Swing Trading Strategies & Stock Picks Since 2003

"We're going totally down-home with an under-the-radar stock pick as our latest 'undiscovered gem'," says Elizabeth Harrow in her review of Casey's General Stores (NASDAQ: CASY).

The analyst with Schaeffer's Research says, "Few company names scream 'Americana!' with the same authenticity as Casey's." Here, the contrarian-minded advisor offers her review of the "high-flying security."

"Casey's General Stores was founded in 1959, and its headquarters are located in Ankeny, Iowa.

"It operates convenience stores in the Midwest. Hungry commuters can swing by Casey's on their way to work to pick up anything from pork fritters to breakfast pizza,  plus, they can fuel up with some self-serve gasoline on the way out.

"On Wall Street, CASY maintains a relatively low profile. However, the stock is not exactly a slouch in terms of technical performance. During the past 40 trading days, the shares have outperformed the broader S&P 500 Index by 31 percentage points.

"Despite the stock's impressive surge, many investors and analysts are still ignoring the bullish prospects for this retailer.

"For starters, Zacks reports that only 4 analysts currently follow the stock. They're evenly split, with 1 'strong buy,' 2 'holds,' and 1 'strong sell.' In light of CASY's recent technical performance, we could very well see some upgrades from these skeptics.

"Meanwhile, open interest on the stock is light. There are just over 1,000 put and call positions open among options slated to expire within 3 months. If more option players discover the stock, the burst in speculative interest could help push the shares higher.

"There's also room for pessimism to unwind among the few option traders who have placed their bets on CASY. The stock's Schaeffer's put/call open interest ratio suggests a slightly bearish bias among speculative traders.

"Many short sellers have already been forced to buy back their bearish bets, thanks to the stock's recent surge.

"Short interest fell by 14% during the most reporting period, but it still represents 8% of the stock's float (or 7.1 times its average daily volume). A continued unraveling of this pent-up pessimism should support continued gains in the stock.

"Overall, CASY seems poised to continue its trek higher during the near term. The shares are currently flirting with potential double-top resistance, but technical and sentiment indicators both suggest that CASY just might have the muscle to surmount this looming obstacle."