Carpenter Technology - CRS - close: 47.31 change: +3.34

Stop Loss: 43.45 (stock)
Target(s): 52.25, 57.50
Current Gain/Loss: unopened
Time Frame: 1 to 3 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The stock market sold off for over two weeks. Yet CRS really did not start to sink until a week ago. When the market collapsed yesterday CRS found support near its prior highs at $44.00. Shares are also near their 200-dma. You can look at the weekly chart and see that CRS never broke its long-term up trend of lower highs.

I am suggesting bullish positions now but we only want to initiate positions if both CRS and the S&P500 index open positive tomorrow. We will use a stop loss at $43.45 for the stock position but I am not using a stop loss on the option position. We do want to keep our position size small to limit our risk.

We are listing the August calls but keep in mind these expire in less than two weeks.

open bullish positions if CRS & the S&P500 open positive tomorrow.

Suggested Position: buy CRS stock @ the open

- or -

buy the AUG $50 call (CRS1120H50) current ask $0.95

Daily chart:

Weekly chart:

Entry on August xx at $ xx.xx
Earnings Date 10/26/11 (unconfirmed)
Average Daily Volume = 622 thousand
Listed on August 9, 2011