Food Producer Stock Positioned for a Boost!

By: Jeff Neal | Mon, Jan 4, 2010
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1/4/2010 6:47:24 PM

Trading Approach

Identifying fundamentally stellar stocks poised technically to breakout for big profits.

Company Description

ConAgra Foods (CAG) operates as a food company in North America and internationally. It operates in two segments, Consumer Foods and Commercial Foods.. The company was founded in 1919 and is headquartered in Omaha, Nebraska.

Fundamental Picture

This company has stellar fundamentals led by impressive earnings growth and expanding operating margins.

Technical Outlook

ConAgra has a nice long-term uptrend in place, which is being confirmed by the recent bullish MACD crossover. Combine this with a strong fundamental profile makes this stock an attractive trade opportunity.

Trading Action Plan for the Week

Stock Entry: Buy shares of ConAgra (CAG) at 22.98 or better.

Option Entry: Buy the March 22.5 call (CAGCK) at 1.10 or better.

Profit Target Exit: 25.30.

Please note that we will use this price as an initial guide but we will gradually move up our trailing stop to realize as much of the breakout as possible while protecting our profits.

Stop-loss Exit: 21.70.

As the stock starts to breakout we will move the trailing stop up to protect any accrued profits on our stock and option positions.

Review of Open Positions

Trade Date Symbol Trade Trade Comments
11-23-09 HIG Long the stock at 25.16 and long the January 25 call at 1.60. Keep the profit target at 41 and keep the stop at 23. Will look to roll the option or exit this week due to the fact that we are approaching expiration.
12-28-09 BBD Long the February 20 call at 1.65 and long the stock at 20.95. Keep the profit target at 27 and move the trailing stop to 22.20 to protect profits.

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Jeff Neal

Author: Jeff Neal

Jeff Neal
stockbarometer.com

Jeff Neal

Jeff Neal has been actively and successfully trading the markets since 1996. He holds an MBA in Finance from the University of Indianapolis and a bachelor's degree in Computer Science from Indiana University. Jeff is a veteran trader consistently posting profits by strategically applying options to the stock and ETF markets. As an expert risk manager Jeff combines technical analysis, fundamental analysis and options to create an optimal risk to reward profile. Jeff has been a longtime trading mentor and a prolific writer that has had many articles published. He is an author having featured articles in Futures magazine and Stocks and Commodities magazine. Over the years Jeff has interviewed many of the top traders in the business discussing the secrets of their trading success. In addition to his trading and writing experience, he also was a radio show market correspondent discussing the best stocks and options for the week. Jeff is passionate about trading the markets and as a mentor he constantly emphasizes that concentrating on risk management has been the cornerstone of his trading success.

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