A Revolting Development for Buyers
closed the week with a bad taste in their mouth after starting out the
week with a very nice bounce. It brings to mind the phrase from the old 1950s
"Life of Riley" TV show. What a revolting development this has turned out to be.
So much promise of a Q2 earnings bounce and so little follow through. While the
bulls were hoping for a rebound to take us back to the mid-May highs that hope
was dashed when that rebound failed at 10400 and what we got was a retest of the
instead. This left little to cheer about into the long holiday weekend.
New Long Plays
Berry Petrol. - BRY - close: 55.23 change: +2.35 stop: 51.95
Why We Like It:
Picked on July 03 at $55.23
Forest Oil - FST - close: 43.65 change: +1.65 stop: 41.25
Why We Like It:
Picked on July xx at $xx.xx <-- see TRIGGER
New Short Plays
Long Play Updates
CB Rich. Ellis Grp - CBG - cls: 43.13 chg: -0.73 stop: 39.99
After a strong bounce from the $40.00 level several days ago CBG finally hit some profit taking on Friday morning. Yet even then the selling didn't last long and traders were there to buy the dip. We remain positive on the stock but we're not suggesting new positions. Our target is the $44.50-45.00 range.
Picked on June 20 at $41.40
Cameco - CCJ - close: 45.94 chg: +1.19 stop: 41.47
CCJ is showing lots of relative strength with Friday's 2.65 percent rally and breakout over round-number resistance at the $45.00 level. The move on Friday helped produce a new ascending triple-top breakout on CCJ's P&F chart, which points to a $59 target. If you missed the early entry points we'd buy this breakout. Or you can hope for a pull back toward the $45 level, which should now act as support. Our target is the $49.50-50.00 range.
Picked on June 27 at $44.14
Caremark - CMX - close: 44.44 chg: -0.08 stop: 42.45
The MACD indicator is growing closer to a new buy signal but we remain cautious. We are not suggesting new bullish plays at this time. Our target remains the $47 level.
Picked on May 09 at $43.30
Deckers Outdoor - DECK - cls: 24.79 chg: +0.16 stop: 23.95
If you're bullish on DECK it's been a disappointing week. The stock failed to produce any upside breakout following the move through resistance at $25.00 and its 50-dma. Instead DECK has consolidated sideways between $24.00 and $25.20. We would not suggest new bullish positions until DECK does trade back over $25.00 and more conservative traders will probably want to wait until DECK trades over $25.20. Our target s the $29.50-30.00 range but we plan to exit before the company's late July earnings report.
Picked on June 22 at $25.88
Short Play Updates
Amazon.com - AMZN - close: 32.91 chg: -0.18 stop: 34.81
So far so good. AMZN has broken down through multiple levels of support in the last week and has continued to sink. The rest of the major Internet stocks, excluding GOOG, don't look so great either. We are targeting a drop to its April low at $30.60. The biggest risk we see would be a surprise positive earnings report from another company in the group like GOOG or YHOO. Fortunately, we only need to worry about YHOO who is estimated to report on July 19th.
on June 29 at $33.35
Forward Ind. - FORD - close: 17.88 chg: +1.89 stop: 18.35
Whoa! Talk about a whipsaw. FORD is showing a lot of volatility. Friday's 11.8 percent rebound erased almost all of its previous two days of losses. We would be very careful here. A failed rally at the $18.00 level might be used as a new bearish entry point but we would hesitate to initiate new positions. FORD does have a lot of short interest and Friday's sharp rebound could spark some short covering!
Picked on June 29 at $17.23
Lear Corp - LEA - close: 36.40 chg: +0.02 stop: 38.51
GM may have turned things around last month with its employee-pricing discount program but the American carmakers are still struggling. That's one of the reasons why LEA, a parts supplier, looks so bearish here. The action over the last few months looks like a big bear flag pattern and the breakdown last week just broke through the bottom of the flag. The oversold bounce failed at LEA's 40 and 50-dma's. We would use that as a new entry point. The P&F chart is bearish and points to a $7.00 target. We are targeting a decline toward the $31.00-32.00 range. We will plan on exiting ahead of its late July earnings report.
Picked on June 26 at $36.37
Rogers Corp - ROG - close: 40.65 change: +0.10 stop: 42.51*new*
The consolidation in ROG continues to narrow and the stock spent most of Friday in a 40-cent range. Currently ROG is hovering above round-number support at the $40.00 mark. After a week at this level more conservative traders may want to consider taking some profits here and now. There is still a chance that ROG could bounce back toward the $42 level and test its simple 200-dma. A failed rally there might be consider a new bearish entry point but keep in mind we've been targeting the simple 50-dma. The 50-dma keeps climbing and our target is now at $39.56. We do not plan on holding over the July earnings report. We are going to lower our stop loss to $42.51.
Picked on June 20 at $42.40
Sina.com - SINA - close: 27.59 change: -0.31 stop: 29.31
SINA is a new bearish candidate we added on Thursday night. Friday saw the stock look another 1.11 percent. We see no change from our original update. A reprint follows:
It looks like investors were not impressed with SINA's press release today about the company's launch of a self-developed search engine called "iAsk". The rest of the Internet sector, Google excluded, also looks weak and prone to more profit taking ahead. Technically we notice that SINA has broken down below its six-week trendline of support about four days ago when it broke below its simple 50-dma. Today's decline under the $28.00 level is another sign of weakness. The Point & Figure chart is already bearish and currently points to a very bearish $2.00 price target. We are going to suggest bearish positions here and target the April lows with a $25.50-25.75 range. We'll try and limit our risk with a stop loss at $29.31. More aggressive players can put their stop above the 200-dma near $30.00. We do plan on exiting ahead of SINA's late July earnings report.
Picked on June 30 at $27.90
Closed Long Plays
Closed Short Plays
Today's Newsletter Notes: Market Wrap by Jim Brown and all other plays and content by the Option Investor staff.
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