Editor's Note: I wanted to update readers on Microsoft (MSFT), Hess (HES), and Joy Global (JOYG). Microsoft is on our watch list and we had a breakout trigger to buy LEAPS on a move over $21.60. That happened early this morning. Hess Corp. just got crushed today with an 11% sell-off as shares plunged toward technical support. Joy Global is due to report earnings tomorrow and shares could see some volatility. Check out the updates below for more details.
Triggered Play Detail:
MSFT $21.40 +0.00 -- Microsoft Corp.Shares of MSFT closed unchanged on the session but shares rallied toward $22.00 early this morning. The move could have been fueled by news that MSFT will have its new Windows 7 operating system available in late October in time for the 2009 holiday shopping season. We had a buy-the-breakout trigger at $21.60. Short-term the move looks like a failed rally at $22.00 so readers may be to wait and consider buying LEAPS on a dip into the $20.75-20.00 zone. Our stop loss is at $18.40. My long-term target is the $30 region.
June 2nd, 2009 - entry price on MSFT @ 21.60, option @ 2.20
Chart of MSFT:
Play Update Detail:
HES $60.30 -7.74 -- HESS Corp.That 10% gain in shares of HES last week? It's gone. The stock plunged 11.3% on Tuesday with no news! Even more disturbing was the volume. Normal volume is 4.5 million shares. Today's volume was 25.6 million shares. That's a very bearish technical indicator. Why would there be so much volume with no news? There was a story on Bloomberg today that suggested HES might be on the losing end when it comes to access to the pre-salt, offshore oil fields in Brazil. According to Bloomberg, even if the state-owned Petrobras oil company can't win some of the blocks of land to drill for oil in the normal open-bidding process they might give it to Petrobras anyway. There was another story elsewhere on the Internet that suggested HES has already drilled a couple of test wells in this pre-salt field and the results were not very promising. At this time we just don't know what the catalyst is for this decline but if you look at the volume today somebody knows something or at least they think they know something. More conservative traders may want to consider raising their stop loss toward the simple 100-dma near $57.45 or consider an early exit altogether since the action today combined with Monday's failure at $70.00 has produced a bearish-reversal pattern. I am not suggesting new bullish positions in HES at this time. We're keeping our stop loss at $49.00. Our exit target is $79.00.
April 1st, 2009 - entry price on HES @ 52.50, option @ 7.30
Chart of HES:
Watch List Candidate Detail:
JOYG $35.60 -1.12 -- Joy Global Inc.The commodity rally, fueled by a plunging dollar, has helped lift JOYG to huge gains in recent weeks. We've been waiting for a correction, which might happen tomorrow. JOYG is due to report earnings tomorrow morning before the bell. Analysts are expecting a profit of 89 cents a share. After such a massive run up in the stock price JOYG could see a sell-the-new reaction. I am raising our entry point to buy LEAPS to $27.50. More aggressive traders might want to consider an entry near $30.00. We're also adjusting our stop loss to $23.75 just under the 100-dma. If triggered our long-term target is $45.00-50.00 zone. (Note: the new options below) Buy-the-Dip trigger: $27.50-25.00 zone
BUY the 2010 January $35.00 call (symbol: JQY-AG)
Chart of JOYG:
 |
