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Strategies & Market Trends : Ask DrBob -- Ignore unavailable to you. Want to Upgrade?

To: iowamann, Spam Queen who wrote (3085)	9/2/2000 4:00:18 PM
From: Louis V. Lambrecht	Read Replies (1) \| Respond to of 100058

CPN - Appeared on the Jubak's radar list moneycentral.msn.com Took my decision on Aug 23 on a heads-up from optioninvestor.com Calpine - CPN Could you recommend some good call plays on Calpine (CPN) and Dynergy (DYN). These utility stocks have been on a steady rise of late. - Jim In retrospect, I should have included the Utilities sector in my list of leading sectors above. CPN is an independent power producer that sells electricity across the country. Now, CPN is not your father's utility stock. CPN is a 'New Economy' utility company with a 40% earnings growth rate. The company has a history of increasing earnings, and has thrown in several upside surprises. In its last quarter, CPN surprised Wall Street with a profit report 58% above estimates. The company is benefiting from the deregulation of the power industry and the need to rebuild the country's energy infrastructure. Also, electricity is in high demand. All of those little gadgets we've come to love (like the computer I'm using now) need a lot of power to turn the wheels. CPN has a stronghold on two of the largest and fastest growing markets, California and Texas. Deregulation has allowed CPN to build more power plants in those key markets in an attempt to fulfill the current surge in demand for electricity. Merrill Lynch recently called CPN the single best way to play the deregulation and build-out of the power industry. I tend to agree with Merrill's views, especially with the kind of fundamentals CPN has. The company has been on an acquisition binge lately to help spread its reach in the power industry. In less than a month, CPN has acquired Quintana Minerals, a Canadian natural gas company, a power plant in San Jose, California along with 205 bln cubic feet of natural gas reserves, and two natural gas-fired power plants in the Northeastern United States. CPN's fundamentals are in place, and despite the stock's recent run, it still sells at a relatively cheap price. And, the chart is just beautiful. To me, it looks like CPN has caught the attention of the momentum investors. As always Jim, I cannot give specific call recommendations, but I can tell you where you might look for entry points. After breaking from its most recent consolidation in late July, it looks like a good strategy has been to buy the dips. The stock is using its 5-dma for support, which might provide an entry into the stock upon a dip down to that level. Since CPN is at a new 52-week high, there's no resistance above, just clear blue sky. The stock generally advances in a stable fashion during intra-day climbs, making entry into CPN in the morning possibly profitable if the Utility sector continues its climb into record territory. One last thing, CPN is a candidate to be added to the S&P 500! optioninvestor.com