two-day sell-off. It didn't help that SLE reported earnings and guided lower. In reaction to the drop SLE announced they would start buying the stock back but failed to specify just how much. SLE has created a big $9.25-12.00 trading range. On this side of the range, the bet would be to target the $12.00 region.


NEW BULLISH Plays

Ameron Intl. Corp. - AMN - close: 48.17 change: +3.35 stop: 44.45

Why We Like It:
A quick glance at some of the fundamentals and AMN looks cheap here. Traders were quick to buy the dip on Friday at its rising 10-dma. This looks like a good spot to buy the bounce with a stop loss under last week's low.

We are setting two targets. Our first target is $54.50. Our second target is $57.50. The stock has an extremely small float and while short interest isn't too big at 5% of the float it could be a catalyst if bears decide to cover.

Annotated chart:
AMN

Picked on November 09 at $48.17 
Change since picked:     + 0.00   			
Earnings Date          01/26/09 (unconfirmed)    
Average Daily Volume:       176 thousand   


Anadarko Petroleum - APC - close: 36.33 change: +2.48 stop: varies

Why We Like It:
Oddly enough many of the oil stocks are rising as crude oil futures sink to new lows. Most of the short-term technicals on APC are flashing buy signals and the stock held up very well during last week's two-day sell-off.

We are listing two different entry points to buy APC. Our first entry point is $37.25 in case the stock breaks out over short-term resistance at $37.00. If this occurs then we'll use a stop loss at $33.99, just under Friday's low.

Our alternative entry point is to buy a dip in the $34.50-33.50 zone. If triggered here our stop loss will be $31.75.

We have two targets. Our first target is $39.95. Our second target is $42.50 or the simple 50-dma, whichever one the stock hits first.

FYI: A move over $37.00 will produce a brand new Point & Figure chart buy signal.

Annotated chart:
APC

Picked on November xx at $xx.xx <-- see TRIGGER  
Change since picked:     + 0.00   			
Earnings Date          11/03/08 (confirmed)    
Average Daily Volume:      10.7 million     


Chesapeake Energy - CHK - close: 23.39 change: +0.86 stop: 21.75

Why We Like It:
Natural gas prices are not quite as dead as crude oil prices but the trend remains bearish. Yet shares of CHK, the largest natural gas producer in the U.S., is seeing a bullish turnaround in their stock. Granted there were some rumors last week that CHK had become a takeover candidate. We're not betting on a takeover but it doesn't hurt the share price.

Friday's intraday bounce looks like a new entry point to get long the stock. We'll start with a stop loss at $21.75. Our target is $27.75. More aggressive traders may want to aim for $30.00 or its 50-dma. Traders should take note of the trendline of resistance currently near the simple 40-dma. You may want to tighten up your stop loss as CHK nears that trendline (see chart).

Should we get stopped out we would still keep CHK on your watch list as a bounce from $20.00 would also look like a potential entry point for bullish positions.

Annotated chart:
CHK

Picked on November 09 at $23.39 
Change since picked:     + 0.00   			
Earnings Date          10/30/08 (confirmed)    
Average Daily Volume:      36.5 million     


FMC Corp. - FMC - close: 44.15 change: +2.83 stop: 40.85

Why We Like It:
FMC just exploded off its lows in late October after announcing better than expected earnings results. Shares soared from $30 to $49 in six days. Profit taking was way overdue but traders stepped in to buy the dip near its 10-dma around $41.00. We like the bounce and want to buy FMC here. More conservative traders may want to consider looking for a dip in the $43-42 zone instead.

We'll try and protect ourselves with a stop loss at $40.85, just under Thursday's low. Our target is $48.85. More aggressive traders may want to aim higher but the $50.00 mark and its 50-dma could be tough resistance to break. FYI: The Point & Figure chart is bullish with a $90 target.

Annotated chart:
FMC

Picked on November 09 at $44.15 
Change since picked:     + 0.00   			
Earnings Date          10/28/08 (confirmed)    
Average Daily Volume:       1.8 million     


Corning Inc. - GLW - close: 10.41 change: +0.41 stop: 9.75

Why We Like It:
As the U.S. and the world moves further into what looks like a sharp recession we really can't imagine the consumer buying many flat-screen TVs or monitors. Yet at $10.00 most of the bad news is probably priced in. GLW reported earnings a few days ago and guided lower so there shouldn't be any surprises for investors.

The stock is at lows it hasn't seen since 2004 and traders have been consistently buying the dips in the $10.00-9.80 level. We are suggesting readers get long the stock here with a stop loss at $9.75. Our first target is $11.70. We'll set a secondary, more aggressive target at $13.00 but the $12.00 region could be rough level for the stock to break.

Annotated chart:
GLW

Picked on November 09 at $10.41 
Change since picked:     + 0.00   			
Earnings Date          10/29/08 (confirmed)    
Average Daily Volume:      23.7 million     


Perdigao S.A. - PDA - close: 34.30 change: +4.10 stop:

Why We Like It:
This is a relative strength play. Shares of PDA, a Brazilian meat-products company, have been on fire the last two weeks. The stock has a very steady trend of higher lows. PDA held up very well during last week's two-day meltdown.

We don't want to chase Friday's 13.5% gain so we're looking for a dip. The plan is to buy a dip in the $32.00-30.00 zone with a stop loss at $29.49. If triggered our first target is $36.00. Our second target s $39.50. We'll need to keep an eye on the 50-dma, which may be overhead resistance. FYI: The Point & Figure chart is bullish with a $54 target.

Annotated chart:
PDA

Picked on November xx at $xx.xx <-- see TRIGGER  
Change since picked:     + 0.00   			
Earnings Date          10/28/08 (unconfirmed)    
Average Daily Volume:       245 thousand    

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