Technically this stock broke through the 50 day moving average yesterday ($31.50) but closed below the 200 day moving average ($32.55). Today it opened above the 200 day average as well; this is a bit early to buy as you'd want to see some more confirmation of this sort of a breakout but I am antsy to up my stake in this specific group with multiple stocks exhibiting a total turnaround in their technical picture in the past 48 hours.
I have a longer analysis of the group here from a fundamental perspective (of course the technical picture changed this week with their large jumps in stock price), so I won't rehash it. Again let me reiterate nothing really changed in the fundamentals from 1 or 2 weeks ago to now. So why not buy lower when the stock was cheaper? Well cheap stocks can remain so for a long time, with little movement - thus tying up money with low returns. So I try to buy these stocks when they exhibit some strength. The drawback to this is you need to pay a higher price in the near term.
The CEO continues to buy shares (as he does quite a bit), and yesterday a nice contract announcement to boot, a $700 million 10 year contract with United Technologies (UTC). If you straightline that contract over the life ($70 million a year) that represents a 5% bump up from current revenue levels. More importantly these long term contracts provide stability to the revenue stream.
For the fund, I bought 600 shares as an initial stake or about $20K, a 1.9% stake in the fund. Titanium Metals has been range bound in calendar year 2007, pinging back and forth between $28 and $39 - great for trading; not so great for buying and holding. If this indeed is "the move" it is quite a long base to build off of, and upside to upper $30s should be in store. I will watch to see how the stock reacts in the next few days and plan to add, unless it suffers a severe break down back below its support levels. I also added a bit in Allegheny Technologies (ATI).
Long Titanium Metals and Allegheny Technologies in fund; no personal positions
