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Eagle Materials Inc - EXP - close: 82.90 chg: +2.41 stop: 78.50

Company Description:
Eagle Materials Inc. is a Dallas-based company that manufactures and distributes Cement, Gypsum Wallboard, Recycled Paperboard, Concrete and Aggregates. (source: company website)

Why We Like It:
As you know the construction business and homebuilding sector has been booming in this country. Just today the housing starts came out at a 21-year high. Of course the homebuilding stocks have been soaring and we hesitate to jump in again without a significant pull back. Fortunately, one of the raw materials companies that supply the sector is offering investors a pull back. EXP was actually spun off from homebuilder Centex (CTX) last year and the stock has been a winner ever since. Currently shares are beginning to bounce from a 38.2 percent Fibonacci retracement of its October to December rally. The MACD indicator has produced a new buy signal and its other technical oscillators look positive as well. We also like the bullish P&F chart with a new double-top breakout buy signal and a $92 price target. We plan to use today's breakout over the 40 and 50-dma's as an entry point. While there is some resistance in the $85-86 level our target is the $90.00 level.

Suggested Options:
We will suggest the April calls.

BUY CALL APR 80 EXP-DP OI= 30 current ask $5.20
BUY CALL APR 85 EXP-DQ OI=516 current ask $2.60
BUY CALL APR 90 EXP-DR OI=250 current ask $1.10 *higher risk*


 

Picked on February 16 at $ 82.90
Change since picked: + 0.00
Earnings Date 01/26/05 (confirmed)
Average Daily Volume = 107 thousand

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Spectrasite Inc - SSI - close: 61.80 chg: +1.95 stop: 58.00

Company Description:
SpectraSite, Inc. (www.spectrasite.com), based in Cary, North Carolina, is one of the largest wireless tower operators in the United States. At September 30, 2004, SpectraSite owned or operated approximately 10,000 revenue producing sites, including 7,802 towers and in-building systems primarily in the top 100 markets in the United States. SpectraSite's customers are leading wireless communications providers, including Cingular, Nextel, Sprint PCS, T-Mobile and Verizon Wireless. (source: company website)

Why We Like It:
We like SSI for its relative strength and bullish technical breakout today. The stock has been a consistent winner the past several months but the rate of climb slowed in December through February. That allowed SSI to pull back toward its long-term rising trendline of support (see chart). Shares rallied strongly off that trendline today with a little help from Bear Stearns. The firm reiterated their "out perform" rating on the stock and raised their price target to $73. Volume on today's rally was almost three times the norm, which typically a bullish signal too. We want to go long here (or anywhere above $60) and target a run towards $66-67.

Suggested Options:
We are going to suggest the April calls.

BUY CALL APR 55 SSI-DK OI=105 current ask $8.10
BUY CALL APR 60 SSI-DL OI= 36 current ask $4.30
BUY CALL APR 65 SSI-DM OI= 20 current ask $1.60


 

Picked on February 16 at $ 61.80
Change since picked: + 0.00
Earnings Date 03/14/05 (confirmed)
Average Daily Volume = 391 thousand

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