Option Investor
Newsletter

Daily Newsletter, Wednesday, 10/7/2009

Table of Contents

  1. Market Wrap
  2. New Plays
  3. In Play Updates and Reviews

Market Wrap

Market Flat While Investors Wait for Earnings

by Judy Alster

Click here to email Judy Alster
Some companies reported earnings today, but it was mostly nap time for the market after two big up days. Investors decided to wait for more reports, not wanting to bet big while worried that revenue and earnings won't justify the stunning gains in stocks in the last seven months. For one thing, the Standard & Poor's index, the basis for a lot of mutual funds, is up 56.3% since its 12-year low in March. The Dow isn't far behind and the Nasdaq Composite is up (are you sitting down?) 66% since its March low.

INDEX WRAPUP for WEDNESDAY, OCT. 7:

NASDAQ COMPOSITE:

Even so, stocks are down during the past two weeks with recent labor and manufacturing reports coming in shy of expectations. Wednesday the Dow fell 5.67 or 0.1% to 9,725.58; the S&P 500 index rose 2.86 or 0.3% to 1,057.58 and the Nasdaq composite rose 6.76 or 0.3% to 2,110.33.

DOW JONES INDUSTRIAL AVERAGE:

Advancers narrowly outstripped decliners on the New York Stock Exchange, where consolidated volume came in at 4.3 billion shares, lower than Tuesday's 5.1 billion.

S&P500:

I'm sure you've already noted some of the muddy technicals on these indexes — the difficulty breaking through resistance, the MACD failing to reflect new highs. Fundamentally, what do we have to keep this rise going? Stay tuned for earnings.

Wells Fargo upgraded Bank of America (BAC) despite its CEO shuffle and raised estimates for J.P.Morgan/Chase (JPM) and Goldman-Sachs (GS). Banks put in a decent performance today, with banking indexes such as the KBW up slightly, although technically we are not thrilled by what the MACD looks like or the possibility of an imminent close below the 20-day moving average.

SPIDER KBW BANK INDEX:

Today's 10-year note auction went well; despite a large $20 billion auction size, demand was very high. The yield was also healthy at 3.21%. Almost half the bidders were non-dealers.

Investors have been watching the dollar, which has plummeted this year amid rock-bottom interest rates and massive government spending. A weak dollar helps companies with extensive global operations because it encourages overseas customers to buy U.S. goods. Over the long term, of course, it will trigger inflation and compel foreign buyers of our debt to buy elsewhere.

U.S. DOLLAR INDEX:

Today was the more-or-less official start of the latest earnings cycle with Alcoa's (AA) earnings coming after hours; Alcoa, the world's largest aluminum producer, was the first component of the Dow to report. They announced a surprise third-quarter profit, helped by higher aluminum prices and demand. Profit came in at $77 million or 8 cents a share, beating forecasts. Although well down from the year-ago period ($268 million or 33 cents), it ended three straight quarters of losses due to slender demand for aluminum used in cars, homes and airplanes. The company said there finally seems to be stabilizing due to distributors' low inventories.

Since last fall the company has recorded a net loss of more than $2 billion, so In the cost-cutting department, Alcoa has slashed its dividend by 14 cents a share, cut 13,500 jobs and sold $1.3 billion of new stock and debt.

Alcoa closed up 31 cents at $14.20 but rose another $1+ to about $15 in after-hour trading on another 7 million shares.

ALCOA:

Spot aluminum prices have risen nicely since June; at the end of September, Alcoa's average price per metric ton rose 18% to $1,972. (Note, however: Spot aluminum prices are some 10% off their August peak.) Demand for the metal is up, mostly led by China replenishing its stockpiles; the country now accounts for a third of global aluminum consumption.

The Federal Reserve reported Wednesday that the U.S. consumer continues to just say no to excessive debt. Seasonally adjusted consumer debt fell $11.98 billion in August to $2.46 trillion, or at a 5.8% annual rate, although about half-a-billion dollars less than analysts were expecting. (The Fed's report covers credit cards, store cards, auto and other personal loans, not mortgages or other real-estate related debt.)

Credit-card debt fell $9.91 billion or 13.1% to $899.41 billion, the record 11th straight monthly drop in credit card debt and the seventh straight monthly decline in total credit, the longest streak since 1991. Non-revolving credit, such as auto loans, personal loans and student loans fell $2.10 billion or 1.6% to $1.56 trillion. Many if not most banks have reduced credit-card borrowing limits and tightened lending standards — an automatic cut in spending whether you want it or not; a report earlier this year by FICO, the major producer of credit scores, said companies slashed limits for an estimated 58 million card holders in the 12 months ended in April.

Since its peak in July 2008, consumer credit outstanding has fallen by $119 billion as households struggle with declining (or nonexistent) income, falling home prices, clobbered portfolios, shot-to-pieces 401(k)'s and that undeniable feeling that good times are over. At the end of the second quarter, the value of household net worth had plunged by $11 trillion from its peak in the third quarter of 2007.

Interestingly, the retrenchment in August occurred even as consumer spending increased 1.3% according to a report last week from the Commerce Department, suggesting consumers are buying with cash rather than credit. Despite cautious spending, retail seems to be holding up fairly well:

RETAIL HOLDERS:

With unemployment at 9.8% last month, consumers will probably spend carefully as long as jobs are scarce. I'm not among those who bemoan the fate of the "fledgling recovery" while consumers keep a lid on big-ticket expenditures. Believe me, Americans won't keep their wallets closed forever. I hope I don't sound like your cranky maiden aunt, but learning how not to toss money around like water is a very valuable trait, strengthening for both individual households and whole economies. Its very high savings rate was a major factor in Japan's sharp economic rise after World-War II, for ne example. Japan collapsed more because it severely cut its work hours rather than from wild spending, although the spending didn't help matters.

And in fact, Americans are saving more. Maybe we'll get to a point where consumer spending powers less than the current 70% of the economy. For example, how about some more exports?

Other big companies reported earnings today. Monsanto's fourth quarter loss widened to $284 million or 43 cents a share, compared with last year's loss of $172 million, or 31 cents. Excluding hefty restructuring and other charges, profit was two cents, up from last year's loss of three cents, despite an $1.88 billion or 8.3% revenue slide. Naturally the company cut costs by 35% and plans to cut its current workforce by 8%. It also repeated a fairly glum short-term forecast.

MONSANTO CO.:

Monsanto was the pioneer in genetically-modified seeds that can boost crop yields with their inherent protection against pests and herbicides. In June the company said it would separate its herbicides, including the well-known Roundup, into a new division and concentrate on biotech research. Roundup was a cash cow for a long time but now faces generic competition and lower global farm incomes. Next year could be pivotal for the company, since it will be pushing new high-tech corn and soybean seeds and expanding internationally to offset lower earnings from its crop-protection business. Good luck convincing farmers to shell out for the more costly new offerings with grain prices snoozing and in the face of resistance from environmental groups, mainly in Europe:

POWERSHARES-DEUTSCHE BANK AGRICULTURE INDEX:

Costco Wholesale (COST) reported fourth-quarter net income of $374 million or 85 cents a share, down 6% from $398 million or 90 cents last year; revenue dropped to $22.4 billion from $23.1 billion, although handily beating expectations of 77 cents and $22.3 billion. For the year, income was $1.09 billion or $2.47 a share, down from $1.3 billion or $2.89; revenue was down as well. Last month's comparable-store sales were up an average 1% — down in the U.S. but up 6% internationally. Sales at stores open at least a year dropped here and internationally, but exclude the effect last year of a stronger dollar and lower gas prices, which hurt stores in Canada, the U.K. and Korea, and sales at stores open at least a year edged up 1%, with international same-store sales up 7%.

Costco has managed to pull in budget-conscious shoppers during the recession with deals on food and everyday items but has been hurt by a pullback in spending on big-ticket items like jewelry and furniture. For the year, net income slipped 15% to $1.09 billion or $2.47 a share, down from $1.28 billion or $2.89 per share; full-year revenue fell 2% to $71.42 billion.

COSTCO WHOLESALE:

Casual dining chain Ruby Tuesday (RT) saw its first-quarter profit soar despite lower sales, as cost saving measures (No!) kicked in and interest costs fell. Profit rose to $6.1 million or 11 cents per share, up from $285,000 or a penny a share in the quarter last year; that was with a 9% increase in the number of shares outstanding. Revenue fell 7% to $300.6 million. Analysts were expecting 9 cents a share on $296.9 million, but the company issued a downbeat forecast for the year so shares ended unchanged Wednesday. The company attributed the sales decline to operating 45 fewer restaurants this year.

RUBY TUESDAY:

Let's hope they're not gobbling too much fried dough and cotton candy over at the Mortgage Bankers' Association, because they're on a big roller coaster. Two weeks ago showed a 6.2% drop in mortgage applications; last week recorded a sharp jump, up 13.2% for purchases and up 18.2% for refinancing. The average rate for 30-year mortgages fell for a third straight week, down five basis points to 4.89%, making you want to buy a house just to take advantage of it. As in the prior week, the bulk of mortgage-application demand was refinancing, which is now making up two thirds of all applications (a case of apples and pineapples; I agree refinancing should be tracked separately). In any case, refinancing will help make household debt manageable and help somewhat to limit foreclosures.

A big buildup in the gasoline supply and another in distillate stocks more than offset a small draw in crude last week, according to the weekly report of the Energy Information Administration (EIA). Gasoline stocks rose 2.9 million barrels with distillates up 0.7 million, while crude stocks fell one million barrels. Refineries, although they increased their output of petroleum products last week, putting 14.6 million barrels of crude a day to work, are still snoozing along at a middling 85% of capacity. Gasoline demand is the good news in the report, up a strong 6.2% since this time last year and hinting, albeit lightly, at consumer strength.

Crude-oil futures edged below $70 a barrel on the buildup in gasoline inventories. On the New York Mercantile Exchange, crude for November delivery fell $1.31, or 1.8%, to $69.57 a barrel after trading as high as $71.76 earlier in the session.

WEST TEXAS INTERMEDIATE CRUDE:

During lunch I glanced casually at some shipping stocks including Diana (DSX), Eagle (EGLE) and Excel Maritime (EXM). Some big moves there prompted a look at the Baltic Dry Index, that fairly pure indicator of economic activity which measures the demand for transporting raw materials — steel, ore, coal, fertilizer, grain — which themselves are the early signs of production and consumption. A summary of prices on several routes for several sizes of carrier, the BDI is a proxy for the entire dry bulk shipping market.

Slow post-recession demand has handed two large wallops to the dry bulk sector this year, but an advance in the last week might mean a rebound, with the index on its best run since mid-July. Yesterday there was a 3% move up (see graph), and today saw was a 105-point jump to 2,546. According to carrier China Ocean Shipping, government-encouraged factory output in China could send the Index up sharply by the end of the year.

BALTIC DRY INDEX (Oct. 6, latest):

EXCEL MARITIME:

And let's see whether we can add a touch of levity to that 9.8% unemployment report:


Tomorrow look for interest rate announcements from the Bank of England and the European Central Bank, jobless claims, the EIA natural gas report, the RBC Cash Index (a measure of consumer attitudes and spending) and several debt auctions including $12 billion in 30-year bonds. Reporting earnings will be PepsiCo (PEP), Marriott International (MAR), and International Speedway (ISCA), among others.


New Plays

Bulls Look Ready to Rush In

by James Brown

Click here to email James Brown

Editor's Note:

Bullish candidates were easy to find today. I wanted to provide a few extra symbols as possible trading ideas. Some of these candidates need to see a pull back while others need to see more of a bounce but they all appear to have potential. Here's the list: AFAM, APH, BLL, CBE, CDE, CLF, and MS.


NEW BULLISH Plays

Apartment Investment & Mgmt - AIV - cls: 14.52 chg: -0.03 stop: 13.49

Why We Like It:
AIV is a REIT that appears to be breaking out from its three-week consolidation. I'm suggesting bullish positions now. More conservative traders may want to wait for a close over $15.00 first. Our first target to take profits is at $16.50. Our second target is $18.50 but we may not have time. The plan is to exit ahead of the October 30th earnings report.

Annotated chart:

Entry on   October 07 at $14.52 
Change since picked:     + 0.00   			
Earnings Date          10/30/09 (confirmed)    
Average Daily Volume:       3.6 million 
Listed on   October 07, 2009    


AZZ Inc. - AZZ - close: 39.73 change: +0.55 stop: 37.85

Why We Like It:
AZZ is an electrical equipment maker. The stock's recent correction found support at $38.00 and now it's on the rise again. The trend is up and the P&F chart points to a $59 target. I'm suggesting readers buy this bounce with a stop at $37.85. Our first target is $44.00. Our second target is $47.50.

Annotated chart:

Entry on   October 07 at $39.73 
Change since picked:     + 0.00   			
Earnings Date          01/07/09 (unconfirmed)    
Average Daily Volume:       120 thousand
Listed on   October 07, 2009    


F5 Networks - FFIV - close: 40.63 change: +0.63 stop: 37.75

Why We Like It:
Networking stocks were some of the best performers today. That may have been due to news that Ciena was buying part of Nortel but overall the sector was showing relative strength. FFIV, which has been consolidating under resistance near $40.00 for about five weeks has finally broken out. I'm suggesting readers buy FFIV on this move. Our first target to take profits is at $44.50. I'd like to aim higher but we may not have time. Earnings are in a couple of weeks.

Annotated chart:

Entry on   October 07 at $40.63 
Change since picked:     + 0.00   			
Earnings Date          10/21/09 (unconfirmed)    
Average Daily Volume:       1.2 million 
Listed on   October 07, 2009    


Petrobras - PBR - close: 46.19 change: +0.27 stop: 43.70

Why We Like It:
PBR, who's real name is Petroleo Brasileiro, is one of the biggest companies in the world. This oil and energy company is back to retesting resistance near $46.00-46.50 and this time it looks ready to breakout.

I am suggesting readers buy PBR with a trigger at $46.80. If triggered our first target is $52.50. Please note that there is some resistance at $50.00 and I would expected a pull back on the initial test of the $50 level. Our second target is $59.00. The P&F chart is bullish with a $63 target.

Annotated chart:

Entry on   October xx at $xx.xx <-- TRIGGER @ 46.80
Change since picked:     + 0.00   			
Earnings Date          11/13/09 (unconfirmed)    
Average Daily Volume:      12.8 million 
Listed on   October 07, 2009    


VisionChina Media - VISN - close: 8.53 change: +0.62 stop: 7.45

Why We Like It:
This play is for the gunslingers out there looking for a high-return trading idea.

VISN has been stuck trading sideways in the $5.00 to $8.00 range for almost a full year. The stock finally broke out above this level today. Normally I would hesitate to chase a 7.8% move like this but with the close over $8.00 this stock could take off.

This is a very aggressive, higher-risk trade. Shares are arguably short-term overbought. We don't know how this stock will react when the Chinese stock market reopens on October 9th after a week of being closed for holiday. Technically this is a bullish breakout. While I couldn't find any short interest data if there is any short interest I suspect there could be a rush to cover.

I would use very small position sizes. Our first target is $10.90. Our second target is $13.75. The Point & Figure chart is bullish with a $15.00 target. My time frame is several weeks (maybe year end).

Annotated chart:

Weekly chart:

Entry on   October 07 at $ 8.53 
Change since picked:     + 0.00   			
Earnings Date          10/29/09 (unconfirmed)    
Average Daily Volume:       407 thousand
Listed on   October 07, 2009    



In Play Updates and Reviews

Still At It

by James Brown

Click here to email James Brown

Investors big and small are still buying the dip.


BULLISH Play Updates

Airgas Inc. - ARG - close: 48.01 change: -0.14 stop: 45.85

I would still consider new positions in ARG but readers may want to wait for a little relative high above $48.60 to initiate positions.

Our first target is $52.45. Our second target is $54.85. More aggressive traders could aim higher. The Point & Figure chart is bullish and predicting a $77 target.

Entry on September 25 at $47.25
Change since picked:     + 0.76   			
Earnings Date          10/29/09 (confirmed)    
Average Daily Volume:       1.5 million 
Listed on September 19, 2009    


BE Aerospace - BEAV - close: 19.99 change: +0.78 stop: 17.90

BEAV is starting to show some strength with a 4% rally. The stock is now testing resistance at the $20.00 mark. Our first target is $22.25.

Entry on September 12 at $19.19 
Change since picked:     + 0.80   			
Earnings Date          10/27/09 (unconfirmed)    
Average Daily Volume:       834 thousand
Listed on September 12, 2009    


Cullen Frost Bankers - CFR - close: 50.44 change: +0.03 stop: 48.90

CFR is still under performing its peers. More conservative traders may want to exit early now. I'm not suggesting new bullish positions at this time. Our first target is $53.00.

Entry on September 26 at $50.42 
Change since picked:     + 0.02   			
Earnings Date          10/21/09 (unconfirmed)    
Average Daily Volume:       419 thousand
Listed on September 26, 2009    


Check Point Software - CHKP - cls: 29.40 change: +0.21 stop: 27.35

CHKP continues to rise and shares closed at a new high. I would prefer to buy a dip in the $28.50-28.00 region but I'm suggesting bullish positions now. Our first target is $32.50.

Entry on   October 06 at $29.19 
Change since picked:     + 0.21   			
Earnings Date          10/27/09 (unconfirmed)    
Average Daily Volume:       2.4 million 
Listed on   October 06, 2009    


Carpenter Tech. - CRS - close: 23.83 change: +0.09 stop: 21.90 *new*

This looks like a new entry point to buy CRS. Consider jumping in now with our new stop loss at $21.90.

CRS has already hit our first target. Our secondary target is $27.40.

Entry on September 05 at $21.45 /gap higher entry
                             /originally listed at $20.92
Change since picked:     + 2.38
                             /1st target hit @ 24.90 (+16.0%)
Earnings Date          10/28/09 (unconfirmed)    
Average Daily Volume:       536 thousand
Listed on September 05, 2009    


DELL Inc. - DELL - close: 15.36 change: -0.15 stop: 14.75

DELL under performed the NASDAQ with a 0.9% loss. Yet the stock is holding its up trend and technical support at the 50-dma. Readers can use this dip as a new entry point.

Our first target to take profits is at $16.95. Our second target is $19.75. DELL doesn't move super fast so this play could take several weeks. We'll plan to exit ahead of the mid November earnings report.

Entry on   October 06 at $15.51 
Change since picked:     - 0.15   			
Earnings Date          11/19/09 (unconfirmed)    
Average Daily Volume:      25.6 million 
Listed on   October 06, 2009    


General Electric - GE - close: 16.16 change: +0.08 stop: 14.75

GE is still struggling with short-term resistance at its 10-dma. I'm not suggesting new positions at this time.

GE has already hit our first target. We're currently aiming for $18.50. I do consider this an aggressive trade so we want to keep our positions small.

Entry on September 14 at $15.49 /gap higher entry
                             /originally listed at $15.35
Change since picked:     + 0.67
                            /1st target hit @ 17.25 (+11.3%)
Earnings Date          10/16/09 (confirmed)    
Average Daily Volume:        83 million 
Listed on September 14, 2009    


Gold Fields Ltd - GFI - close: 14.93 change: +0.04 stop: 12.99

There wasn't much follow through after yesterday's big rally in gold or the gold miners. Yet neither was there any profit taking. If you're looking for an entry point consider using a dip near $14.00.

Our first target is $15.75. I'm adding a second target at $19.75. The Point & Figure chart is very bullish with a $21 target.

Entry on September 30 at $13.78 
Change since picked:     + 1.15   			
Earnings Date          10/29/09 (unconfirmed)    
Average Daily Volume:       7.7 million 
Listed on September 30, 2009    


Starwood Hotels - HOT - close: 32.89 change: +0.20 stop: 28.95

HOT is still inching higher. Remember to use very small position sizes.

Our first target is $34.75. I am adjusting our second target to $39.00. FYI: HOT has above average short interest (more than 15% of the float).

Entry on   October 01 at $31.00
Change since picked:     + 1.89   			
Earnings Date          10/27/09 (unconfirmed)    
Average Daily Volume:       3.4 million 
Listed on September 19, 2009    


Microsoft - MSFT - close: 25.10 change: -0.01 stop: 23.70

It was a forgettable day for MSFT with shares churning sideways in a narrow range. I don't see any changes from my prior comments. Our target is $27.75.

Entry on      July 27 at $23.00
Change since picked:     + 2.10   			
Earnings Date          07/23/09 (confirmed)    
Average Daily Volume:        58 million 
Listed on  July 23, 2009    


NII Holdings - NIHD - close: 29.99 change: +0.95 stop: 27.60

NIHD displayed relative strength and tested resistance again near $30.50. The stock garnered some positive analyst comments this morning and a new price target at $46.00.

I am changing our entry point. The new plan is to open small position sizes (1/2 to 1/4 our normal size) with a trigger at $30.60. We'll use a stop loss under the October low at $27.60. Our first target is $33.75. FYI: The P&F chart is very bullish with a $57 target.

Entry on September xx at $xx.xx <-- TRIGGER @ 30.60 (was 26.75)
Change since picked:     + 0.00   			
Earnings Date          10/22/09 (unconfirmed)    
Average Daily Volume:       3.4 million 
Listed on September 23, 2009    


Patriot Coal - PCX - close: 12.32 change: +0.28 stop: 9.95

Coal stocks continue to look strong. PCX gained 2.3% o Wednesday. I would still consider new positions but readers may want to try and wait for a dip in the $11.50-11.00 zone before initiating positions.

I'm using a wide stop loss given PCX's recent volatility. Buy the stock now. We'll take profits at $13.90. We'll cautiously set a secondary target at $16.75 but the plan is to exit ahead of the late October earnings report.

Entry on   October 05 at $12.14 /gap open higher
                            /originally listed at $11.78
Change since picked:     + 0.18   			
Earnings Date          10/28/09 (unconfirmed)    
Average Daily Volume:       6.4 million 
Listed on   October 05, 2009    


Pride Intl. Inc. - PDE - close: 31.02 change: +0.63 stop: 28.25

PDE continues to show relative strength and is testing resistance at $31.00. Yesterday we raised our trigger to buy this stock to $31.15.

If triggered our first target is $34.75. We'll plan to exit ahead of the late October earnings report.

Entry on September xx at $xx.xx <-- see TRIGGER @ 31.15
Change since picked:     + 0.00   			
Earnings Date          10/29/09 (unconfirmed)    
Average Daily Volume:       3.7 million 
Listed on September 12, 2009    


Playboy Ent. - PLA - close: 2.87 change: -0.01 stop: 2.69

Nothing has changed. PLA is still under performing. The stock tried to bounce and failed under the $3.00 level. I will repeat my comments from yesterday that more conservative traders may want to exit early or raise their stops. The stock should have strong support near $2.80 and its 40-dma and exponential 200-dma. I'm not suggesting new positions at this time.

Our second target remains the $3.95 level. FYI: The Point & Figure chart is bullish with a long-term $7.50 target.

Entry on September 01 at $ 2.65
Change since picked:     + 0.22 
                            /take profits 09/16/09 (+17.7%)
Earnings Date          11/05/09 (unconfirmed)    
Average Daily Volume:       370 thousand
Listed on  August 29, 2009    


Pioneer Natural Res. - PXD - cls: 37.75 change: +0.26 stop: 33.40

I really hope we didn't miss the entry point today. Yesterday I raised our trigger to buy PXD to $36.50. This morning PXD dipped to $36.73 and rebounded back into positive territory. I'm going to keep our trigger at $36.50 for now. More aggressive traders may want to jump in on today's bounce.

If triggered our first target is $39.95. Our second target is $43.50. The Point & Figure chart is bullish with a $50 target.

Entry on September xx at $xx.xx <-- TRIGGER @ 36.50
Change since picked:     + 0.00   			
Earnings Date          11/04/09 (unconfirmed)    
Average Daily Volume:       2.1 million 
Listed on September 26, 2009    


Rockwell Automation - ROK - close: 41.26 change: -0.59 stop: 39.95

ROK is under performing with the bounce rolling over today. I'm going to give it one more session. If we don't see improvement tomorrow we'll exit early. Our first target is the $49.00 mark. Our time frame is several weeks.

Entry on September 10 at $43.71 /gap higher entry
                           /originally listed at $43.15
Change since picked:     - 2.45   			
Earnings Date          11/10/09 (unconfirmed)    
Average Daily Volume:       1.4 million 
Listed on September 10, 2009    


Market Vectors: Steel - SLX - close: 53.34 change: +0.49 stop: 47.49

The SLX looks poised to rally higher from here. Volume was pretty strong today.

Our first target is $54.75. Our second target is $59.50. Our time frame is several weeks.

Entry on   October 01 at $50.25 *triggered
Change since picked:     + 3.09   			
Earnings Date          00/00/00 
Average Daily Volume:       309 thousand
Listed on September 19, 2009    


Stryker Corp. - SYK - close: 44.61 change: -0.02 stop: 42.49

SYK gapped down but managed to rally twice from the $44.00 region. Readers may want to wait for a move over short-term resistance at $45.00 before launching bullish positions.

Our first target is $47.75.

Entry on   October 06 at $44.54 *new entry 
Change since picked:     + 0.07   			
Earnings Date          10/20/09 (confirmed)    
Average Daily Volume:       3.2 million 
Listed on   October 03, 2009    


Tractor Supply Co. - TSCO - close: 50.80 change: +0.24 stop: 47.40

I really expect TSCO to contract a bit and pull back toward the $49.50 region. Thus more patient traders may want to wait for that dip, which would offer a better entry point.

Our first target to take profits is at $54.75. Our second target is $57.45. FYI: The Point & Figure chart is very bullish with a $72 target.

Entry on   October 06 at $50.56 
Change since picked:     + 0.24   			
Earnings Date          10/21/09 (unconfirmed)    
Average Daily Volume:       384 thousand
Listed on   October 06, 2009    


BEARISH Play Updates

*We currently do not have any bearish play updates*