Stock to Sell #1 – Alliant Techsystems (ATK)
Alliant Techsystems (NYSE:ATK) is the Pentagon’s largest ammunition supplier and also the world’s largest maker of solid-fuel rocket engines. Government spending cuts, especially in the defense sector and NASA, should negatively impact the company’s earnings. Earnings in FY 2012 (ended in March) fell to $7.93 versus $9.32 in FY 2011, and analysts look for a decline to $6.44 in FY 2013.
The stock is in a clearly defined bear market with a bearish resistance line at $55 and near-term resistance at the top of a bear channel at $50. Investors should sell ATK at the market and redeploy assets elsewhere.
Short-sellers should sell ATK short with a price objective of $48. Short-selling is a speculative, high-risk technique. Check with your broker for special margin requirements and use a stop-loss order to protect against potentially unlimited losses.