SPAR (Long)...

Spartan Motors specializes in custom engineering and manufacturing for heavy-duty vehicles. It is split into two segments. Spartan Chassis designs and manufactures custom heavy-duty chassis and the Emergency Vehicle Team designs and manufactures emergency vehicles. This is a classic early cyclical play. SPAR pays a dividend of ~4%. It is optionable, but the options chain is awful, with low volume, low open interest, wide strikes, and wide bid/ask spreads. It's not even a buy-write candidate. SPAR doesn't report earnings again until mid February.

SPAR has a screen score of 0/3. It scored 90% on the Kenneth Fisher screen, 86% on the Benjamin Graham screen, 75% on the James O'Shaughnessey screen, and 74% on the Peter Lynch screen.

This is what a technically-extended stock looks like. SPAR broke out decisively above its 200-day EMA this week, following a base that's been forming since August. Presently, the 200-day EMA lines up around $6, which is around the top of that base, so I expect old resistance to become current support on a pullback. I'm loathe to chase a stock that was up 25% last week, so I'm going to watch this one and hope for a pullback. A 10% pullback from current levels would not surprise me. If it breaks above $7, which I doubt will be the case before a pullback, I might chase it with a small position with a tight stop. In that case, I would probably use the 5-day EMA (green line) as a stop loss.



Position: none

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