Fuel Systems, Inc. – FSYS – close 32.44 change +.05 stop 29.39

Company Description:
Fuel Systems Solutions, Inc. (Fuel Systems) designs, manufactures and supplies alternative fuel components and systems for use in the transportation and industrial markets. Its components and systems control the pressure and flow of gaseous alternative fuels, such as propane and natural gas used in internal combustion engines. The Company also provides engineering and systems integration services to address its individual customer requirements for product performance, durability and physical configuration. It supplies its products and systems to the market place through a global distribution network of over 360 distributors and dealers in more than 70 countries and more than 100 original equipment manufacturers (OEMs).(source: company press release or website)

Why We Like It:
FSYS is approaching its 20-day SMA and upward trend line support and we are expecting a bounce. In addition, the stock has entered a recent resistance area which should now act as support and is also forming an ascending triangle. The company trades at about an 11 PE and its earnings have been steadily increasing over the past year. We expect the stock to rally into its earnings report on May 6. I suggest readers open long positions in FSYS if it trades down to $31.75. Aggressive traders may consider opening positions now. We are looking for a rally to a recent resistance area near $34.65, which is also our target. We have a more aggressive target at $37.00 but probably don't have enough time to reach it prior to the earnings report. We will use a stop at $29.39 which is below its 50-day SMA and the most recent swing low. Our time frame is about two weeks.

*NOTE: I consider this an aggressive position due to the stock's high beta and tendency to be volatile. Please use smaller position size to control risk*

Suggested Position: Buy FSYS if it trades tock @ $31.75

Annotated chart:

Entry on April xx at $xx.xx
Earnings Date 05/06/10 (unconfirmed)
Average Daily Volume: 720,000
Listed on April 22, 2010