3SOF

AZZ is having this rebound, but the trend is bearish and fundamentals point downward.

Anyway, the plan is the plan, I'll just follow it:

Trading Plan:

1. Buy to cover at the $25 support level;
2. Exit with a small loss if AZZ is set to close above $31.

Trading Plan:

1. Buy to cover at the $25 support level;
2. Exit with a small loss if AZZ is set to close above $31.

Trading Plan:

1. Buy to cover at the $25 support level;
2. Exit with a small loss if AZZ is set to close above $31.

Trading Plan:

1. Buy to cover at the $25 support level;
2. Exit with a small loss if AZZ is set to close above $31.

Trading Plan:

1. Buy to cover at the $25 support level;
2. Exit with a small loss if AZZ is set to close above $31.

AZZ seems to be making a higher low, instead of the lower low towards the $25 support level I was expecting. I guess this is due to analysts maintaining their "buy" ratings on the stock, despite the weakness over the last reported quarter.

Also about a week ago, research firm BOE securities initiated coverage with a "buy" rating for AZZ and $33 price target. I wouldn't consider this all that much, but the talk they gave will pose problems for the bears in taking AZZ down to a valuation of just 10 times earnings as I initially thought:

«Strong Demand for Products in End Markets: AZZ serves end markets like power generation, transmission & distribution and petro-chemical etc. We believe the near-term outlook for these sectors remain strong and will continue to drive the company's revenue growth. We are very optimistic on alternative energy sectors like solar and wind energy, where we see significant capital expenditure programs going forward. Further, changes in energy legislation such as compliance for utilities to generate 20% of their electricity from clean and renewable sources and new emission standards etc, are expected to further add demand for renovation and replacement in existing power generation and distribution sectors. We also believe the company's presence in emerging markets should capitalize on growing energy demand in these countries. Recently, AZZ acquired seven galvanizing facilities from AAA, which are expected to boost the company's FY09 revenue. Considering the key drivers mentioned above, we expect the company to recover and post a strong order book going forward.»

I wasn't aware that AZZ was linked to alternative energy in any way. Since this is the case, the stock will probably trade at a premium versus its peers, and not a discount as I was expecting.

Given all this I opt to take a 10% profit or so in my short sale of AZZ.

The trading plan is:

BUY to COVER AZZ.

the 3 year chart...