3SOF

TIE like many stocks last week rallied back to resistance at $36 but got stalled out there, putting in a doji candle on Friday.  Again, it looks like this move has run out of steam with significant resistance at $36.  If the market heads lower next week, it will most likely take TIE with it.  The chart also looks like TIE could be putting in the right shoulder of a H&S top.  The 30 minute chart below shows the H&S pattern more clearly.

I think TIE at this level makes a nice short setup.  With a stop just above $36, the risk as of Friday's close is just 1.3%, while the reward potential of a breakdown here should be at least 10% on a move back to $32 resistance, if not more if the H&S pattern follows through.

Another thing to note with TIE is that VHI is set to distribute 56 million shares of TIE stock on March 30th in a special dividend, which is 1/3 of the current total outstanding shares.  Once this distribution is completed, it could well add more selling pressure to the stock as VHI holders lock in gains from this special dividend.  This is also going to add significantly more liquidity to the stock, as shares that have been effectively locked up become openly tradable in the market.

http://biz.yahoo.com/prnews/070228/nyw164.html?.v=69

TIE has been absolutely ripping the last few dys after reporting streong earnings this week and on takeover speculation by ATI:

QuoteRidgeland, MS, MAY 11, 2007 (EventX/Knobias.com via COMTEX) -- The DJ Steel index is up 1.1%, but investors are really taking a shine to titanium. Titanium Metals (TIE +7.7%) is soaring for the second session in three on renewed speculation that the company is a takeover target. On Wednesday, Knobias reported on street talk that suggested Allegheny Technologies (ATI +2.4%) would pay $58/share or more for TIE. TIE's chairman, Harold C. Simmons, is one of the biggest insider stock buyers on Wall Street. He owns 51.8% (direct and indirect) TIE shares. Harold Simmons is 75 years old.On Monday, TIE reported a Q1 EPS of 41c vs. 32c, 3c above expectations. Other titanium metal products names include RTI International (RTI +2.4%) and Carpenter Technology (CRS +2.6%).

$58/sh would be a very nice premium on the current share price, and I think we could see TIE break $40 resistance early next week.  The stock is clearly super bullish, with two huge volume up days.  I am most certianly along for the ride...

Technically, the 1 year chart shows the nice rising channel that TIE has been riding since pulling back from the huge run in 2006.  The top of the channel currently stands at $42, so we may see some resistance there, but if speculation really mounts, TIE could also just rip through there.  The short term chart shows the symmetrical riangle and breakout on volume, with a nice retest of the breakout on Thursday, and strong continuation Friday.  All things point north here....

chart update