Welcome to the 2^nd ever trading report from your’s truly!  After last week’s big 34% gain, let’s see if we can keep the momentum flowing. 

I thought I would change things up a bit, as this is essentially a work in progress for me until I find exactly what format works the best for me, and you as well.  So instead of making short calls, I thought we would stick with the more traditional buy low and sell high theme.  This allows the everyday investor to participate, and does not require a margin account to make short sells.   

Remember, the name of the game here is a quick 1 day profit by making an entry position the day of the earnings release, and selling the preceding day.  Alternatively, if earnings are released before the opening bell, an entry position could be created at the prior day's close and sold during the regular market hours.  Having an account that allows after trading is also a valuable tool. 

This method of trading poses a moderate to high risk level, so trade along with me only if you can afford to tolerate the risk.  I would advise you trade no more than 20% of your portfolio’s net worth using this strategy.  

Arch Coal, Inc. (NYSE: ACI)

ACI is a bit of a mystery to me on occasion.  Primarily because the analysts who cover the stock can't seem to agree on the global demand for coal, and what that will do to coal's price.  I prefer this description:  coal supplies ~ 50% of the world's electricity needs, and we'll need it for the foreseeable future.  Overly simplistic I know, but this isn't brain surgery, and with demand constantly decreasing, I'm willing to ignore the white noise.  

Therefore, I’m giving ACI the benefit of the doubt that they will beat earnings and possibly guide higher since pricing power is likely in their favor.  The ace up their sleeve is that ACI’s coal deposits are mainly low-sulfer coal, and even China will want their coal plants to smell a little less foul thanks to the upcoming Olympic Games.  

ACI reports earnings 21Apr08 before the opening bell.  Early bird gets the worm!

 

Axsys Technology, Inc. (NASDAQ: AXYS)

Probably one of the best defense companies out there and has quietly slipped under 90% of the Wall Street’s radar – and I know, b/c I’m an CNBC addict.  The folks at TheStreet.com brought it to my radar, so I must give them credit for alerting me.

AXYS makes equipment for the defense, space, and many other commercial industries, so it’s well diversified over the entire economy.  It also beat earnings 3 out of 4 times in 2007, and that kind of leadership usually repeats itself.  Not to mention, the defense sector still has some positive momentum behind it. 

If AXYS beats earnings, I will likely keep my position and hold it as a long term buy. 

AXYS reports earnings on 23Apr08 after the close. 

Potash Corp of Saskatchewan (NYSE: POT)

If you follow any financial news service, chances are you have ran across multiple Potash Corp articles.  Therefore, I won’t bore you with the usual praise, but I will direct you to a recent article I wrote covering the near insatiable demand for fertilizer in which POT is literally sitting on top of the world. 

Whether the demand for fertilizer is inflated or real, the stock price keeps climbing and climbing.  Some feel this rise is due in part to the popularity of agriculture ETFs and every Mom and Pop investor is buying them for their IRAs, but as a trader, that’s not my immediate concern. 

POT has also seen another large run up last week, so buy this one with extreme caution and keep those stop loss orders set tight. 

POT reports earnings on 24Apr08 before the opening bell. 

Occidental Petroleum Corp. (NYSE: OXY)

One would be hard pressed to find a more diversified hydrocarbon company than OXY.  It explores for oil and natural gas, and subsequently develops their findings according to their own interests.  Not to mention, it has a very diverse chemical production business from basic, everyday chemicals to specialty substances for industrial applications. 

Analysts seem to be going nuts over this stock because several have revised their targets in the last month.  So many, that it is difficult for me to even quantify them all.  Enough said – right? 

OXY reports earnings on 24Apr08 before the opening bell.

Disclosure:  Author has long positions in POT and OXY.  Other trades may be entered after publishing as earnings data is released.