Orion Marine Group, Inc. (NYSE: ORN) Q2 2011 Price Target

Recent price: 9.68$

P/E Ratio: 12.02

3 Months Target Price: 12$

Company Description

Orion Marine Group, Inc. is a marine specialty contractor serving the heavy civil marine infrastructure market. It provides a range of marine construction services on, over and under the water along the Gulf Coast, the Atlantic Seaboard and in the Caribbean Basin. In addition, it provides dredging, repair and maintenance, and other specialty services. Orion’s customers are federal, state and municipal governments, as well as private commercial and industrial enterprises.

Confidence Margins

Strong resistance $15.88 (+64%)

Light resistance $13.86 (+33%)

Light support $9.36 (-3%)

Strong support $8.00 (-17%)

Recommendation

Orion Marine Group has seen it's shares being surrendered by shareholders following the report of it's fourth quarter results. Following the announcement, earnings guidance for fiscal year 2011 didn't reassure investors. At current price levels, opening a long position will provided satisfactory returns.

Entry strategy

For the cautious investor:

Buy the stock for 10$ or less.

For the risk-taking trader:

The June 2011 10$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 55$ per contract.

Exit Strategy

For the cautious investor:

Sell when the stock reaches $12, or keep it until 15.50$ if you are more bullish in your own analysis.

For the risk-taking trader:

The contracts should be kept until the underlying reaches around 12$. This should provide a satisfactory return if the underlying reaches the target price as the contracts will get in the money.

Crude Carriers Corp. (NYSE: CRU) Q2 2011 Price Target

Recent price: 11.89$

P/E Ratio: 10.80

3 Months Target Price: 15$

Company Description

According to Reuters, Crude Carriers Corp. is a transportation company. The Company is focused on conducting a shipping business focused on the crude tanker industry. It is focused on acquiring and operating a fleet of crude tankers that will transport mainly crude oil and fuel oil along worldwide shipping routes.

Confidence Margins

Strong resistance $17.40 (+46%)

Light resistance $15.43 (+30%)

Light support $11.27 (-5%)

Strong support $10.00 (-16%)

Recommendation

Shares of Crude Carriers Corp fell sharply after a downgrade by an Analyst at Wells Fargo. There are some good grounds for the downgrade, but at present levels the company offers pretty good fundamental and technical value to those willing to take a long position at current prices.

Entry strategy

For the cautious investor:

Buy the stock for 12.50$ or less.

For the risk-taking trader:

The June 2011 12.50$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 50$ per contract.

Exit Strategy

For the cautious investor:

Sell when the stock reaches 15$, or keep it until 17$ if you are more bullish in your own analysis.

For the risk-taking trader:

The contracts should be kept until the underlying reaches around 15$. This should provide a satisfactory return if the underlying reaches the target price as the contracts will get in the money.

Valassis Communications Inc. (NYSE: VCI) Q2 2011 Price Target

Recent price: 26.15$

P/E Ratio: 3.51

3 Months Target Price: 30$

Company Description

Valassis Communications, Inc. is a media and marketing services company. The Company’s RedPlum portfolio of products and services delivers value on a weekly basis to more than 100 million shoppers across a multi-media platform, in the mailbox, in the newspaper, on the doorstep, in store and online. RedPlum and redplum.com provide consumers with local and national offerings across a multi-media platform on brands they want most. Its products and services are positioned to help its clients reach their customers through a mass-delivered or targeted program. The Company provides its clients with blended media solutions, including shared mail and newspaper delivery. Valassis operates through four business segments: Shared Mail, Neighborhood Targeted, Free-standing Inserts, and International, Digital Media & Services.

Confidence Margins

Strong resistance $33.48 (+28%)

Light resistance $30.15 (+15%)

Light support $25.70 (-2%)

Strong support $23.70 (-9%)

Recommendation

Valassis Communications' shares have been steadily trading down due to concerns of traders about it's forthcoming quarterly results. Even if it prove to be the case, current prices have fully integrated the news.

Entry strategy

For the cautious investor:

Buy the stock for 27$ or less.

For the risk-taking trader:

The June 2011 27.50$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 140$ per contract.

Exit Strategy

For the cautious investor:

Sell when the stock reaches 30$, or keep it until 33$ if you are more bullish in your own analysis.

For the risk-taking trader:

The contracts should be kept until the underlying reaches around 30$. This should provide a satisfactory return if the underlying reaches the target price as the contracts will get in the money.

New York Community Bancorp, Inc. (NYSE: NYB) Q2 2011 Price Target

Recent price: 16.16$

P/E Ratio: 13.04

3 Months Target Price: 18$

Company Description

New York Community Bancorp Inc. is a bank holding company and a producer of multi-family mortgage loans in New York City, with an emphasis on apartment buildings that feature below-market rents. It has two bank subsidiaries: New York Community Bank (the Community Bank), a thrift with 242 branches serving customers throughout Metro New York, New Jersey, Ohio, Florida, and Arizona, and New York Commercial Bank (the Commercial Bank), with 34 branches serving customers in Manhattan, Queens, Brooklyn, Long Island, and Westchester County in New York. The Community Bank operates through seven local divisions: Queens County Savings Bank in Queens; Roslyn Savings Bank on Long Island; Richmond County Savings Bank on Staten Island; Roosevelt Savings Bank in Brooklyn; Garden State Community Bank in New Jersey; Ohio Savings Bank in Ohio, and AmTrust Bank in Florida and Arizona. Similarly, the Commercial Bank operates 17 of its branches under the divisional name Atlantic Bank.

Confidence Margins

Strong resistance $19.33 (+20%)

Light resistance $17.86 (+11%)

Light support $16.06 (-1%)

Strong support $15.45 (-4%)

Recommendation

As many companies during earnings season this quarter, New York Community Bancorp, Inc. came short of what analysts were expecting, sending the shares plunging. This is a good entry point for the quarter as more economic news will state that conditions are improving.

Entry strategy

For the cautious investor:

Buy the stock for 16.50$ or less.

For the risk-taking trader:

The July 2011 17$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 25$ per contract.

Exit Strategy

For the cautious investor:

Sell when the stock reaches 18$, or keep it until 19$ if you are more bullish in your own analysis.

For the risk-taking trader:

The contracts should be kept until the underlying reaches around 18$. This should provide a satisfactory return if the underlying reaches the target price as the contracts will get in the money.

Wells Fargo & Company (NYSE: WFC) Q2 2011 Price Target

Recent price: 28.83$

P/E Ratio: 13.05

3 Months Target Price: 32.50$

Company Description

Wells Fargo & Company is a diversified financial services company. The Company provides banking, insurance, investments, mortgage banking, investment banking, retail banking, brokerage, and consumer finance through banking stores, the Internet and other distribution channels to consumers, businesses and institutions in 50 states, the District of Columbia, and in other countries. The Company operates in three segments: Community Banking, Wholesale Banking, and Wealth, Brokerage and Retirement. The Company provides other financial services through subsidiaries engaged in various businesses, principally: wholesale banking, mortgage banking, consumer finance, equipment leasing, agricultural finance, commercial finance, securities brokerage and investment banking, insurance agency and brokerage services, computer and data processing services, trust services, investment advisory services, mortgage-backed securities servicing and venture capital investment.

Confidence Margins

Strong resistance $34.25 (+19%)

Light resistance $32.63 (+13%)

Light support $28.21 (-2%)

Strong support $26.51 (-8%)

Recommendation

Shares of Wells Fargo dropped in huge volume after reporting earnings of 67 cents a share, barely beating estimates. Revenue dropped 5% to $20.33 billion, below analyst's views of $21.24 billion. Return on assets increased; net loan charge offs declined, year over year, for the quarter. Nonperforming assets and loans also both fell, indicating the lender is gradually navigating out of the financial crisis. As long as Berkshire Hathaway is not selling shares, this a good entry point in the company.

Entry strategy

For the cautious investor:

Buy the stock for 29.50$ or less.

For the risk-taking trader:

The July 2011 30$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 81$ per contract.

Exit Strategy

For the cautious investor:

Sell when the stock reaches 32.50$, or keep it until 34$ if you are more bullish in your own analysis.

For the risk-taking trader:

The contracts should be kept until the underlying reaches around 32.50$. This should provide a satisfactory return if the underlying reaches the target price as the contracts will get in the money.

Koninklijke Philips Electronics (NYSE: PHG) Q2 2011 Price Target

Recent price: 29.62$

P/E Ratio: 13.50

3 Months Target Price: 33$

Company Description

Data provided by Reuters tells us that Koninklijke Philips Electronics (Royal Philips Electronics) is the parent company of the Philips Group. Philips’ activities in the field of health and well-being are organized on a sector basis, which includes Healthcare, Consumer Lifestyle and Lighting. The Group Management & Services sector provides the operating sectors with support through shared service centers. As of December 31, 2010 Philips had 118 production sites in 27 countries, sales and service outlets in approximately 100 countries.

Confidence Margins

Strong resistance $34.27(+16%)

Light resistance $32.55 (+13%)

Light support $29.02 (-2%)

Strong support $26.81 (-9%)

Recommendation

The Koninklijke Philips Electronics conglomerate saw it's shares plunge after reporting first quarter financials that were very disappointing. Most of the losses were due to the TV unit. The company plans to sell the unit to raise cash for more profitable operations and this will prove to be beneficial for shareholders opening a long position now.

Entry strategy

For the cautious investor:

Buy the stock for 30$ or less.

For the risk-taking trader:

The July 2011 30$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 175$ per contract.

Exit Strategy

For the cautious investor:

Sell when the stock reaches 33$, or keep it until 34$ if you are more bullish in your own analysis.

For the risk-taking trader:

The contracts should be kept until the underlying reaches around 33$. This should provide a satisfactory return if the underlying reaches the target price as the contracts will get in the money.

DeVry Inc (NYSE: DV) Q2 2011 Price Target

Recent price: 48.28$

P/E Ratio: 11

3 Months Target Price: 56$

Company Description

DeVry Inc. is a provider of educational services and the parent organization of Advanced Academics, Becker Professional Education, Carrington College and Carrington College California, Chamberlain College of Nursing, DeVry Brasil, DeVry University, and Ross University. These institutions offer a range of programs in business, healthcare and technology and serve students in middle school through postsecondary education, as well as accounting and finance professionals. DeVry University provides bachelor’s and master’s degree programs in technology; science, business and the arts. DeVry University is a private, degree-granting, regionally accredited, higher education systems in North America. Ross University is a provider of medical and veterinary medical education. Chamberlain College of Nursing offers associate, bachelor’s, master’s and degree completion programs in nursing at its seven campuses in the United States and online.

Confidence Margins

Strong resistance $59.53 (+23%)

Light resistance $56.43 (+17%)

Light support $48.03 (-1%)

Strong support $40.25 (-17%)

Recommendation

Shares of DeVry Inc have not been spared by the wave of negativity hitting the whole industry of private education as they are announcing first quarter results that are coming very short of what analysts were expecting. Keep this stock on watch as it could yield good returns.

Entry strategy

For the cautious investor:

Buy the stock for 50$ or less.

For the risk-taking trader:

The August 2011 50$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 420$ per contract.

Exit Strategy

For the cautious investor:

Sell when the stock reaches 56$, or keep it until 59$ if you are more bullish in your own analysis.

For the risk-taking trader:

The contracts should be kept until the underlying reaches around 56$. This should provide a satisfactory return if the underlying reaches the target price as the contracts will get in the money.

Radian Group Inc. (NYSE: RDN) Q2 2011 Price Target

Recent price: 5.40$

P/E Ratio: -

3 Months Target Price: 8$

Company Description

According to Reuters, Radian Group Inc. is a credit enhancement company. The Company operates in three business segments: mortgage insurance, financial guaranty and financial services. The mortgage insurance business provides credit protection for mortgage lenders and other financial services companies on residential mortgage assets. The financial guaranty business has provided insurance and reinsurance of municipal bonds, structured finance transactions and other credit-based risks. Its financial services business consists mainly of its minority ownership interest in Sherman Financial Group LLC, a consumer asset and servicing firm specializing in credit card and bankruptcy-plan consumer assets.

Confidence Margins

Strong resistance $9.73 (+80%)

Light resistance $8.20 (+52%)

Light support $5.27 (-2%)

Strong support $4.50 (-17%)

Recommendation

MGIC, a direct competitor of Radian Group, sparked the slide by reporting a wider first-quarter loss than expected. MGIC's troubles spell bad news for the entire mortgage insurance industry, because the terrible results stem from a sudden rise in claim payouts.Nearly 14% of MGIC's insured mortgage loans are currently delinquent. This is currently a worst case scenario that will reverse as the economic situation continues to improve.

Entry strategy

For the cautious investor:

Buy the stock for 6$ or less.

For the risk-taking trader:

The August 2011 6$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 60$ per contract.

Exit Strategy

For the cautious investor:

Sell when the stock reaches 8$, or keep it until 9$ if you are more bullish in your own analysis.

For the risk-taking trader:

The contracts should be kept until the underlying reaches around 8$. This should provide a satisfactory return if the underlying reaches the target price as the contracts will get in the money.

Meritor Inc. (NYSE: MTOR) Q2 2011 Price Target

Recent price: 16.58$

P/E Ratio: -

3 Months Target Price: 20$

Company Description

Meritor Inc., formerly ArvinMeritor, Inc., incorporated in 2000, is a global supplier of a range of integrated systems, modules and components to original equipment manufacturers (OEMs) and the aftermarket for the commercial vehicle, transportation and industrial sectors. The company serves commercial truck, trailer, off-highway, military, bus and coach and other industrial OEMs and certain aftermarkets, and light vehicle OEMs. It operates in three segments: The Commercial Truck, The Industrial segment and The Aftermarket & Trailer segment. Its products are axles, undercarriages, drivelines, brakes and braking systems, and roofs and door systems. ArvinMeritor serves a range of customers worldwide, including medium- and heavy-duty truck OEMs, specialty vehicle manufacturers, certain aftermarkets, trailer producers and light vehicle OEMs.

Confidence Margins

Strong resistance $22.65 (+37%)

Light resistance $20.28 (+22%)

Light support $14.92 (-10%)

Strong support $13.60 (-18%)

Recommendation

This stock is technically poised for good returns, there is good strength in the current uptrend and the related resistances are still quite a way up.

Entry strategy

For the cautious investor:

Buy the stock for 17$ or less.

For the risk-taking trader:

The August 2011 17$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 175$ per contract.

Exit Strategy

For the cautious investor:

Sell when the stock reaches 20$, or keep it until 22$ if you are more bullish in your own analysis.

For the risk-taking trader:

The contracts should be kept until the underlying reaches around 20$. This should provide a satisfactory return if the underlying reaches the target price as the contracts will get in the money.

China New Borun Corp (NYSE: BORN) Q2 2011 Price Target

Recent price: 9.51$

P/E Ratio: 5.51

3 Months Target Price: 14.50$

Company Description

According to data obtained from Reuters, China New Borun Corporation, incorporated on July 15, 2008, is a producer and distributor of corn-based edible alcohol in the People's Republic of China based on tons of edible alcohol produced. The Company’s edible alcohol products are primarily sold as an ingredient to producers of baijiu, who further blend the Company’s products into finished products sold under various brand names throughout China. Baijiu is a grain-based alcoholic beverage made from corn, wheat or barley, clear in color, with alcohol content ranging from 18% to 68%. Baijiu is sold throughout China in retail stores, bars, banquet halls, restaurants and other locations, where alcoholic beverages are consumed.

During the production of edible alcohol, the Company also produces DDGS Feed and corn germ as by-products, which are sold separately from its edible alcohol. It is also constructing facilities to manufacture liquid carbon dioxide from waste carbon dioxide emitted during the production process, in order to create an additional stream of revenue. The Company owns and operates two facilities: one in Shouguang, Shandong Province and the other in Daqing, Heilongjiang Province. Its Shouguang facility has an annual production capacity of 160,000 tons of corn-based edible alcohol (90,000 tons of Grade B edible alcohol and 70,000 tons of Grade C edible alcohol). Its Daqing facility has an annual production capacity of 100,000 tons of corn-based edible alcohol (70,000 tons of Grade B edible alcohol and 30,000 tons Grade C edible alcohol). The Company is also constructing an additional 120,000 tons of capacity (all Grade B edible alcohol) at its Daqing facility.

Confidence Margins

Strong resistance $20.50 (+116%)

Light resistance $14.75 (+55%)

Light support $7.59 (-20%)

Strong support $6.65 (-30%)

Recommendation

Fourth Quarter results and revenue guidance for the coming year provided by the company came short of what analysts were expecting. This sent the stock on a slow path down. The company is still comfortably profitable and offers great value at current prices.

Entry strategy

For the cautious investor:

Buy the stock for 10$ or less.

For the risk-taking trader:

The September 2011 10$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 190$ per contract.

Exit Strategy

For the cautious investor:

Sell when the stock reaches 14.50$, or keep it until 20$ if you are more bullish in your own analysis. It is highly recommended to keep the position on check if it goes sour as there is a lot of uncertainty with Chinese based companies.

For the risk-taking trader:

The contracts should be kept until the underlying reaches around 14.50$. This should provide a satisfactory return if the underlying reaches the target price as the contracts will get in the money.

AgFeed Industries Inc. (NASDAQ: FEED) Q2 2011 Price Target

Recent price: 1.69$

P/E Ratio: -

3 Months Target Price: 2.50$

Company Description

AgFeed Industries, Inc. is engaged in the animal nutrition and commercial hog producing businesses in the People's Republic of China through its indirect operating subsidiaries. It operates in two segments: animal feed nutrition and hog production. The Company’s animal nutrition business consists of the research and development, manufacture, marketing and sale of additive premix (premix), concentrates and complete feed for use in the domestic animal husbandry markets, primarily for hog production in China. The Company operates five premix feed manufacturing facilities located in the cities of Nanchang, Shandong, Shanghai, Nanning and Hainan. It mainly produces hogs for slaughter and sells breeding stock.

Confidence Margins

Strong resistance $3.44 (+104%)

Light resistance $3.15 (+86%)

Light support $1.52 (-10%)

Strong support $1.45 (-14%)

Recommendation

Operations proved to be disappointing for AgFeed Industries. The company's stock was severely hit afterwards. those circumstances still provide investors with an opportunity to make great profits, mostly considering that the company is trading under book value per share.

Entry strategy

For the cautious investor:

Buy the stock for 1.75$ or less.

For the risk-taking trader:

The August 2011 2$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 25$ per contract.

Exit Strategy

For the cautious investor:

Sell when the stock reaches 2.50$, or keep it until 3.25$ if you are more bullish in your own analysis.

For the risk-taking trader:

The contracts should be kept until the underlying reaches around 3$. This should provide a satisfactory return if the underlying reaches the target price as the contracts will get in the money.

Arena Pharmaceuticals Inc. (NASDAQ: ARNA) Q2 2011 Price Target

Recent price: 1.29$

P/E Ratio: -

3 Months Target Price: 2$

Company Description

Data provided by Reuters explains that Arena Pharmaceuticals Inc, incorporated on April 14, 1997, is a clinical-stage biopharmaceutical company focused on discovering, developing and commercializing oral drugs that target G protein-coupled receptors (GPCRs), in four major therapeutic areas: cardiovascular, central nervous system, inflammatory and metabolic diseases. The Company’s advanced drug candidate is lorcaserin hydrochloride (lorcaserin), for weight management, which has completed a pivotal Phase III clinical trial program. In December 2009, it submitted a new drug application (NDA), for lorcaserin to the United States Food and Drug Administration (FDA), for regulatory approval. In addition to lorcaserin, its internal development programs include APD791, APD916 and APD811, all of which are oral drug candidates. APD791 is a selective inverse agonist of the serotonin IIA receptor intended for the treatment of arterial thrombosis and other related conditions, and it has completed Phase Ia and Phase Ib clinical trials. APD916 is histamine H3 inverse agonist intended for the treatment of narcolepsy and cataplexy, and it has filed an investigational new drug (IND), application for this drug candidate. APD811 is a selective agonist of the prostacyclin receptor intended for the treatment of pulmonary arterial hypertension, and it is in preclinical development.

Confidence Margins

Strong resistance $2.38 (+84%)

Light resistance $2.23 (+73%)

Light support $1.26 (-2%)

Strong support $1.16 (-10%)

Recommendation

Since the end of January, Arena Pharmaceuticals Inc has announced a workforce reduction, the departure of their CFO, poor guidance for their fiscal year 2011 and finally continued uncertainty regarding the quick approval of their Lorcaserin drug. Current prices have anticipated the worst and now seems like the right time to open a long position.

Entry strategy

For the cautious investor:

Buy the stock for 1.50$ or less. Keep this position on close watch as the light support is only pennies down.

For the risk-taking trader:

The July 2011 1$ call option contract seems to be the right position to take as it offers a fair potential of profit, they can be acquired for about 37$ per contract.

Exit Strategy

For the cautious investor:

Sell when the stock reaches 2$, or keep it until 2.25$ if you are more bullish in your own analysis.

For the risk-taking trader:

The contracts should be kept until the underlying reaches around 2$. This should provide a satisfactory return if the underlying reaches the target price as the contracts will get in the money.

Frontline Ltd. (NYSE: FRO) Q2 2011 Price Target

Recent price: 22.51$

P/E Ratio: 10.86

3 Months Target Price: 27.50$

Company Description

According to Reuters' data, Frontline Ltd. is a shipping company. The Company is engaged primarily in the ownership and operation of oil tankers and oil/bulk/ore (OBO) carriers, which are configured to carry dry cargo. It operates oil tankers of two sizes: very large crude carriers (VLCCs), which are between 200,000 and 320,000 deadweight tons (dwt) and Suezmaxes, which are vessels between 120,000 and 170,000 dwt. It operates through subsidiaries and partnerships located in the Bahamas, Bermuda, the Cayman Islands, the Isle of Man, Liberia, Norway, the United Kingdom and Singapore. It is also involved in the charter, purchase and sale of vessels.

Confidence Margins

Strong resistance $33.95 (+51%)

Light resistance $27.51 (+22%)

Light support $22.33 (-1%)

Strong support $20 (-11%)

Recommendation

Since reporting it's results for the fourth quarter of 2010, Frontline Ltd saw it's share price steadily go down following the CEO's grim comments about the state of the industry for the coming quarter. current price levels are a good entry point to acquire shares of a company with a good historic operating performance.

Entry strategy

For the cautious investor:

Buy the stock for 23$ or less.

For the risk-taking trader:

The August 2011 23$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 155$ per contract.

Exit Strategy

For the cautious investor:

Sell when the stock reaches 27.50$, or keep it until 33$ if you are more bullish in your own analysis.

For the risk-taking trader:

The contracts should be kept until the underlying reaches around 27.50$. This should provide a satisfactory return if the underlying reaches the target price as the contracts will get in the money.

iGo Inc. (NASDAQ: IGOI) Q2 2011 Price Target

Recent price: 2.45$

P/E Ratio: 107.83

3 Months Target Price: 4$

Company Description

According to data provided by Reuters, iGo, Inc. is a provider of products and solutions for the electronics industry. iGo sells its products through retailers, such as RadioShack Corporation; resellers, such as Superior Communications and Ingram Micro, Inc.; wireless carriers, such as AT&T; and directly to end users through its iGo brand Website, www.igo.com. Its power products, marketed under its iGo and iGo Green brands, include a range of green alternate current (AC), direct current (DC), combination AC/DC and battery-powered universal power adapters, as well as its developed line of green surge protectors. The Company has three segments: High-Power Group, Low-Power Group and Connectivity Group.

Confidence Margins

Strong resistance $5.19 (+112%)

Light resistance $4.12 (+68%)

Light support $2.35 (-4%)

Strong support $1.80 (-27%)

Recommendation

iGo Inc reported results for it's fourth quarter of 2010 that proved to be very disappointing compared to what analysts were expecting. This sent the company's stock down, thus offering investors with a good entry point for the quarter.

Entry strategy

For the cautious investor:

Buy the stock for 2.55$ or less.

For the risk-taking trader:

The June 2011 2.50$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 150$ per contract.

Exit Strategy

For the cautious investor:

Sell when the stock reaches 4$, or keep it until 5$ if you are more bullish in your own analysis.

For the risk-taking trader:

The contracts should be kept until the underlying reaches around 4$. This should provide a satisfactory return if the underlying reaches the target price as the contracts will get in the money.

Southern Copper Corporation (NYSE: SCCO) Q2 2011 Price Target

Recent price: 35.44$

P/E Ratio: 19.83

3 Months Target Price: 27.50$

Company Description

Southern Copper Corporation is an integrated copper producer. SCC produces copper, molybdenum, zinc and silver. All of the Company's mining, smelting and refining facilities are located in Peru and in Mexico, and it conducts exploration activities in those countries and Chile. Its Peruvian copper operations involve mining, milling and flotation of copper ore to produce copper concentrates and molybdenum concentrates; the smelting of copper concentrates to produce anode copper, and the refining of anode copper to produce copper cathodes. It operates the Toquepala and Cuajone mines in the Andes Mountains, approximately 860 kilometers southeast of the city of Lima, Peru. The Company also operates a smelter and refinery west of the Toquepala and Cuajone mines in the coastal city of Ilo, Peru. The Company operates in three segments: Peruvian operations, Mexican open-pit operations and Mexican underground mining operations (IMMSA unit).

Confidence Margins

Strong resistance $50.35 (-38%)

Light resistance $42.35 (-16%)

Light support $35.68 (+2%)

Strong support $27.53 (+24%)

Recommendation

This is one of the rare short positions suggested for the coming quarter. As China keeps getting more restrictive in it's monetary and fiscal policy, there seems to be a link with the price of copper. This might prove to be an interesting position for the quarter.

Entry strategy

For the cautious investor:

Short sell the stock for 35$ or more.

For the risk-taking trader:

The June 2011 36$ out-of-the-money put option contract seems to be the right position to take, they can be acquired for about 255$ per contract.

Exit Strategy

For the cautious investor:

Buy to cover when the stock reaches 27$.

For the risk-taking trader:

The contracts should be kept until the underlying reaches around 27$. This should provide a satisfactory return if the underlying reaches the target price as the contracts will get in the money.