NEW BULLISH Plays

Titanium Metals - TIE - close 16.60 change +1.20 stop 14.70

Company Description:
Titanium Metals Corporation (TIMET) is a producer of titanium melted and mill products. The Company has titanium production facilities in the United States and Europe. The Company’s products include titanium sponge, the basic form of titanium metal used in titanium products; melted products (ingot, electrode and slab), the result of melting titanium sponge and titanium scrap, either alone or with various alloys; mill products that are forged and rolled from ingot or slab, including long products (billet and bar), flat products (plate, sheet and strip) and pipe, and fabrications (spools, pipe fittings, manifolds and vessels) that are cut, formed, welded and assembled from titanium mill products. (source: company press release or website)

Target(s): 16.95, 18.00
Key Support Areas: 16.00, 15.50, 15.00
Key Resistance Areas: 16.00, 16.70, 17.25
Time Frame: Several weeks

Why We Like It:
TIE reported earnings on May 5th of 9 cents versus about 3 cents estimates. The stock reacted favorably even though the overall market plunged late last week. The stock has been consolidating in a bull flag for the past month and I suggest readers take advantage of any pullback in the stock to the $15.60 area. This is just above the 50-day SMA and the midpoint of the bull flag, which I think TIE will eventually break out of. This sets up a good risk reward trade: we are risking $0.90 to make $1.35. If triggered we our looking for the stock to trade back up $16.95, which would garner a nice +8.6% gain. Our second more aggressive target is $18.00 which is near highs from May 2008. Note, it may take several days to a week to get filled on this trade but I wanted to list the trade in case there is significant weakness in the coming days.

Suggested Position: Long TIE Stock if it trades down to the $15.60 area

Annotated Chart:

Entry on xx at xx
Earnings Date 8/4/2010 (unconfirmed)
Average Daily Volume: 3.8 million
Listed on 5/10/10, 2010