New Plays

Metals, Industrial, & Construction.

by James Brown

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NEW BEARISH Plays

Carpenter Tech. - CRS - close: 20.06 chg: -0.83 stop: 22.20

Why We Like It:
When the global economy recovers the steel and metal producers should be winning investments but right now with the health and timing of any economic rebound in question they're fading lower. Both the S&P 500 and CRS have produced a bearish head-and-shoulders pattern. CRS still has support near $18.50 so bearish positions now are probably a little aggressive. I'm suggesting shorts here with a stop above last Wednesday's high. Our first target is $18.05. Our second target is $16.25.

Annotated chart:

Entry on      July 04 at $20.06 
Change since picked:     + 0.00   			
Earnings Date          07/28/09 (unconfirmed)    
Average Daily Volume:       586 thousand
Listed on  July 04, 2009    


Fastenal Co. - FAST - close: 31.90 change: -1.06 stop: 34.05

Why We Like It:
This is going to be a short-term play with earnings expected on July 13th. We will plan to exit ahead of earnings. The trend has turned bearish and the P&F chart now points to a $23 target. More conservative traders may want to wait for FAST to decline under the May lows near $31.50. I'm suggesting bearish positions now or on a bounce back toward $33.00. Our first target is $30.15. Our second target is $28.05.

Annotated chart:

Entry on      July 04 at $31.90 
Change since picked:     + 0.00   			
Earnings Date          07/13/09 (unconfirmed)    
Average Daily Volume:       1.8 million 
Listed on  July 04, 2009    


McDermott Intl. - MDR - close: 19.34 change: -0.81 stop: 21.25

Why We Like It:
After huge gains in the first and second quarter MDR suffered a pretty sharp correction in mid June. Unfortunately the oversold bounce has failed several times at $21.00. If the market continues to correct MDR could accelerate lower. I'm suggesting new bearish positions now or on a bounce back toward the $20.00-20.50 zone. Our first target is $17.25. Our second target is $16.05.

Annotated chart:

Entry on      July 04 at $19.34 
Change since picked:     + 0.00   			
Earnings Date          08/11/09 (unconfirmed)    
Average Daily Volume:       3.2 million 
Listed on  July 04, 2009