MdDermott Intl. Inc. - MDR - close: 14.78 change: +0.59

Stop Loss: 13.95
Target(s): 17.90
Current Gain/Loss: unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Worries over a global slowdown seem to be fading. That should make investors more comfortable owning a heavy construction stock like MDR. Shares have been consolidating sideways under resistance near $15.00 for the last couple of weeks. A breakout should signal a new leg higher. I am suggesting a trigger to launch bullish positions at $15.15. If triggered our target is $17.90 since broken support at $18.00 should be resistance.

I do have a few concerns with possible resistance at the simple 100-dma and the exponential 200-dma above. Plus, MDR is due to report earnings in the middle of November. Normally we do not want to hold over the earnings report. If we choose to exit ahead of earnings that's going to impact our time for this trade to work.

FYI: The Point & Figure chart for MDR is bullish with a $24.50 target.

Trigger @ 15.15

Suggested Position: buy MDR stock @ $15.00

- or -

buy the NOV $15 call (MDR1119K15) current ask $0.95

Annotated chart:

Entry on October xx at $ xx.xx
Earnings Date 11/08/11 (unconfirmed)
Average Daily Volume = 4.8 million
Listed on October 24, 2011