NEW BULLISH Plays
Quicksilver Resources, Inc. - KWK - close 12.83 change +0.23 stop 11.75
Quicksilver Resources Inc. (Quicksilver) is an independent energy company. The Company is primarily engaged in exploration, development and production of unconventional natural gas onshore in North America. Quicksilver owns producing oil and natural gas properties in the United States, principally in Texas, Colorado, Wyoming and Montana, and Canada in Alberta and British Columbia. As of December 31, 2009, it had total proved reserves of approximately 2.4 trillion cubic feet equivalents (Tcfe) of natural gas. Quicksilver also has exploration activities in North America, principally in the Horn River Basin of Northeast British Columbia and the Green River Basin of Colorado. It also owns approximately 61% of Quicksilver Gas Services LP (KGS), a midstream master limited partnership controlled by Quicksilver. It owns approximately 40% of the limited partner units of BreitBurn Energy Partners L.P. (BBEP), an oil and natural gas exploration and production master limited partnership. (source: company press release or website)
Key Support Areas: 12.35, 12.00
Key Resistance Areas: 13.25, 14.00
Time Frame: Several weeks
Why We Like It:
Natural has built a nice base over the last two months and I believe the commodity and natural gas stocks are due for a rally. KWK has exhibited great overall strength during the past week as the overall market has been under pressure. The stock has very strong support at $12.00 which was a prior resistance level dating back to October 2008. KWK has been trading in sideways channel between $12.00 and $16.00 for the past 9 months and now finds itself at the lower end of the channel. The stock broke an upward trend line from November 2009 w weeks ago and I am looking for it to turn back higher and retest the back side of that trend line which is right where our target is at $14.25. This price is about +11% higher than today's price. In addition, KWK made a double bottom from 11/2009 and 2 weeks ago and has responded nicely. I suggest readers initiate long positions at current levels to take advantage of the momentum. We are going to place a wide stop at $11.75 which is below the double bottom and sideways channel.
Suggested Position: Long KWK Stock at current levels.
Annotated Weekly Chart:
Entry on May xx
Earnings Date More than 2 months (unconfirmed)
Average Daily Volume: 3.0 million
Listed on 5/15/10, 2010
<-- NEW SHORT PLAYS -->
NEW BEARISH Plays
Leggett & Platt, Inc. - LEG - close 24.08 change -0.23 stop 25.35
Leggett & Platt, Incorporated is an international manufacturer, which conceives designs and produces a range of engineered components and products found in many homes, offices, retail stores and automobiles. The Companyâ€™s operations are organized into 19 business units, which are divided into 10 groups under four segments: Residential Furnishings; Commercial Fixturing & Components; Industrial Materials; and Specialized Products. The Residential Furnishings segment includes Bedding Group, Furniture Group, and Fabric and Carpet Underlay Group. The Commercial Fixturing & Components Segment includes Fixtures & Display Group, and Office Furniture Components Group. The Industrial Materials Segment includes Wire Group and Tubing Group. (source: company press release or website)
Key Support Areas: 23.75, 23.00
Key Resistance Areas: 24.75, 25.15
Time Frame: Several Weeks
Why We Like It:
LEG is making a lower high on its daily chart and appears overextended at these levels. The stock has upward trend line support below but this support is about -8% lower from current levels. Resistance just overhead includes downward trend line resistance and recent highs at $24.75 and $25.15. I am looking for LEG to trade lower from here to about the $22.25 area which is our target. I suggest readers take advantage of this by initiating short positions in the stock. The overall market looks vulnerable here and LEG probably won't be spared. Our stop is $25.35.
Suggested Position: Short LEG stock at current levels.
Suggested Position: Buy JUNE $25.00 PUT, current ask $1.75
Entry on May xx
Earnings More than 2 months (unconfirmed)
Average Daily Volume: 2 million
Listed on May 15, 2010