Kennametal Inc. - KMT - close: 41.49 change: +0.15

Stop Loss: 39.90
Target(s): 44.90
Current Gain/Loss: + 0.0%
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Company Description:
Kennametal Inc. delivers productivity to customers seeking peak performance in demanding environments by providing innovative custom and standard wear-resistant solutions. This proven productivity is enabled through our advanced materials sciences and application knowledge. Our commitment to a sustainable environment provides additional value to our customers. Companies operating in everything from airframes to coal mining, from engines to oil wells and from turbochargers to construction recognize Kennametal for extraordinary contributions to their value chains. In fiscal year 2010, customers bought approximately $1.9 billion of Kennametal products and services – delivered by our approximately 11,000 talented employees doing business in more than 60 countries – with more than 50 percent of these revenues coming from outside North America (source: company press release or website)

Why We Like It:
KMT has been trending higher for months. Shares are just now starting to rally again off technical support at its rising 50-dma. This looks like an opportunity to hop on board. We can place our stop loss under the 50-dma at $39.90. I would consider small bullish positions now or on a dip in the $41-40 zone. I am expecting the $45 level to offer some overhead resistance so we'll set our exit target at $44.90.

If you study the chart you'll note that the big down days in late January and early February had some huge volume. That is a worrisome sign so we want to keep our positions small to limit our risk. KMT does have options but they don't have a lot of volume so I'm going to stick to the stock itself.

- Small Bullish Positions -

Suggested Position: Buy KMT stock @ current levels

Annotated chart:

Entry on February 15 at $xx.xx
Earnings Date 04/28/11 (unconfirmed)
Average Daily Volume: 960 thousand
Listed on February 14th, 2010