"Among contrarians, one advisors stands out among all others: David Dreman," notes John Reese, editor of the Validea newsletter.

His advisory service selects stocks based on the strategies of time-tested investors, he reviews Dreman's approach and offers one stock that matches the contrarian's investment profile -- specialty metals firm, Allegheny Technologies (NYSE: ATI).

"Dreman, perhaps more than any other guru I follow, is a student of investor psychology. And at the core of his research is the belief that investors tend to overvalue the 'best' stocks -- those 'hot' stocks everyone seems to be buying -- and undervalue the 'worst' stocks -- those that people are avoiding like the plague.

"In addition, he also believed that the market was driven largely by how investors reacted to 'surprises', frequent events that include earnings reports that exceed or fall short of expectations, government actions, or news about new products.

"And, he believed that analysts were more often than not wrong about their earnings forecasts, which leads to a lot of these surprises. By taking a contrarian approach -- i.e. targeting out-of-favor stocks and avoiding in-favor stocks -- Dreman found you could make a killing.

"To find out-of-favor potential turnarounds, he compared a stock's price to four fundamentals: earnings, cash flow, book value, and dividend yield. Because Dreman took advantage of the overreactions of others, he found that one of the best times to invest was during a crisis.

"Allegheny Technologies is a diversified specialty metals producer; its metals are selected for use in environments that demand metals having hardness, toughness, strength, resistance to heat, corrosion or abrasion, or a combination of these characteristics.

Allegheny Technologies (NYSE: ATI) produces specialty metals. Products include titanium and titanium alloys, nickel-based alloys and superalloys, stainless and specialty steels, tungsten materials, zirconium, hafnium and niobium. The steels, the nickel alloys and the titanium alloys are offered as plate, sheet, engineered strip, precision rolled strip, and grain-oriented electrical products. The company also offers forgings and castings. Its biggest customers are in the aerospace, chemical process, and oil and gas industries.

Investors were pleased earlier in the week, when Allegheny issued upside EPS guidance for Q2. Management said it expected $1.65-$1.67, up from its earlier view that earnings would be somewhat higher than the $1.40 per share of Q1. The Street had been looking for $1.53. The CEO noted that the firm's risk management programs were reducing the impact of volatile input costs.

Allegheny Technologies Inc. (NYSE: ATI) shares are trading higher today as investors pounce on speculation that ATI may be a takeover target. One possible company mentioned as a suitor for ATI is US Steel (NYSE: X). If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on ATI.

After hitting a one-year high of $119.7 last April, the stock hit a one-year low of $59.00 in January. ATI opened this morning at $79.00. So far today the stock has hit a low of $79.00 and a high of $84.22. As of 1:15, ATI is trading at $83.39, up $3.39 (4.3%). The chart for ATI looks bullish and steady, while S&P gives the stock a neutral 3 Stars (out of 5) Hold rating.

MOST NOTEWORTHY: China Petroleum & Chemical, Syniverse and Allegheny Tech were today's noteworthy upgrades:

• Deutsche Bank upgraded China Petroleum & Chemical Corporation (NYSE: SNP) to Buy from Hold on valuation following the recent sell-off.
• ThinkEquity upgraded Syniverse Holdings Inc (NYSE: SVR) to Buy from Accumulate citing growth from further price reductions and adoption of new technologies that will drive transaction volumes.
• Allegheny Technologies Incorporated (NYSE: ATI) was raised to Buy from Neutral at Goldman.The firm upgraded Allegheny based on valuation, low stainless steel inventories, and nickel price stabilization.

OTHER UPGRADES:

• Napster Inc (NASDAQ: NAPS) was upgraded to Outperform from Peer Perform at Bear Stearns.
• Goldman raised Raytheon Company (NYSE: RTN) to Neutral from Sell.
• Johnson Controls Inc (NYSE: JCI) was upgrade to Buy from Add at Calyon.

Allegheny Technologies Inc. (NYSE: ATI) is plunging today after the company cut its 2007 forecast this morning, citing weak demand for stainless sheet steel. This is one example of an industrial goods manufacturer getting caught as the credit crunch potentially slows down economic expansion. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on ATI.

After hitting a one-year high of $119.70 in April, the stock has been volatile over the past few months. This morning, ATI opened at $97.00. So far today the stock has hit a low of $92.80 and a high of $97.54. As of 10:55, ATI is trading at $95.50, down $11.15 (-10.5%). The chart for ATI was bullish and steady before today's dive, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bearish hedged play on this stock, I would consider a November bear-call credit spread above the $115 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 7.5% return in 5 weeks as long as ATI is below $115 at November expiration. Allegheny Tech. would have to rise by more than 20% before we would start to lose money.

ATI has not been above $115 by more than a few cents at a time since April and has shown some resistance around $112 recently. This trade could be risky if the industrial goods market turns around, but even if that happens, this position could be protected by the resistance the stock formed around $115 over the past few months, plus the big drop it suffered this morning.

Brent Archer is an options analyst and writer at Investors Observer.

"At first glance, the upcoming Airbus A380 and the Boeing 787 Dreamliner planes look much like existing commercial models – but nothing could be further from the truth," says energy and resource industry expert Elliott Gue.

In Personal Finance, the editor notes, "Both are 20% to 30% more fuel efficient than any planes currently flying, due largely to lightweight composite materials."

Composites, he notes, are formed from two dissimilar materials -- usually a reinforcing fiber and an adhesive epoxy or resin, with carbon-fiber composite being the most commonly used in aircraft construction.

And it's not just airplanes that use these advanced materials; Gue observes, "Wind-power blades, oil rigs and sporting equipment all use high-strength, space-age materials. That spells soaring demand and solid growth for a handful of companies involved in their manufacture."

For those looking to invest in the "composite" industry, the advisor offers a trio of ideas. First is Hexcel (NYSE: HXL), the world's largest producer of "prepregs" for the aerospace industry. Prepregs, he explains, are woven carbon-fiber sheets that when chilled remain flexible and can be bent to shape or pressed into molds.

Gue says, "Outside aerospace, the wind power industry is fast becoming Hexcel's most important source of revenues. In fact, wind power is the company's fastest-growing major source of revenue; Hexcel projects at least mid-teens growth from that line this year.

Stock futures are mixed in early morning trade, pointing to a similar start for the S&P 500 and a lower start for the Nasdaq.

A few economic reports are due out today that could affect trading while homebuilder Toll Brothers Inc. (NYSE:TOL) said when reporting financial results this morning that it appears the housing slump has bottomed out.

Economic data will begin pouring when at 8:30 a.m. Eastern, third-quarter productivity and unit labor costs will be revised up to 0.5% gain from a flat initial reading. At 10:00 a.m., October factory orders will be reported with an expected 4% decline. The November Institute of Supply Management survey is also due at that time and is expected to decline to 55.5% from 57.1%.

The Standard & Poor's 500 index reached a new 52-week high yesterday with Bank of New York (NYSE:BK) stock surging 12% to close at $39.75 and Allegheny Technologies Inc. (NYSE: ATI) stocks gaining nearly 7% percent, to finish at $93.92. LSI Logic Corp. (NYSE:LSI) shares on the other hand, fell nearly 14%, to close at $9.12.

Today also, New York City is set to vote on the blanket ban on trans fat use in all restaurants, eateries and bakeries.

Companies making the headlines today:

Luxury home builder Toll Brothers Inc. (NYSE:TOL) reported its fourth-quarter financial results. Profit was lower, down by 44%. Earnings fell to $173.8 million, or $1.07 per share, beating analyst forecast by a penny.

Ford Motor Co. (NYSE:F) will offer about $3 billion 30-year unsecured senior convertible notes. Ford will also sell its climate control business to Valeo SA, a French automotive supply company, contingent on agreements with the UAW. Ford shares are down more than 1.5% in pre-market.

Sirius Satellite Radio Inc. (NASDAQ:SIRI) lowered its year-end 2006 subscriber forecast late last night, due to lower sales since Thanksgiving than the company had anticipated. SIRI stocks are down nearly 6.5% in pre-market.

Reckson Associates Realty Corp. (NYSE:RA) turned down a $4.3 billion takeover proposal from the investor Carl Icahn, preferring a similar takeover proposal from S.L. Green Realty (NYSE:SLG).