Daily Newsletter, Saturday, 06/18/2005
HAVING TROUBLE PRINTING?
Primed to Rise
Oil fueled overnight
market action Friday and set up the action for U.S.
markets. Gains in Asian and European commodity-related issues drove those
bourses higher. Steel-makers, miners and oil majors saw overnight gains, while
equities seemed to ignore the impact of rising crude costs and joined right
along. The FTSE 100 hit a new three-year high. Morning online newsletter
editions predicted a likely bump higher in U.S. equities, too. Equities were
primed to rise.
Still, with crude over
$57.00 a barrel as most U.S. investors woke opex Friday
morning, some nervously eyed charts of U.S. indices and pondered the estimates
for a widening deficit, wondering if an upside pop would hold. After the SPX
settlement and the final economic release were out of the way Friday morning,
would equities be free to decline?
They weren't going to decline pre-market, no matter what, it seemed. When the
current account data at 8:30 EST showed an unexpected widening to $189.4
billion, only the dollar and bonds seemed to react, despite the economic risks
from the burgeoning deficit. Equity futures
stayed positive, barely moving.
Shortly after the open, equities received a further boost from the Michigan
sentiment number. A higher than expected June number of 94.8, well above May's
86.9 and the expected 88.8, buoyed equities that were already climbing. Bad news
was good, and good news was even better.
Not far into the day, CNBC commentators and print articles began touting the
fact that the S&P 500 was positive for the year. Some might have missed a
important gauge of market strength, the Wilshire 5000's rise to
test the year's high and the brief pop above that level. As well, the important
DJUSHB, the Dow Jones Home Construction Index, zoomed to a new high above 1000,
and the Nasdaq raced up to test the neckline of a well-defined inverse H&S on
its daily chart.
Annotated Daily Chart of the Wilshire 5000:
While the Wilshire closed at a new high, that close was less than three points
higher than February's closing high, so it's essentially an equal high so far.
The Wilshire 5000 still faces resistance from Friday's high up to just above
12,200. While 12,000 has some historical significance as resistance and probable
major psychological significance, the upside breakout did not quite happen on
this index that is the broadest of all our indices.
SPX did manage that positive close for the year.
Annotated Daily Chart for the SPX:
The RUT broke above a descending trendline off last year's high, but couldn't
quite confirm the breakout by closing above the early March high.
Annotated Daily Chart of the Russell 5000:
The Nasdaq also tested important resistance and could not close above it,
although the Nasdaq's formation is potentially bullish.
Annotated Daily Chart of the Nasdaq:
The Dow has already confirmed one version of an inverse H&S on its daily chart,
candles have all shown some indecision since breaking over that
neckline. It will soon face a neckline for an inverse H&S on the weekly chart,
at the lower bold red line.
Annotated Daily Chart of the Dow:
Recent gains have caught some market participants by surprise. Potential new
breakouts over important resistance levels loom,
but formations such as inverse
H&S's can be rejected at the necklines, too. Some speculate that early gains
Friday were opex related, a theory that will be tested early next week, after
opex settlement is out of the way. Chart formations look easy to read and
breakouts or rollovers easy to determined, but now is no time to get married to
positions. A breakout may be a fake-out move, destined to be quickly reversed as
markets finally pull back to next likely support.
ready to jump out if indices reverse course. With indices looking so
overbought by many measures, including RSI, buying at these levels looks risky
to this writer, but one helpful exercise may be watching the relationship of the
indices with respect to tests of the 5- and 60-minute 100/130-ema's. Many
fast-moving indices have been bounding off the five-minute versions, and then,
if those fail, off the 60-minute versions on deeper pullbacks. The Russell 2000
is one of those indices.
60-Minute Chart of the Russell 2000:
Use the action surrounding these averages, combined with the resistance levels
identified above, to help guide your decisions. If the Russell 2000 were to open
at or below Friday's close, for example, bringing up the possibility of an
evening-star formation, watch first to see if it bounces
again from the
five-minute 100/130-ema's at 643.28 and 642.52, respectively. If not, there's a
possibility of a drop down to the 60-minute versions, particularly if the RUT
rolls over from retests of the five-minute versions. A decline down to the
60-minute versions would be enough to complete that evening-star formation,
although the 60-minute averages should keep rising for a while as the RUT drops.
A completion of an evening-star formation coupled with a change in trend,
by these averages being converted to resistance, might signal that
over the short-term at least, it's time to start selling rallies. A bounce over
resistance coupled with continued bounces from these averages maintains the
buy-the-dips mentality. In any trending market, identify a time frame in which
the security being watched is bouncing from the 100/130-ema's and watch for a
change in trend.
Charts show many bullish characteristics with some hesitation, while Friday's
current account information questions all this bullishness. Looking at the
numbers might be helpful. As had been anticipated, the revised deficit widened,
but it widened even more than some had expected, to $195.1 billion, a 3.6
percent increase. The deficit now comprises 6.4 percent of the GDP. The
component measuring the trade of goods created much of that deficit, with that
component's deficit rising to $186.3 billion. The goods and services deficit
increased more than it had
in the fourth quarter.
Foreign-owned assets increased by $226.1 billion. Unilateral current saw net
outflows of $27.1 billion, higher than had been seen in the fourth quarter.
Foreign official assets in the U.S. rose $24.7 billion, a number far less than
the fourth quarter's $94.5 billion gain. Foreign direct investment in the U.S.
and U.S. direct investment abroad both moderated. U.S.-owned assets abroad
increased by a more modest $60.7 billion than it had in the previous
Foreign purchases of U.S. equities moderated to $28.9 billion from the previous
quarter's $45.7 billion, and foreign purchases of corporate bonds also moderated
to $58.6 billion from the former $69.3 billion. Agency bond purchases fell to
only $800 million from the previous $43.2 billion. Net foreign purchases of U.S.
Treasuries climbed to $75.5 billion, however.
For those whose eyes are crossing as they sort through the various components, a
Street Journal interpretation of the data was that Americans had increased
purchases of foreign overseas goods, creating a deficit in goods. In part,
higher crude costs led to the higher amounts U.S. consumers spent on foreign
goods, but demand appeared to be higher, too. Net outflows for unilateral
current transfers also contributed to the deficit, but the WSJ thought income
and services surpluses helped offset those deficits.
Another article's writer felt more concerned.
That writer summed up the release
by noting that the current account deficit continues to rise steadily as a
percentage of the GDP. In the fourth quarter the current account made up 6.3
percent of the GDP. A year ago, it was only 5.1 percent. Also just this week,
Federal Reserve Governor Donald Kohn said that the current-account deficit
contributes to the greater-than-usual risks to the economy.
U.S. Treasury Secretary John Snow put a positive spin on the deficit. He
that it emphasizes the strength of the U.S. economy, showing that it's growing
faster than economies in Europe and Japan. The U.S. is importing more goods and
paying a higher price, since crude and dollar developments both contributed to
those higher prices in the first quarter. Recent data has corroborated Snow's
impression that the U.S. economy is growing faster than many others across the
globe, as they've shown recent signs of weakening. However, an economy that is
faster in comparison to weakening economies may not be a stellar
endorsement of the U.S. economy. This week, some television guests have again
begun to mention the "R" word with regard to the U.S. economy.
Developments in crude prices didn't offer consolation to those worried about the
impact of rising crude costs. It did cheer those heavily invested in
commodity-related issues, as those issues were seeing gains across the globe
Friday. Both the U.S. and U.K.
closed down consulates in Lagos, Nigeria, after
security threats in that country. Nigeria produces a better grade oil than OPEC
would if it geared up to replace any lost supplies from Nigeria. As Jim Brown
has been warning for some time and reiterated this week, it's not just a supply
problem that's heating up crude costs, but a problem in obtaining the right type
of crude. Next week, OPEC ministers are to consult again about a second increase
in production, with that consultation to
be held if the organization's price
index remains above $50 a barrel for seven days, a target already met. However,
the ability to produce light sweet crude and the refining capacity to turn that
into needed products remains questionable, no matter what reassurances OPEC
ministers make. Friday, the OIX, the oil index, rose to an all-time high,
closing at an all-time closing high of 504.27, just off the high of the day.
Also impacting the sector was news that Valero Energy
raised guidance, resulting
in a 4.25 percent gain. While VLO is not an OIX component, UCL is. CNOOC,
China's largest offshore oil producer, might make a counteroffer for Unocal
(UCL), some speculated, leading to a 3.62 percent pop in UCL.
At times during the day Friday, Nasdaq and S&P behavior and volume patterns
appeared bifurcated, with that bifurcation stalling the indices for a while. The
differences in behavior were attributed at least in part due to Adobe Systems'
(ADBE) issuance of in-line guidance for the third quarter after beating
analysts' expectations for the second quarter by a penny. ADBE also revealed
that it will face a lawsuit concerning its proposed acquisition of Macromedia
(MACR). ADBE closed lower by 3.30 percent as some disappointed investors
abandoned the stock.
While ADBE's in-line guidance punished tech stocks, KB Home's (KBH) strong
earnings report for the second quarter helped. KBH was to close higher by
percent, but it wasn't the only homebuilder gaining, although many closed off
their highs of the day. Smith Barney upgraded KBH, HOV, PHM and RYL to buy
ratings, with some of these also being components of the S&P 500.
The DJUSHB, the Dow Jones Home Construction Index, leaped above 1,000, breaking
to a new all-time high. Mid-afternoon, the index slipped, falling quickly below
the mid-point of the day's range and raising the possibility of a key reversal
it actually closed negative, but it recovered to close above that
midpoint. The day's candle left a long upper shadow, however, and this index
bears watching Monday morning.
Financials gained attention due to Bank of America's $3 billion deal to take a 9
percent stake in China Construction Bank. That deal, reported during the
overnight session, will be the largest single foreign investment in China's
banking sector. Other company-related news included speculation that General
Electric (GE) might announce three vice chairman next week, with further
speculation that its current chief executive John Rice and chief executive of
transportation David Calhoun would number two of the three. GE rose 1.08
percent. The Wall Street Journal reported the GE news and also speculated that
Morgan Stanley (MWD) might be reconsidering its planned spin-off of credit-card
operation Discover due to a possible need for a heftier cash infusion than MWD
had expected. MWD
dropped 1.00 percent, but the XBD, the Securities Broker
Dealer Index, did squeak by with a 0.15 percent gain.
Circuit City (CC) also reported Friday, with its loss widening due to rising
costs. A portion of those costs proceeded from the need to rebrand 970 InterTan
Inc. stores that Circuit City bought last year. InterTan lost a judgment,
forcing the stores to stop using the RadioShack name in Canada. The title of one
article, "There's Little to Cheer at Circuit City"
says it all. Same-store sales
for stores open more than a year were flat. Inventory shortfalls of notebook and
desktop computers were significant, the chief officer acknowledged, and that
officer has requested a shakeup in merchandizing. The RLX did post a 0.51
percent gain, however.
Pre-market upgrades and downgrades included a Wachovia Securities downgrade of
Goldman Sachs Group, Inc. (GS) to a market-perform rating. This was due to
earnings' volatility since trading
comprises too big a proportion of GS's
revenue. Goldman Sachs was doing some rating of its own, starting Monster
Worldwide, Inc. (MNST) at an outperform rating, mentioning MNST's expected
increasing recruitment advertising market share. Bear Stearns downgraded The
Cheesecake Factory (CAKE) to a peer-perform rating, speculating that CAKE might
see another earnings miss this year. UBS and J.P. Morgan couldn't agree on the
prospects for Sanofi-Aventis (SNY) with UBS upgrading the
company and J.P.
Morgan downgrading it. UBS saw SNY's loss of a case involving one of its patents
as creating a buying opportunity. J.P. Morgan didn't see it that way,
speculating that sales could be impacted by as much as half by 2009.
Next week's economic releases include Monday's 10:00 release of leading
indicators. The word "leading" can be a bit misleading, pun intended, because
the conference board compounds this number from prior releases of indicators
as new orders, jobless claims, and money supply. Although markets
occasionally react to this number, they also sometimes ignore it. Tuesday's
releases include the ICSC-UBS store sales for the previous week, Redbook's
measure of sales at chain stores, discounters and department stores and the
State Street investor confidence index, with that last release at 10:00. This
last number is not a survey, but a direct measurement of how many risky
investments professional investors are
holding. With the RLX still gaining, but
with the daily chart showing small-bodied candles with upper shadows, those
figures on retail sales may assume importance.
Other than MBA mortgage figures and crude inventories on Wednesday, with crude
inventories certainly closely watched, the next releases don't come until
Thursday, with the usual jobless claims release followed at 10:00 am by May's
existing home sales and then at 4:30 by the money supply figure for the week of
With the DJUSHB reaching new record highs but showing signs of some
selling Friday afternoon, those home sales figures might be particularly
The next day, May's durable goods orders will lead the day's releases at 8:30,
with May's new home sales following at 10:00. Durable orders, with its
importance as a leading indicator of manufacturing activity, should catch market
A few important earnings reports will begin to
appear next week. Homebuilder
Lennar (LEN) reports before the open Tuesday, and Bed Bath & Beyond (BBBY)
reports Wednesday, giving investors another clue into how the
buy-a-home-and-furnish-it sectors are performing. FDX reports Thursday, as do
low-cost retailer Family Dollar (FDO) and A.G. Edwards (AGE).
Next week should be an important week, although early Monday action might be
somewhat volatile and difficult to fit into a pattern as opex settlement
Remember to watch the Russell 2000 for a potential
evening-star formation, and the Wilshire 5000 for a breakout above or rollover
below that important resistance. Watch those 100/130-ema's, tinkering with the
time interval for your preferred index so you can note a change in trend. Logic
says that indices shouldn't be performing as well as they are with the "R" word
beginning to be mentioned here and abroad, but don't argue if indices decide
otherwise. Keep a close watch
on those profits, however.
Most Recent Plays
by OI Staff
New Long Plays
Amer. Home Mtg Invest. - AHM - cls: 36.34 chg: +0.79 stop: 34.95
American Home Mortgage Investment Corp. is a mortgage real estate investment
trust (REIT) focused on earning net interest income from
mortgage-backed securities, and through its taxable subsidiaries, from
originating and servicing mortgage loans for institutional investors. Mortgages
are originated through a network of loan production offices as well as through
mortgage brokers and are serviced at the Company's Irving, Texas servicing
center. (source: company press release)
Why We Like It:
Trading in AHM over the last year has been a pretty rocky affair but it looks
like the stock
has finally found a more durable up trend. Shares recently broke
through significant resistance in the $34.00, 34.50 and 35.00 levels in early
June. Now shares look ready for another leg higher following its eight-day
consolidation. The Point & Figure chart is bullish and currently points to a
$43.00 target. Given the DJIA's bullish breakout on Friday we feel that a
slightly more aggressive entry point could work. That's why we're suggesting
long positions at current level's
given Friday's gain in AHM. More conservative
traders may want to strongly consider waiting for AHM to push past the $37.00
level and produce a new yearly high. A breakout over $37.00 should signal an end
to the current trading range and probably spark some short covering. The latest
data showed that short interest measured some 16.4 percent of AHM's 35 million
share float. We are starting the play with a stop loss under the $35.00 level.
More aggressive traders may want a wider stop.
We do not plan on holding over
AHM's late July earnings report so that gives us about five weeks for the stock
to reach our $39.50 price target.
Picked on June 19 at $36.34
Change since picked: + 0.00
Earnings Date 07/25/05 (unconfirmed)
Average Daily Volume: 445 thousand
Smurfit-Stone Cont. - SSCC
- close: 11.68 chg: +0.37 stop: 10.99
Smurfit-Stone Container Corporation (NASDAQ: SSCC) is the industry's leading
integrated manufacturer of paperboard and paper-based packaging. Smurfit-Stone
is the leading producer of containerboard, including white top linerboard;
corrugated containers; multi-walled and specialty bags; and clay-coated recycled
boxboard. SSCC is the world's largest paper recycler, annually processing and
selling more than 6.5
million tons. In addition, Smurfit-Stone is a leading
producer of solid bleached sulfate, folding cartons, flexible packaging, labels,
and point-of-purchase displays. With approximately 38,600 employees working at
nearly 260 manufacturing facilities, Smurfit-Stone can provide paperboard and
packaging solutions for any customer, large or small, anywhere in North America.
(source: company website)
Why We Like It:
Wow! The selling in SSCC has been painful. Over the last
three months the stock
has dropped from the $17.00 region to $11.00 (actually 10.61). It's probably not
a coincidence that the Point & Figure chart's bearish target was the $11.00
level. Now that its P&F target has been hit we're starting to see signs of a
bounce. The action in SSCC over the last four weeks looks like a bottoming-type
of consolidation. Volume on Friday's rally was way above average and pushed SSCC
through the top of its four-week trading range. SSCC has also
broken out through
its three-month trendline of resistance (see chart). Combine all these factors
together and SSCC looks like a decent bullish candidate but we'd have to label
this as a speculative play. We are willing to go long at current levels but
readers may want to review some alternative entry points. More conservative
traders may want to wait for SSCC to clear the $12.00 level and or its 40-dma
near $12.00 or its 50-dma near 12.43. Another alternative would be to look for
dip into the $11.40-11.20 range. We are going to target a move into the
$13.75-14.00 range but we do not plan on holding over SSCC's July earnings date.
Picked on June 19 at $11.68
Change since picked: + 0.00
Earnings Date 07/22/05 (unconfirmed)
Average Daily Volume: 2.4 million
Updates On Latest Picks
by OI Staff
Long Play Updates
Canon - CAJ - close: 54.41 change: +0.12 stop: 53.45 *new*
We are two weeks into our bullish play on CAJ and the stock isn't going
anywhere. Shares continue to consolidate sideways between $53.50 and $55.50.
Recently we've been suggesting that traders only consider bullish positions if
can trade back above the $55.00 level, which hasn't happened in several
days. We're starting to turn even more cautious on the stock. If CAJ doesn't
produce some upward momentum soon we'll probably close the play and look
elsewhere. We are going to raise our stop loss to $53.45.
Picked on May 29 at $55.24
Change since picked: - 0.83
Date 04/27/05 (confirmed)
Average Daily Volume: 157 thousand
Caremark - CMX - close: 44.45 chg: +0.35 stop: 42.45 *new*
Strength in the drug sector and a decent market day overall on Friday helped
push CMX back above its 10-dma and 21-dma. CMX is now pushing up against
round-number resistance at the $45.00 level again. We remain bullish on the
stock and continue to target the $47-48 range but CMX's volatility over the past
of weeks may suggest that conservative traders should avoid it. CMX has
not traded below $42.78 in about a month. We're going to raise the stop loss to
Picked on May 09 at $43.30
Change since picked: + 1.15
Earnings Date 05/03/05 (confirmed)
Average Daily Volume: 2.6 million
- GBX - close: 29.81 change: -0.61 stop: 27.99 *new
GBX is a buy-the-bounce from the bottom of the channel type of play. After
pushing back above its simple 200-dma the stock consolidated sideways for about
two weeks. The recent breakout through the top of its short-term trading range
and its 50-dma and the $30.00 level looked very promising. Friday's decline was
a surprise considering the strength in the Dow Transportation average. We would
watch for a bounce from the $29.50
level and if a bounce occurs then traders can
use it as a new bullish entry point. We are going to raise our stop loss just a
bit to $27.99. Our target is the $32.50-33.00 range.
Picked on June 01 at $28.67
Change since picked: + 1.14
Earnings Date 06/29/05 (unconfirmed)
Average Daily Volume: 227 thousand
Electric - GE - close: 36.50 chg: +0.39 stop: 34.95
Hmm... what do we do now? Thus far we've been patiently waiting for GE to pull
back into the $36.00-35.50 range so we can buy the dip. Yesterday we
specifically stated that if the DJIA can breakout over the 10,600 level then GE
might rally with it before we can jump in. That is exactly what we saw on
Friday. GE added over one percent on very big volume but the volume was probably
option expiration related.
Plus the rally had already begun to fade by Friday
afternoon. At this time we're going to stick to our plan and wait for GE to dip
into our suggested trading range. However, you the reader may want to consider
waiting for GE to dip into our entry range and then bounce back out before
considering new positions. Furthermore, we're quickly running out of time on
this play as we do not plan to hold over GE's mid-July earnings report. GE is
not a very fast mover and it might not be worthwhile
to trade the stock for such
a short duration. Longer-term traders willing to hold the stock for six to
twelve months may still want to consider a bullish entry point on a dip toward
GE's 200-dma or better yet a bounce from GE's 200-dma.
Picked on May xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/16/05
Average Daily Volume: 18.7 million
Georgia Gulf - GGC - close: 36.08 change: -0.33 stop: 33.49*new*
GGC continues to creep higher, showing decent relative strength and slowly
breaking through overhead resistance levels. We would watch for a dip toward the
$35.40 level or the $35.20 level as new bullish entry points. Our target remains
the $38.50-39.50 range. We are going to raise our stop loss to $33.49 to reduce
Picked on June 05 at $34.33
Change since picked: + 1.75
Earnings Date 07/28/05 (unconfirmed)
Average Daily Volume: 598 thousand
ExxonMobil - XOM - close: 60.89 change: +0.77 stop: 55.90
Crude oil continues to climb and worries over instability in Nigeria and the
closure of the U.S.
and British embassies did not help matters. The oil sector
is breaking out to new highs and XOM is slowly trying to keep pace. Shares of
XOM have broken through the $60.00 level on strong volume, which is good news.
Yet it's worth noting that the stock looks short-term overbought. We would watch
for a dip back toward the $60.00 level or even the $59.50 level if you are
looking for a new entry point. Our target is the $63.00-64.00 range.
Picked on June 09 at $58.44
Change since picked: + 2.45
Earnings Date 07/28/05 (unconfirmed)
Average Daily Volume: 20.9 million
M/I Homes Inc - MHO - close: 54.30 chg: +1.49 stop: 50.98 *new*
MHO almost made it to our target on Friday. A strong earnings report from larger
rival KBH and several upgrades in the group from Smith Barney helped
homebuilding sector to another new all-time high. Shares of MHO gapped open and
traded to an intraday high of $54.70. Our target is the $55.00 level although
we're going to adjust that to $54.90-55.20. We are also encouraged that MHO's
gain today has put it above the trendline of potential resistance (see chart).
However, the group and MHO look a little overbought so we would expect shares to
fill the gap from Friday morning. Traders can watch for a dip back to the $53.00
region. We are raising the stop loss to breakeven at $50.98.
Picked on June 14 at $50.98
Change since picked: + 3.32
Earnings Date 07/25/05 (unconfirmed)
Average Daily Volume: 143 thousand
Nova Chemicals - NCX - cls: 32.77 chg: -1.77 stop: 31.95 *new*
Ouch! NCX had turned in a very impressive
week with a rebound from the $30.50
level to a Thursday high of $34.80. Yet Friday experienced some heavy profit
taking that brought NCX back below its simple 50-dma and previous resistance at
the $33.00 level. This looks like bad news but it also looks like NCX has filled
the gap from Wednesday morning so we are willing to give the stock another day
or two to turn around again. However, we would not suggest new bullish positions
until NCX traded back above $33.50 or better. Plus,
we're raising the stop loss
to $31.95 to reduce our exposure.
Picked on June 01 at $33.03
Change since picked: - 0.26
Earnings Date 07/20/05 (unconfirmed)
Average Daily Volume: 660 thousand
Sirius Satellite Radio - SIRI - cls: 6.02 chg: +0.03 stop: 5.59
We are a little disappointed that
SIRI did not participate more in Friday's
market bounce but tech stocks or at least many NASDAQ stocks appeared to have
taken the day off. We're even more surprised at SIRI's lack of movement after
learning that UBS had reiterated its "buy" rating on the stock and raised its
price target to $7.40. This could be a warning sign. Thus far the stock remains
stuck under resistance in the 6.10-6.11 region. We see no change in our strategy
and continue to target the $6.50 level
but we're not suggesting new positions at
this time. We are raising our stop loss a few cents to $5.59.
Picked on May 22 at $ 5.65
Change since picked: + 0.37
Earnings Date 04/28/05 (confirmed)
Average Daily Volume: 40.0 million
Sohu.com - SOHU - close: 22.33 change: +0.64 stop: 19.99
aggressive momentum play in Chinese Internet stock, SOHU, continues to
perform well. Shares added another 2.95 percent on Friday with volume coming in
well above average. Although it is worth noting that the volume is probably
related to Friday's option expiration. We are still bullish on the stock but
shares are beginning to look a little extended. Traders can expect a dip back
toward the simple 10-dma soon. Our target is the $24.00 level. The P&F chart
currently points to a $29.00
Picked on June 13 at $21.25
Change since picked: + 1.08
Earnings Date 07/28/05 (unconfirmed)
Average Daily Volume: 924 thousand
Short Play Updates
General Maritime - GMR - close: 41.84 change: +1.09 stop: 42.01
Our bearish play on oil tanker stock GMR is in
serious jeopardy of being stopped
out. Global concerns over stability in oil-producing Nigeria sent the price of
crude higher on Friday. The tanker stocks, which have previously been ignoring
the rising in crude, suddenly came alive again. GMR is resting just under
resistance at its trendline of lower highs near the $42.00 level. We are not
suggesting new bearish positions unless GMR trades back under $39.90 again.
Picked on June 16 at $39.90
Change since picked: + 1.94
Earnings Date 07/25/05 (unconfirmed)
Average Daily Volume: 720 thousand
Closed Long Plays
Archstone-Smith - ASN - close: 38.98 chg: +0.82 stop: 36.26
Target achieved. Another strong day for real estate-related stocks helped push
ASN higher. Shares traded into and almost through our
target range of
$38.50-39.00. We are closing the play per our game plan. The stock is nearing
resistance at its December highs so investors still holding positions should use
Picked on May 06 at $36.26
Change since picked: + 2.72
Earnings Date 04/26/05 (confirmed)
Average Daily Volume: 811 thousand
Enterprises - MVL - close: 20.78 change: -0.39 stop: 20.45
We are calling it quits on MVL. The stock's relative weakness this past week has
sapped our desire for the stock. Shares have been churning under new resistance
at the $21.20 level. There are only three weeks left before the company's
Fantastic Four movie hits theaters here in the U.S. and we would have expected
any pre-opening run up in the stock to have begun already.
Picked on June 01 at $21.86
Change since picked: - 1.08
Earnings Date 07/28/05 (unconfirmed)
Average Daily Volume: 911 thousand
Closed Short Plays
Today's Newsletter Notes:
Market Wrap by Linda Piazza and all other
plays and content by the Option Investor staff.
Option Investor Inc is neither a registered Investment Advisor nor a
Broker/Dealer. Readers are advised that all information is issued
solely for informational purposes and is not to be construed as an
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