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New Plays
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New Long Plays

Editor's note:

We encourage everyone to read this weekend's market wrap. If you have then feel free to skip ahead to the play updates. If not we want to caution you about initiating any new bullish positions. The Dow Jones Industrial Average is up 700 points in just the last four weeks and looks very overdue for some profit taking. To make matters worse the rally in the DJIA stopped right at major resistance (see chart) at its five-year trendline. Granted the DJIA is an index of just 30 stocks but the S&P 500 and the NASDAQ composite, while both have broken out to new highs, both also look just as overbought and due for a correction. Given these conditions we're going to hold off on adding new positions to the newsletter tonight. More aggressive traders may want to look over these speculative candidates: Gateway (GTW) looks poised to make a run towards its 200-dma but watch out for resistance near $3.25. IMS Health (RX) has recently broken out from its three-month descending channel and news of the canceled merger may continue to fuel the rebound.

Chart of the DJIA:

New Short Plays

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