NEW DIRECTIONAL CALL PLAYS
Dresser-Rand Group - DRC - close 37.46 change +0.78 stop 36.15
Target(s): 39.00, 39.95, 41.40
Key Support/Resistance Areas: 42.00, 40.00, 39.15, 37.50, 36.30
Time Frame: 2 to 3 weeks
Dresser-Rand Group Inc. is the global supplier of custom-engineered rotating equipment solutions for the applications in the oil, gas, petrochemical and industrial process industries. The Company's products and service are used in applications, such as gas gathering, gas recompression and export, gas lift and high pressure re-injection; carbon dioxide (CO2) re-injection, enhanced oil recovery, main refrigeration compression and other duties for liquefied natural gas (LNG) plants; gas transmission and storage, as well as gas processing; a variety of refinery services; ammonia and methanol synthesis gas, and ethylene and other petrochemical services and chemical plant services. The Company provides a range of products and services to its worldwide client base in over 140 countries from its global locations.
Why We Like it:
DRC has been in a bullish uptrend since its lows in the fall of 2008. The stock is now finding support at its 50-day SMA and looks poised to test its highs from 2007. We have a good reference point to place a stop below yesterday's lows at $36.15. Currently, the primary target is $39.95 which should produce a profit of +90% on options positions.
Suggested Position: Buy November $40.00 CALL, current ask $0.75
Entry on October XX
Earnings 10/28/2010 (unconfirmed)
Average Daily Volume: 570,000
Listed on October 5, 2010