BAC, BQI, and RGLD
ACI $24.80 -0.51 -- Arch Coal Inc.
Last week was kind of rough for the coal stocks. After weeks of positive analyst comments one analyst has now turned bearish on the sector. The news that China is trying to slow down its economy from red-hot to just hot isn't good for any of the commodity players, including coal. However, ACI wasn't doing that bad until Thursday. That's when shares broke down from their sideways consolidation. I warned readers that a correction toward $24 was a good bet. Let's just hope $24 holds. If not the $22 level should offer stronger support and if that fails the 200-dma is quickly approaching the $20.00 level.
We do need to be aware that ACI is about to report earnings on January 29th. Wall Street's estimates are for a profit of 17 cents a share. It's up to you if you want to buy any protective puts ahead of the report. Of course by then ACI could be trading at $20 if the market's current pace doesn't slow down.
Last week I suggested that more conservative traders consider raising their stops toward $22.00. That's not a bad idea. Our exit strategy hasn't changed. We want to sell the final half of this trade at $34.75.
May 14th, 2009 - entry price on ACI @ 16.00, option @ 2.40
symbol: OSE-AF, 2011 JAN $30 LEAP call - current bid/ask $2.35/2.50
-stop loss on ACI @ 19.40
Chart of ACI:
ANR $44.14 -0.97 - Alpha Natural Resources, Inc.
ANR suffered from the same factors pushing ACI lower. The correction accelerated in the last two days of trading. The 50-dma might offer some support but I would look for a dip toward $42.00. If that doesn't hold we'll be stopped out at $41.45. More aggressive traders could put their stops under the $40.00 level. Our second and final target is $57.25. I am not suggesting new bullish positions at this time.
Aug. 25th, 2009 - entry price on ANR @ 34.00, option @ 7.00
symbol: VJV-AH, 2011 JAN $40 LEAP call - current bid/ask $10.20/12.20
-stop loss on ANR @ 41.45
bought 1/2 LEAP position on 08/25/09 (option price @ 7.00)
01/06/10 ANR hits 1st target at $49.80. Option @ $15.20 (+117.1%)
Chart of ANR:
CHK $26.62 -0.56 -- Chesapeake Energy Corp.
CHK spent most of the week churning sideways but was unable to escape the market wide decline on Friday. Thursday's session also looks like a short-term bearish reversal. I've been warning readers to expect a dip to $26.00. While that should be support with the 50-dma and 100-dma I am not convinced that CHK will actually hold that level. Look for a dip closer to $24.00 and its rising 200-dma. No new positions at this time.
Our long-term target is $40.00.
Oct 30th, 2009 - entry price on CHK @ 24.00, option @ 4.70
symbol: VEC-AE, JAN 2011 $25 LEAP call - current bid/ask $4.85/4.95
-stop loss on CHK @ 20.95
Chart of CHK:
CNX $49.16 -0.59 -- Consol Energy Inc.
CNX is another coal stock that's getting hit by the commodity weakness and China news. Shares are breaking down under round-number support near $50.00 and its 50-dma. We were expecting a dip to $50 but now that the market is melting lower CNX will probably trade lower. The 100-dma near $47.50 could offer some support but I'd look for a dip closer to $45.00, which puts us in danger of getting stopped out with our stop loss at $44.95.
More conservative traders may want to abandon ship and exit early now. I am not suggesting new positions at this time.
Currently we have a second target to take profits at $58.50. We have a third and final long-term target at $64.90.
FYI: Readers should be aware that CNX is due to report earnings on January 28th before the market opens.
Sep 1st, 2009 - entry price on CNX @ 36.50, option @ 7.80(estimate)
symbol: VTL-AH, 2011 JAN $40 LEAP call - current bid/ask $13.20/13.70
-stop loss on CNX @ 44.95
1st Target hit 09/16/09 @ 48.50, option price $15.40 (+97%)
Chart of CNX
DE $53.02 -2.43 -- Deere & Co.
DE is now off 11% from its early January highs and shares appear to be headed for $50 now that DE has broken the 50-dma. On a short-term basis the stock is oversold but I wouldn't expect a bounce until the $50 area, which should be strong support. Readers can launch new positions on a bounce near $50.00, which should be underpinned by the rising 100-dma.
Our long-term target on DE is $69.50.
Nov 18th, 2009 - entry price on DE @ 51.00, option @ 8.75(estimate)
symbol: VER-AJ, 2011 JAN $50 LEAP call - current bid/ask $ 8.45/ 8.60
-stop loss on DE @ 48.45
Chart of DE:
DSX $14.45 -0.34 - Diana Shipping Inc.
We are at risk of getting stopped out. DSX has fallen 10% in the last four days. Friday's session saw a breakdown under key technical support at its 100 and 200-dma. If there is any follow through lower odds are very high we'll be stopped out at $14.25.
News that China is trying to put the brakes on its economy is not good news for the shipping companies so it's understandable why investors are in a selling mood. I am not suggesting new positions at this time. Our long-term target is $24.00.
Jan 11th, 2010 - entry price on DSX @ 16.44, option @ 2.75(estimate)
symbol: XDJ-AW, 2011 JAN $17.50 LEAP call - current bid/ask $ 1.50/ 1.70
-stop loss on DSX @ 14.25
Chart of DSX:
EMR $42.08 -1.03 -- Emerson Electric Co.
EMR was doing just fine until Thursday. Then shares began to retreat. Now the stock has broken support at its 50-dma and its long-term trendline of higher lows. This is worrisome and could herald a much deeper correction. I would look for a dip toward $40.00, which should be decent support. We will raise our stop loss to $37.40, which is just under price support and its 200-dma.
I am not suggesting new positions at this time.
Our plan is to sell half of our position at our original target of $47.50. We'll sell the rest at $54.50.
Sept. 8th, 2009 - entry price on EMR @ 38.00, option @ $4.50
symbol: VHH-AH, 2011 JAN $40 call - current bid/ask $4.80/5.10
-stop loss on EMR @ 37.40.
Chart of EMR:
FST $26.06 -0.60 -- Forest Oil Corp.
FST is actually holding up reasonably well but the stock still looks overbought and due for a correction. I would watch for a dip toward $24 at a minimum and probably closer to the $22.50 region.
I'm not suggesting new long-term positions at this time. Our long-term target is $37.50.
Oct 15th, 2009 - entry price on FST @ 23.85, option @ 7.40
symbol: OJG-AD, 2011 $20 LEAP call - current bid/ask $8.20/8.50
-stop loss on FST @ 19.49
Chart of FST:
GHM $17.99 -0.83 -- Graham Corp.
Ouch! The last couple of days have been very painful for GHM. Thursday saw a failed rally and bearish reversal. Friday was just a continuation of the decline with a drop toward short-term support near $18.00. If the $18 level doesn't hold we can watch the $17-16 zone. Even if GHM bounces we could be in trouble with resistance in the $20.00 region. I am not suggesting new positions at this time. GHM is due to report earnings on January 29th before the market opens. Wall Street expects a profit of 7 cents a share.
Last week we sold half our position. Our final target is $24.00.
Oct 26th, 2009 - entry price on GHM @ 15.15, option @ 2.65
symbol: GHM-FC, 2010 JUNE $15 call - current bid/ask $3.30/4.80
-stop loss on GHM @ 15.75
01/18/10 sell half, GHM $19.65, option @ 4.90 bid
- or -
Oct. 26th 2009 - entry price on GHM (the stock) @ 15.15
- stop loss on GHM @ 15.75
01/18/10 sell half, GHM $19.65
Chart of GHM:
GNK $22.37 +0.08 -- Genco Shipping
GNK is a shipping stock that lost 10% in the last four days. The stock has corrected toward technical support at its rising 200-dma and its trend of higher lows. If this level breaks the bulls are in trouble.
I'm not suggesting new positions at this time. Our plan was to use small positions to keep our risk limited. Our long-term target is $39.00.
Nov 21st, 2009 - entry price on GNK @ 25.46, option @ 5.00
symbol: OKJ-AF, 2011 $30 LEAP call - current bid/ask $2.30/2.55
-stop loss on GNK @ 20.95
Chart of GNK:
HON $39.88 change: -0.85 - Honeywell Intl. Inc.
HON was holding up pretty well until Thursday. That's when the rug was pulled out from underneath the stock. Shares fell beneath what should have been support near $40.00 and its 50-dma on Friday. This is very bearish and the next level of support should be $38.00. Any lower and we'll get stopped out.
Our first target to take profits is at $49.00. Our second target is at $54.00.
I am not suggesting new bullish positions at this time. HON is due to report earnings on January 29th before the market opens. Wall Street is looking for a profit of 90-cents a share.
Dec 11th, 2009 - entry price on HON @ 41.00, option @ 3.25
symbol: VAD-AI, 2011 $45 LEAP call - current bid/ask $1.85/1.90
-stop loss on HON @ 37.75
Chart of HON:
INTC $19.91 -0.93 -- Intel Corp.
Is it surprising to see shares of INTC suffer some profit taking after its earnings report? No. Is it surprising to see INTC drop 4.4% on Friday? Yes! INTC doesn't normally move that fast and shares were plunging on Friday with a drop through the 50-dma and a precarious close at the 100-dma. We can expect a correction toward the bottom of its multi-month trading range in the $18.50-18.00 zone, which should be supported by the rising 200-dma. If INTC corrects any further we'll be stopped out.
I am not suggesting new long-term positions at this time. Our long-term target is the $24-26 zone.
FYI: Shares of Intel don't move very fast. Readers might want to consider turning this play into a calendar or diagonal spread to further maximize your gains.
June 13th, 2009 - entry price on INTC @ 16.31, option @ 1.36
symbol: VNL-AD, 2011 LEAP $20 call - current bid/ask $2.08/2.12
-stop loss on INTC @ 17.90.
Chart of INTC:
MTW $11.54 -0.65 -- Manitowoc Inc.
Shares of MTW are correcting fast. The stock gave up nearly 16% in the last four day. We were lucky that shares gapped open higher on Jan. 19th giving us an exit to sell half. MTW has gone from very short-term overbought to oversold. We can look for support near its 50-dma rising toward $11 but I suspect that MTW will actually dip toward $10.00. More conservative traders may want to raise their stops toward $10.00.
I am not suggesting new positions at this time.
Our long-term target is $17.00.
FYI: It looks like MTW is due to report earnings around Feb. 2nd but this date is unconfirmed.
Oct 30th, 2009 - entry price on MTW @ 9.10, option @ 2.61
symbol: VMT-AB, 2011 JAN $10 call - current bid/ask $3.30/3.80
-stop loss on MWT @ 8.95
01/18/10 Sell Half! MTW @ 13.70, option at $4.80 bid.
- or -
Oct. 30th 2009 - entry price on MTW (the stock) @ 9.10
- stop loss on MTW @ 8.95
01/18/10 Sell Half! MTW @ 13.70
Chart of MTW:
ORCL $24.15 -0.68 -- Oracle Corp.
We have been expecting ORCL to correct lower and fill the gap and shares are finally starting to pull back. There is still some support at $24.00. I am suggesting readers wait for a dip into the $23.00-22.00 zone. You may want to wait for a bounce first before initiating new long-term positions.
Our stop loss is at $21.75. Our long-term target is $29.75.
FYI: Shares of ORCL don't move very fast. Readers might want to consider turning this play into a calendar or diagonal spread to further maximize your gains.
Dec. 18th, 2009 - entry price on ORCL @ 24.05, option @ 2.55
symbol: VOC-AE, 2011 LEAP $25 call - current bid/ask $2.33/2.37
-stop loss on ORCL @ 21.75.
Chart of ORCL:
PEP $62.39 -0.55 -- PEPSICO Inc.
The bounce in PEP is fading. Shares are now back below their rising 100-dma. I am somewhat concerned that PEP could be building a bear-flag type of pattern. If PEP is building a bear flag then a breakdown could forecast a drop toward $55. I am concerned enough that to protect ourselves I am suggesting we buy the March $55 puts (symbol: PEP-OK), which will cost us $0.50.
I am not suggesting new long-term LEAPS positions at this time.
Our exit target is the $69.90 mark.
July 7th, 2009 - entry price on PEP @ 57.25, option @ $4.50(estimate)
symbol: VP-AL, 2011 $60.00 LEAP call - current bid/ask $4.40/4.60
-stop loss on PEP at $54.95
Temporary protective put:
Jan. 23rd, 2009 - entry price on PEP @ 60.39, option @ 0.50
symbol: PEP-OK March $55 put - current bid/ask $0.40/0.50
Chart of PEP:
RAI $53.09 -0.32 -- Reynolds American Inc.
RAI has retreated back toward the bottom of its previous trading range. Monday's bullish breakout over resistance now looks like a potential bull-trap pattern. If the market continues to sink shares of RAI might succumb this time and correct with it. I am suggesting once again that readers take profits if you have not done so already. More conservative traders may want to exit completely. Our final target is $57.50.
I'm not suggesting new positions at this time.
FYI: Earnings are due out on Feb. 4th.
July 24th, 2009 - entry price on RAI @ 42.50, option @ $4.50(estimate)
symbol: OWO-AH, 2011 JAN $40.00 LEAP call - current bid/ask $12.50/14.30
-stop loss on RAI at $49.45
Sold Half on 10/19 @ 49.50, option @ $8.90 (+97%)
Chart of RAI:
TBT $47.35 +0.09 -- UltraShort 20+ Year Treasury Bond ProShares
Short-term TBT really has not performed for us but this is a really long-term trade. Interest rates will eventually rise. I wouldn't rush into positions. You can probably wait for a dip toward $46.00 maybe lower.
Our time frame is 12 to 24 months. Be sure to give yourself a wide stop loss.
Hmm... it's interesting to see the spreads on this options suddenly widen!
Our first long-term target is $59.75. Our second target is $67.50.
FYI: The TBT is an exchange traded fund (ETF) that tries to deliver twice the inverse performance of the Barclays Capital 20+ Year U.S. Treasury index.
Jan. 09th, 2010 - entry price on TBT @ 50.63, option @ 4.90
symbol: XRJ-AC, JAN 2011 $55 LEAP call - current bid/ask $3.20/4.55
-stop loss on TBT @ 41.90
Jan. 09th, 2010 - entry price on TBT @ 50.63, option @ 7.90
symbol: YHT-AH, JAN 2012 $60 LEAP call - current bid/ask $6.15/8.10
-stop loss on TBT @ 41.90
Chart of TBT
TEX $21.46 -0.61 -- Terex Corp.
I cautioned readers to look for a dip near $21.00. That may not be enough. With the market in retreat TEX will probably trade toward $20 and possibly lower. I'm not suggesting new positions at this time.
Our final target is $29.50.
Sept. 11th, 2009 - entry price on TEX @ 18.25, option @ 4.10
symbol: VXQ-AD, JAN 2011 $20 LEAP call - current bid/ask $4.80/5.00
-stop loss on TEX @ 17.75
Sell half (10/24/09), option at $7.50 (+82.9%)
Chart of TEX:
TLT $92.00 -0.16 -- iShares 20+Yr Bond ETF
Just like our TBT trade the TLT isn't quite moving our direction. Yet in our original play description I warned readers that you might want to wait for a failed rally near $92.00. Well now the TLT is testing $92 and its 50-dma. If this ETF continues to move higher the next level of resistance is the 100-dma and 200-dma nearing the $94 level.
You have plenty of time to open positions. This ETF doesn't move very fast. Wait for your entry point. More conservative traders can use a stop closer to $96 or the 200-dma.
FYI: The TLT is an exchange traded fund that tries to mimic the performance of the Barclays Capital U.S. 20+Year Treasury Bond Index.
Jan. 09th, 2010 - entry price on TLT @ 89.29, option @ 6.40
symbol: VJL-MG, JAN 2011 $85 LEAP put - current bid/ask $4.40/4.80
-stop loss on TLT @ 100.50
Jan. 09th, 2010 - entry price on TLT @ 89.29, option @ 8.90
symbol: YLI-MB, JAN 2012 $80 LEAP put - current bid/ask $6.20/7.30
-stop loss on TLT @ 100.50
Chart of TLT
UNH $33.16 +0.06 -- UnitedHealth Group Inc.
Shares of UNH peaked near $36.00 the day after Scott Brown won the Massachusetts senate race. The stock promptly turned lower and the correction has shaved off nearly 10%. While the future for healthcare stocks just got a lot brighter last week I wouldn't be surprised to see UNH dip toward $30 again. Wait for a pull back near the $30 region to open new bullish positions.
The plan was to use small positions to limit our risk.
Our long-term target is $42.50.
Dec 16th, 2009 - entry price on UNH @ 31.55, option @ 3.80
symbol: VUH-AG, 2011 JAN $35 LEAP call - current bid/ask $3.85/3.95
-stop loss on UNH @ 28.95
Chart of UNH:
UYG $5.47 -0.34 - ProShares Ultra Financials (2x) ETF
The UYG gave up 8.6% in the last four trading days. The breakdown under the small cloud of moving averages near $5.75 is definitely bearish. More conservative traders will want to seriously consider an early exit right now. The only reason to not exit now would be to hope for an oversold bounce so we can exit on a bounce back near $6.00. I don't have high hopes for the banking sector right now. Not with Obama painting a big target on the banks.
I am not suggesting new positions at this time.
Our second and final target is $9.50.
FYI: The UYG trades off the DJUSFN index.
Our strategy called for buying the ETF instead of the options.
Current position in the UYG = $1.50 entry (stop loss: 5.30)
10/14/09 Exit - Sell Half @ 6.31 (gap open exit, +320%)
Chart of UYG:
VICR $ 8.86 +0.06 -- VICOR Corp.
A positive gain for VICR on Friday is encouraging but I don't expect the strength to last. The short-term trend for VICR has turned bearish. I would now expect a pull back toward $8.00. Wait for a dip and probably a bounce near the $8.00 region before considering new long-term positions. More conservative traders may want to raise their stops toward the $8 level (but not too close).
Our twelve-month target is the $13.50-14.00 zone (one reason I prefer the stock over the option). Remember, if the market dips in January VICR will probably dip with it.
Dec 26th, 2009 - entry price on VICR@ 9.30, option @ 1.40
symbol: VQV-GB, 2010 JUL $10 call - current bid/ask $0.60/0.95
-stop loss on VICR @ 7.45
- or -
Dec. 26th 2009 - entry price on VICR (the stock) @ 9.30
-stop loss on VICR @ 7.45
Chart of VICR:
BAC $14.90 -0.57 - Bank of America Corp.
President Obama's new proposed rules on the banks is an unforeseen event and investors are worried. The bank stocks have reversed sharply lower since Obama voiced these new limitations. Shares of BAC hit $14.71 on Friday afternoon as the market accelerated lower. Our stop loss was hit at $14.75.
If BAC continues to correct lower I would look for a pull back toward $12.50 and if things get really bad the $10.00 region.
Jan 25th, 2009 - entry price on BAC @ 6.24, option @ 2.38
symbol: VBA-AB, JAN 2011 $10 LEAP call - Stopped out @ $5.50
-stop loss on BAC @ 14.75 hit on 01/22/10
01/22/10 Stopped out -- option at $5.50 (+131%)
10/31/09 Sell Half -- option at $6.00 (+152%)
Chart of BAC
BQI $0.92 -0.04 -- Oilsands Quest Inc.
Shares of BQI plunged 14% on January 19th as investors reacted to some big news in the company. I think shareholders were probably right to react so negatively. BQI announced that not only was their CEO, Mr. Hopkins, leaving but that BQI was selling its oil shale assets near Pasquia Hills in Saskatchewan to a new company named Canshale Corp. Canshale happens to be a new company formed by the very same Mr. Hopkins. Two more board members were jumping ship and moving to Canshale while another BQI executive announced his retirement for February.
BQI dipped to $0.95 on the 19th and hit our stop loss, on the nose, at $0.89 on January 20th closing this trade.
Nov 27th, 2009 - entry price on BQI @ 1.05, (buy the stock)
-stop loss on BQI @ 0.89
01/20/10 Stopped out at $0.89 (-15.2%)
Chart of BQI:
RGLD $44.50 +0.44 -- Royal Gold Inc.
RGLD garnered some positive analyst comments on Friday but it wasn't enough to keep shares from hitting our stop loss. The stock really broke down on Thursday with a decline through its 200-dma and a low of $44.01. Friday morning RGLD hit our stop at $44.00 closing this trade. Gold miners will probably be a trade again later in the year. Right now they look too weak.
Nov. 7th, 2009 - entry price on RGLD @ 50.70, option @ 7.50
symbol: ZMO-AL, 2011 JAN $60 LEAP call - current bid/ask $2.60/2.85
-stop loss on RLGD @ 44.00
01/22/10 RGLD hit our stop @ $44.00, option at $2.35 (-68.6%)
Chart of RGLD