CBI (Long)...

Chicago Bridge and Iron is an old favourite of mine. I made good money in this company in the time before and after their 'accounting irregularities' (whenever you see that about a company you've a long position in, sell first and ask questions later). CBI is now back to levels a bit above when I first got involved in the name a few years ago. The stock peaked over $60 in early 2008 and bottomed out at $5 in early 2009. How's that for a wild ride in the world of buy and hold? :-p

Anyway, CBI is an engineering and construction/maintenance firm, serving primarily the energy and natural resource industries. CBI pays a negligible dividend, but it is optionable. Though not my favourite options chain, it is sufficiently liquid in terms of volume and open interest with manageable strike gaps and bid/ask spreads. CBI is a candidate for call spreads. CBI reports earnings again in late February or early March.

CBI scores a 1/3 on the screens, with 100% interest from the Joel Greenblatt screen, 80% from the Kenneth Fisher screen, 74% from the Peter Lynch screen, 71% from the Momentum screen, and 69% from the Martin Zweig screen.

Technically, CBI just broke out above multi-month resistance at $21. Volume was solid on the breakout and volume has been increasing as it powers higher. However, Friday CBI put in a weak-looking doji bar with heavy volume. This makes me think the pullback will happen sooner rather than later, so I'm keeping an eye on this one and hoping it falls a few percent to allow me to put a position on.

For options, I'm liking the April $17.50 calls as my buy leg, but I would also consider the April $20 calls. Depending on what happens early this week, I may pick some calls up here and sell some January $22.50 calls to make a quick few bucks.



Position: none

Disclaimer: This is not a recommendation and is presented for informational purposes only.