There were a number of stocks that caught my eye today. I wanted to share them as potential trading ideas.
NAV is bouncing from its trendline of higher lows. Readers might want to buy the stock on a new rally past $44.00 or $45.00. NAV still has some resistance near $48.00 but the larger trend is still up. I'd use a tight stop to limit risk. It's possible NAV has formed a bearish double top so trade small if you decide to pursue it.
MO has been consolidating above resistance at the $18.00 level. Nimble traders could try buying dips near $18.00 with a tight stop. I'd look for a new relative high.
LEAP Wireless (LEAP) looks like it's forming a bottom near its long-term lows. LEAP has resistance at $18.00 and again at $19.00.
TXT is showing a lot of relative strength and broke through resistance in the $16.00-16.50 zone. I wouldn't chase it but watch it to see where it finds support.
Finally, gold futures were in rally mode and most of the gold miners were surging. The DGP is actually a double-long gold ETN that is breaking out. However, I haven't done any research yet to see if the metal ETNs are coming under the same scrutiny as the oil and gas ETNs. If they are then we want to avoid a leveraged ETN like the DGP. An alternative might be the GDX gold-miner ETF or the GLD.
NEW BULLISH Plays
Costco - COST - close: 50.65 change: +0.00 stop loss: 47.90
Why We Like It:
Late last month COST broke out over significant resistance at $50.00. The recent pull back is now retesting this level as support. The move is offering a bullish entry point to buy the dip. Shares should have additional support with the exponential 200-dma near $49.60 and the 50-dma near $48.00. Readers might consider this an aggressive entry point because August same-store sales data for many major retailers comes out tomorrow.
Personally, I think the August same-store sales data for the retail sector will be below expectations but expectations are already pretty low so there is a chance for an upside surprise. I don't have a bias on COST's results tomorrow. The upward trend suggests investors are bullish. More conservative traders can wait and see how shares react to the news first and conservative traders may want to use a much tighter stop loss in the $49.50-50.00 zone.
Our first bullish target is $54.90. Currently the Point & Figure chart is bullish with a $58.00 target.
Entry on September 02 at $50.65
Change since picked: + 0.00
Earnings Date 10/07/09 (unconfirmed)
Average Daily Volume: 4.0 million
Listed on September 02, 2009