New Plays, Wednesday, 04/23/2008
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Aracruz Celulose - ARA - cls: 78.93 chg: +0.75 stop: 74.75
Aracruz Celulose is a Brazilian company, the world's leading producer of
bleached eucalyptus pulp. It is responsible 24% of the global supply of the
product, used to manufacture printing and writing, tissue, and high value added
specialty papers. (source: company press release or website)
Why We Like It:
ARA is another Brazilian company who's stock is near all-time highs. Shares
actually rallied in spite of the recent lackluster earnings report in early
April. The stock is poised to breakout over resistance at $80.00. We're
suggesting a trigger to buy calls at $80.25. The stock has been somewhat
volatile this past week so we're using a wide, aggressive stop loss at $74.75
and more conservative traders may want to use a stop near $77 instead. If
triggered at $80.25 we have two targets.
Our first target is the $84.50-85.00
range. Our second target is the $88.50-90.00 zone. Currently the Point & Figure
chart is bearish but a new rise over $80.00 would produce a brand new triple-top
breakout buy signal.
We are suggesting the June or July calls. July's have more open interest.
BUY CALL JUN 75.00 ARA-FO open interest= 0 current ask $6.70
BUY CALL JUN 80.00 ARA-FP open interest=30 current ask $4.10
BUY CALL JUN 85.00 ARA-FQ open interest= 0 current ask $2.40
BUY CALL JUL 80.00 ARA-GP open interest=44 current ask $5.40
BUY CALL JUL 85.00 ARA-GQ open interest=217 current ask $3.60
Picked on April xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/07/08 (confirmed)
Average Daily Volume = 481 thousand