Lear Corp. designs and manufactures interior systemsand components for automobiles and light trucks. Lear has in-house capabilities in seat systems, floor and acoustic systems, door panels, headliners, and instrument panels. For the FY ended 12/31/00, revenues rose 13% to $14.07B. Net income increased 7% to $274.7M. Revenues reflect new programs and increased production. Earnings were partially offset byincreased interest expenses.

April 24, 2001

Stocks sensitive to interest rates should benefit in this lower interest rate environment, which is one reason we’ve added LEA to the Current Play list. Another reason is that LEA made a strong break above formerly tough resistance at the $35.00 level on 951,300 shares traded, which was more than twice the three-month daily average of 443,000. Credit Lyonnis and Prudential Securities can take much of the credit for trader interest in LEA, as both firms upgraded the stock today. More importantly to us, though, the stock looks very good technically. LEA has been riding a 45-degree uptrend line since early April, moving from $28 a share to today’s close of $36.20. What’s more, LEA is showing no inclination to backpedal. To that end, the stock should gain support from former resistance at $35.00, with additional support being provided by the 10-dma at $33.74. As for resistance, it looks like clear sailing until the April 1999 highs of $50 (though it could hit mild resistance at the psychologically-significant $40 level). Traders considering a position in LEA should look for strong volume, 250,000 shares or more traded by noon EST, on a move through Tuesday’s intra-day high of $37.80 or a bounce off support at $35.00 before placing their trades.

Picked on April 24th @ $36.20
Change since picked 0.00
Stop Loss @ $33.88

April 26, 2001

In Tuesday’s write up, we raved how Lear was upgraded by Prudential and Credit Lyonnis. Unfortunately, today LEA was downgraded by Lehman Brothers. Not that the downgrade had much impact on trading, as LEA managed to add another $0.09 to its value. What’s more, this automotive supplier should continue to be the beneficiary of a lower interest rate environment since its primary customers are the big automakers. More importantly to us, though, the LEA remains healthy technically. The stock has been riding a 45-degree uptrend line since early April, moving from $28 a share to today’s close of $35.92. What’s more, LEA is showing no inclination to backpedal. To that end, the stock has gained support from former resistance at $35.00, with additional support provided by last week’s consolidation level at $34.00. As for resistance, LEA has clear sailing until the April 1999 highs of $50 (though it could hit mild resistance at the psychologically-significant $40 level). Traders considering a position in LEA should look for strong volume, 250,000 shares or more traded by noon EDT, on a move through today’s intra-day high of $36.30 or a bounce off support at $35.00 before placing their trades.

Picked on April 24th @ $36.20
Change since picked -0.28
Stop Loss @ $33.88