AES - AES Corp. $85.94 (+3.13)

The AES Corporation and its subsidiaries are a global power company. AES operates and owns several electric power plants with a total capacity of 36,675 megawatts (MW). AES also is currently in the process of adding approximately 6,646 MW to its operating portfolio through its construction of new plants. They sell electricity to electric utilities, regional electric companies or wholesale commodity markets known as power pools. AES also sells electricity directly to end users through its distribution business. In the news, the AES Corporation announced that it had further amended its offer to purchase shares of C.A. La Electricidad de Caracas (ELDAY), at US $0.57 per share on Friday. They also filed to sell up to $4 billion in debt securities, common and preferred stock, warrants, depositary shares and stock purchase contracts and units. The stock moved higher on the news, trading as high as $86.81 before pulling back to close at $85.94 on average volume. Regarding their upcoming split, the Board of Directors announced a 2:1 stock split on 4/18 to be paid in the form of a stock dividend on 6/1. The stock has been trending up and we feel that the trend will continue as we are now only 3 sessions away from the payable date and utilities have been hot lately. Going forward, the stock has support at $85 with stronger support at the 10-dma, currently at $83. Resistance is just above Friday's intra-day high at $87 and then $90. Look for a bounce off of $85 or a move above $87 on midday volume of at least 500,000 shares to open new positions. Confirm market momentum and sector direction before initiating new plays. We recommend using trailing stops with a quick exit by 5/31.

Picked on May 28th @ $85.94 Change since picked +0.00

CPN - Calpine Corporation $101.00 (-5.63)

"Indecision mars all success; there can be no good wind for the sailor who knows not to what port he is bound". I doubt Oliver Wendell Homes was thinking of the individual investor when he made that statement, but it sure is true. When the general markets topped out in March, were you looking for other sectors or indexes turning up? If you were, you may have run across Calpine Corporation. Calpine Corporation is an independent power company that is engaged in the development, acquisition, ownership and operation of power generation facilities and the sale of electricity predominantly in the United States. CPN is focused on two key technologies: combined-cycle natural gas-fired and geothermal power. Gas-fired power plants represent the fastest growing segment of the U.S. power industry. Geothermal energy is an important niche market for Calpine. It is found in areas of the world where heat sources are close to the surface. CPN has received the attention of some major brokerage houses as of late. On Friday, Morgan Stanley Dean Witter upgraded CPN to a Strong Buy. Earlier in the month ABN AMRO and CIBC World Markets both upgraded the stock. On June 9th the company will split its stock for the second time since going public in 1996. The most recent was in October of 99. In April, CPN, which has a Relative Strength ranking of 99 out of 100, beat earnings estimates by .02 cents. The current bear market is forcing investor to seek refuge in the safety of areas such as utilities. Where better than to park your cash with a company like CPN, a standout leader in this sector? On Friday, the stock traded 4% higher on less than half-normal volume of 378K shares. Thursday the stock bounced off the 50-dma and formed a perfect Doji, (a Japanese candlestick symbol indicating indecision). Friday the indecision was made clear and the stock gapped open by 2 bucks. Support is now established at the 50-dma at $95. Resistance testing will begin at the 20-dma at $102.50, $104 and the $110. Open new positions on big volume and good positive momentum. Consider run-ups to resistance levels on low volume suspect, and be quick to take any profits that may exist. Use a hard bounce off support also as an entry point. I know this is redundant, but confirm the overall sector and market movement before engaging into battle.

Picked on May 28th @ 101.00 Change since picked 0.00

KEM - KEMET Corp. $60.50 (-15.50)

Perhaps an upcoming split will pump a little juice into this capacitor manufacturer and separate it from last week's collapse. The 2:1 split was announced on May 15th and it will be payable June 1st. Last week's collapse was most curious because the Company sports some pretty good fundamentals including last quarter's earnings that beat the Street's estimates by a whopping $0.11. At least one analyst, from Needham & Co, used the drop as an opportunity to reiterate his Strong Buy recommendation. By all accounts demand for this Company's products remains very strong and should continue for many quarters to come. The technical picture is a bit cloudier. Wednesday's collapse was devastating and on extremely high volume. The spike down went to the April lows and it appears that the drop may have been a final capitulation that took out a ton of stops because the stock immediately bounced and has staged two days of consolidating. The MACD is still very negative but the RSI is indicating an oversold condition that could enable the stock to bounce a little more, especially with a split coming up. OBV took a hit, but it was previously strong. A move above Friday's high at $60.88 could indicate at least a run to the next resistance point at $67. Unfortunately, any real support is all the way back at the spike low, so do not stick around if the stock starts dropping again. We will exit this position before Thursday's split.

Picked on 28th @ $60.50 Change since picked 0.00