NEW BEARISH Plays

Alleghany Technologies - ATI - close 44.15 change -1.27 stop 46.82

Company Description:
Allegheny Technologies Incorporated (ATI) is a diversified specialty metals producer. The Company’s products include titanium and titanium alloys, nickel-based alloys and superalloys, zirconium, hafnium and niobium, stainless and specialty steel alloys, grain-oriented electrical steel, tungsten-based materials and cutting tools, carbon alloy impression die forgings, and large grey and ductile iron castings. ATI’s specialty metals are produced in a range of alloys and product forms. The Company focuses on its technological and unsurpassed manufacturing capabilities to serve global end use markets with diversified and specialized product offerings.

Target(s): 42.05, 41.00, 40.10
Key Support/Resistance Areas: 46.25, 43.80, 42.00, 40.00
Time Frame: 1 to 2 weeks

Why We Like It:
Steel producers have been getting downgraded and the sector remains in a downtrend. I suggest we take advantage of an impending correction in the broader market and initiate short positions in ATI, which should send ATI back towards its recent lows. Let's use one of two triggers. If ATI trades up to $44.65 or a break down to $43.78. If triggered at $44.65 our first two targets are -4.5% and -7% lower. Our stop is above a recent downtrend line that began in late July.

Suggested Position: Short ATI stock if it trades to $44.65 or $43.78.

Annotated chart:

Entry on September xx
Earnings: 10/20/2010 (unconfirmed)
Average Daily Volume: 1.7 million
Listed on September 20, 2010