Hanson Natural Corp. - HANS - close 41.24 change 0.00 stop 39.25

Company Description:
Hansen Natural Corporation (Hansen) is a holding company. The Company, through its subsidiaries develops, markets, sells and distributes alternative beverage category natural sodas, fruit juices, juice blends, juice drinks, energy drinks and energy sports drinks, fruit juice smoothies and functional drinks, non-carbonated ready-to-drink iced teas, children’s multi-vitamin juice drinks, Junior Juice juices, Junior Juice Water and flavored sparkling beverages under the Hansen’s brand name. Hansen operates in two segments: Direct Store Delivery (DSD), whose principal products comprise primarily energy drinks, and Warehouse (Warehouse), whose principal products comprise primarily juice based and soda beverages. It develops, markets, sells and distributes energy drinks under the brand names, Monster Energy; Monster Hitman Energy Shooter and Lost Energy brand names, as well as Rumba, Samba and Tango brand energy juices.(source: company press release or website)

Why We Like It:
HANS is approaching an upward trend line and a recent support/resistance level at about $40.50. In addition, the stock is forming an ascending triangle and is approaching the bottom portion of an upward channel that has been intact since mid 2009 (see weekly chart below). I am waiting for HANS to trade to $40.50 which I suggest readers use as a trigger to buy calls. I believe the stock will bounce from these levels as long as the overall market is cooperating. However, if there is overall market weakness I urge readers to use caution when entering long positions. The company also reports earnings on May 6 so we will be out of this trade prior to the report. Let's use a stop of $39.25. Our target is $43.40 and our time frame is 1 to 2 weeks.

Trigger to buy calls at $40.50

Suggested Position: Buy MAY CALL $42, current ask $1.35, estimated ask at entry $1.00

Annotated Weekly Chart:

Entry on April xx at $ xx.xx
Earnings Date 5/06/10
Average Daily Volume = 854,000
Listed on April 21, 2010