SMG liquidation

Took advantage of the early morning rally to liquidate another of my technical plays. Scotts Miracle-Gro took a hit recently when it was revealed that one of its employees failed to file required documents with the EPA, and as a result the company had to mount an expensive recall of one of its fertilizers. At that point, I began to pay attention to the stock, since the problem is likely to be a one-time event. The stock took off after the CEO projected 2008 EPS of $2 despite the recall problems, and I got in a little late in the rally at around $22.50. There is a resistance line around $28, and while there is a decent chance that the stock could break through that resistance and reach $30, I decided to liquidate now at $27.79 (a 23% gain), since the majority of the move I wanted has already occurred, and I anticipate that the real estate market in the US will continue to deteriorate for some time, which does not bode well for revenue growth.

Tagged as: SMG