Three Lively Setups

Cummins (CMI) is putting on a strong move here today, breaking out from resistance. Although I have drawn an uptrending support line on the chart, this isn't really an ascending triangle because of all the space between the trendline and price in February and early March. The line does pick up in mid-March, and that gives me the stop area of $144. I like a risk-reversal type of approach here, going long the April 150-155 call spread and short the April 145-140 put spread for a cost of around $1.10.

CMI View Chart » View in New Window »

Vitamin Shoppe (VSI) is another play on the whole "get healthy America" theme, which is also there in spirit but not always in action. This "not always in action" creates the big swings in sales and in the stock price. Right now, the chart seems to be saying that things are going to be better, and Vitamin Shoppe looks ready to make a move into the $50-$53 range. I would expect some resistance above $49, but taking a position here with either a very tight stop below today's low or even at $45.60 provides for an attractive risk/reward, given the strong momentum and breakout on the relative strength index (RSI). Now is the time to insert some cute pun about vitamins strengthening the trading portfolio. Forget it. I'm just popping a few shares on the long side here....138 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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