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Daily Newsletter, Saturday, 8/15/2015

Table of Contents

  1. Market Wrap
  2. New Plays
  3. In Play Updates and Reviews

Market Wrap

Sigh of Relief

by Jim Brown

Click here to email Jim Brown

Investors were breathing a sigh of relief at the close on Friday. After a week of extreme volatility with multiple 200+ digit swings on the Dow the indexes closed the week with gains. Those gains were minimal but the Dow closed +325 points off its lows for the week.

Market Statistics

The Dow declined -504 points from its high for the week at 17,629 on Monday to the low of the week at 17,125 on Wednesday. The +325 point rebound off that low suggests buyers are starting to nibble at stocks again.

Friday's economics were slightly positive and not really a driver for the market. The late week rebound was more a result of seller exhaustion after the Chinese devaluation of the yuan caught everyone off guard. Wednesday's dip was seen as somewhat of a capitulation event and retest of the July lows.

The Producer Price Index for July rose +0.2% after gains of 0.4% in June and +0.5% in May. The decline in wholesale prices was blamed on the -20% decline in oil prices from the June high of $63.12. Final demand for goods declined -3.7% year over year while demand for services rose +0.6%. Core processed goods declined -3.1% and core unprocessed goods fell a whopping -30.7%. That is a direct result of the decline in oil and other commodities.

The weak PPI report could cause the Fed to rethink their plans to hike rates in September. However, the Fed has been steadfast in claiming that the drop in commodity prices was transitory and would not impact inflation long-term. The current set of inflation numbers could cause them to reevaluate their view of the "transitory" concept.

The Industrial Production report for July showed a rise of +0.6% compared to estimates for +0.3%. The reason for the stronger rise was purely auto related. Durable goods production rose +1.2% but inside that category was a +10.6% rise in motor vehicles and parts. That came after a -4.3% decline in June. Several domestic automakers either shortened the annual summer shutdowns or cancelled them completely. This caused a monster spike in auto production. Normally the seasonal adjustments level out the July/August period and the plant shutdowns.

In the bad news section, there were downward revisions to May and June that pushed the annualized production rate down from -1.4% to -2.0%. Overall, the report was disappointing.

The first consumer sentiment reading for August declined slightly from 93.1 to 92.9. The internals components barely changed. The present conditions component declined from 107.2 to 107.1 and the expectations component declined from 84.1 to 83.8. As Obi-Wan Kenobi would say, "Nothing to see here, move along." (FYI - there is a strong rumor of an Obi-Wan Kenobi movie spinoff from the Star Wars series)


The economic calendar is pretty busy next week but the two main events will be the FOMC minutes on Wednesday and the Philly Fed Survey on Thursday. The minutes will be under a magnifying glass for clues about a September rate hike. I doubt there will be any real clues but you can bet the market will become jittery ahead of the release.

The Philly Fed Manufacturing Survey is a proxy for the national ISM Manufacturing due out two weeks later. This is the first look at the August manufacturing conditions.

The new residential construction and existing home sales reports will be of interest just to make sure sales did not fall off a cliff in August. Since sales and construction both decline in late summer and into the fall these reports are just a pass-fail test for the sector. It would take a material decline in the numbers to produce a market response.


There were no stock splits announced last week. We are still waiting on the UnderArmour board meeting to set the date on their previously announced split.


The earnings calendar is finally shrinking. The material earnings for next week are primarily in the retail sector. Walmart, Target, Staples, Sears, Gap Stores, Home Depot, Limited, Disks Sporting Goods, Hibbett Sports, Lows, Foot Locker and Urban Outfitters are the best known.

SalesForce.com, Deere and Agilent are the non-retail headliners.


El Pollo Loco (LOCO) was road kill on Friday with a -21% drop. Earnings of 18 cents were in line with expectations but down from 22 cents in the comparison quarter. Revenue of $89.5 million missed estimates for $93 million. Guidance was also weak. The CEO said we "kind of lost the value focus" in the first half of 2015 and put too much emphasis on the higher dollar items. Same store sales of +1.3% fell short of estimates for +3.2%.


Nordstrom (JWN) rallied after posting earnings of $1.09 compared to estimates for 90 cents. Total revenue also rose +9.1% to $3.701 billion. Same store sales at Nordstrom's rose +1.1% while the Rack stores rose +13%. Nordstrom online sales rose +20% and NordstromRack.com/HauteLook sales rose+50%. The combination of all of the above pushed Nordstrom's total same store sales to +4.9%. Total stores rose +13 to 304. Eleven of those new stores were the Rack stores, which are in high demand today. The company raised guidance from 7-9% sales growth to 8.5-9.5%. Earnings per share guidance rose from $3.65-$3.80 to $3.85-$3.95.


Sysco Corp (SYY) surged +7% on news Nelson Peltz's Trian fund had acquired a $1.6 billion, 7.5% stake and intended to go active against the board. Announcing the 42 million share stake gives Peltz one week to nominate individuals for a board seat. The nominations close on August 21st. Judging from the stock chart the news of his position was leaked. Shares rebounded from $35.73 the prior Friday to $38.50 this Friday before the headlines broke. Once the news was reported on CNBC shares rallied +$3 to close at $41.39 and an eight-month high. Volume was eight times normal.


Lumber Liquidators (LL) rallied +8% after news broke that Julian Robertson's Tiger Management had acquired 238,000 shares. LL was crushed after a 60 Minutes report claiming their flooring had a hazardous level of a cancer causing chemical. LL has reportedly denied the allegation but more than 10,000 customers have filed claims to get their floors replaced. 60 Minutes will be rerunning that broadcast on Sunday evening.


Twitter (TWTR) shares were up slightly after a rumor that the CEO search would end next week with the announcement that co-founder Jack Dorsey would be named CEO again. Sun Trust analyst Robert Peck believes Dorsey will get the CEO role and join product head Adam Bain and board member and co-founder Evan Williams as the "triumvirate of leadership." Peck said given the tough road ahead the guidance of this triumvirate might be the best solution.

However, other analysts were not as confident. Dorsey is CEO of Square, a payments company that is expected to IPO soon. Previously the board of Twitter said they would not consider a dual CEO role where the CEO still occupied a position elsewhere. Dorsey has said he wants to remain at Square.

This will give Twitter traders indigestion and should that announcement occur the stock could trade in either direction. Dorsey has his fans but Twitter investors were hoping for new blood that could hit the door running and turn the company around. It might be time to add some December $32 calls and some September $28 puts as insurance.


Whole Foods Market (WFM) was initiated with a sell rating by Pivotal Research. The analyst said in every single market Trader Joes is gaining market share against Whole Foods. Also, Walmart and Kroger have added numerous organic products at a much cheaper price. The individual store category is also getting crowded with Fresh Market (TFM) and Sprouts Farmers Market (SFM) also gaining share. With Whole foods, jokingly referred to as Whole Paycheck and the most expensive of the various other options, it is the most at risk.


Shake Shack (SHAK) finally floated enough stock to qualify for options. The rules require a 7 million share float in order to list options. Puts were trading at a higher cost than calls. Apparently, existing shareholders were looking for a way to protect against further downside. Traders were also looking for a way to profit from further declines. Puts down to $47.50 for August with only five days remaining were being bought with the stock at $55. The most active call was the September $65 with 711 purchased. Multiple analysts expect to see SHAK trade down to the IPO lows at $40.

The stock has a cult like following but it is really a very small company. They have 71 stores and plan to add 12 per year up to a target of 450. That would take them about 35 years at the current pace.


Tesla (TSLA) announced a secondary offering of 2.1 million shares earlier in the week at a price of $242. On Friday, they raised the offering to 2.7 million shares. Underwriters have an overallotment option of another 400,000 shares. Tesla shares did not decline because Elon Musk said he would buy $20 million of the shares being offered or roughly 82,645 shares. Musk already owns 28,288,697 shares worth $6.874 billion. What is another $20 million when you are hyping your own offering?


Alibaba's Jack Ma now owns the most expensive home in China. According to a report in the South China Morning Post, Ma bought a luxury home in Hong Kong for $193 million. On a square foot basis that is the second most expensive home in the world because it only has 9,890 square feet. At that price, you would expect a lot of drive up appeal but the street view of 22 Barker Road on The Peak is severely lacking. However, the opposite side has panoramic views.



Jack Ma better start worrying about Alibaba's share price or several million investors will be hunting him down. Shares traded at a historic low at $72 on Wednesday after the company reported its lowest revenue growth as a public company at +28% to $3.3 billion. Operating profits declined -25% to $832 million. Slower economic growth in China and stronger competition are hurting the Alibaba fan base. Rival Tencent said revenue rose +19% to $3.8 billion and net profit rose +25% to $1.2 billion. Jack's wealth declined by -$752 million on Wednesday. That has to hurt even for a billionaire.


General Electric (GE) signed a deal to sell GE Capital Bank's U.S. online deposits to Goldman Sachs (GS) for $16 billion. Goldman will acquire $8 billion in online accounts and $8 billion in brokered certificates of deposit owned by GE.

Also on Friday the company said it now expects approval of its deal to buy Alstom's energy business for $13.8 billion. The deal is backed by France and the EU Commission had some concerns. GE said they submitted a remedy package that addresses the commission's concerns and a speedy approval is expected.


John Paulson served notice that he was voting all of his 21.9 million shares in favor of the proposed merger of Mylan (MYL) with Perrigo (PRGO). He issued a press release that praised the deal. Shares of Perrigo rallied $3.50 on the news to close at $196.

However, Institutional Shareholder Services (ISS) recommended voting against the deal. Mylan has offered to acquire Perrigo for $75 in cash and 2.3 Mylan shares for each Perrigo share. As of Friday's close, that would value Perrigo at $200 per share.

ISS said the transaction would be "value destructive" and would incur significant dilution with no subsequent leverage. "Approving this proposal requires too heavy a belief that the 'real' synergistic opportunity is much greater than Mylan has been able to demonstrate." ISS also said it appears Mylan has been unable to win over the required 80% of shareholder approvals.

While the market appears to be expecting a Mylan win the analysts are far less hopeful. Mylan shares have languished at the $55 mark since Teva dropped its $40 billion hostile bid on July 24th and pursued a deal with Allergan for a similar amount.



Hercules Offshore (HERO) filed bankruptcy after revenue declined -67% because of the drop in oil prices and reduced offshore drilling activity. The company listed $1.3 billion in debt and $546.3 million in assets. The filing was done with the permission of the bondholders. Under the preapproved plan the bond holders will receive 96.9% of the company in exchange for the debt. Existing shareholders will retain 3% of the company plus receive some warrants. Under the plan, Hercules will receive $450 million in new debt financing. The money will be used to complete the construction of the new Hercules Highlander, which is currently under construction in Singapore. The jackup rig can operate in 400-feet of water and drill to 30,000 feet. The rig already has a five-year contract from Maersk Oil at a lease rate of $225,000 per day. Hercules operates 27 jackup rigs and 21 liftboats.


KKR's Samson Resources, a company they bought in a leveraged buyout in 2011 for $7.2 billion, is planning on filing bankruptcy by mid September. This was the largest LBO of an energy company at that time. The company has worked out a deal with lenders to turn over ownership to the debt holders. KKR had invested $4.1 billion in cash into the company. Samson will miss a bond payment due on Monday and use the 30-day grace period to try and seek broader creditor support for the plan.

Samson was primarily a natural gas producer and troubles started right after the LBO when gas prices fell to a decade low. Samson has been bleeding cash and has lost more than $4.5 billion since the buyout including $490 million in the first three months of 2015. Japanese firm Itochu Corp took a 25% stake in Samson for $1 billion and they are writing off the entire amount as a loss. Samson was debt free before the buyout but ended up with $3.6 billion in debt as a result of the LBO.

There will be more bankruptcies as the pain increases from oil prices remaining lower for longer than analysts had first predicted. Citigroup warned last week that prices would decline after Labor Day as demand slowed. Gary Shilling of Shilling and Company warned that prices could be headed for the $20s. However, other analysts believe Saudi Arabia has reached their pain threshold are could announce a cut in production in Q4.

There was a major development on Friday with regard to the exporting of U.S. oil. The Commerce Dept said it was "acting favorably" on a number of applications to export U.S. crude to Mexico in exchange for imported Mexican oil. The oil swaps involve licenses that are expected to be issued by the end of August and will last one year. Producers can ship light crude to Mexico in exchange for heavy crude from Mexico. Mexican refineries are old and they can process light crude easier. U.S. coastal refiners are better equipped to process the heavy crude, which they get from Mexico, Venezuela and the Middle East. Pemex said it was seeking to swap 100,000 bpd or 1% of U.S. production. While this event is not material for the price of oil it is the second such deviation by the Commerce Dept over the last year. This suggests the administration is becoming more open to ending the 40-year outright ban on exporting U.S. crude.

Oil prices declined to $41.35 on Thursday to a 6.5 year low. Energy stocks rallied +3% for the week. If you are looking for logic do not look in the equity markets. Energy stocks are so depressed that analysts are recommending them as a buying opportunity. Most carry decent dividends but most investors do not realize that these dividends are an endangered species.

With cash flows imploding, debt payments coming due and drilling expenses a daily occurrence, the odds of dividend cuts are very good. I wrote a couple weeks ago that I did not want to try and catch the falling knives in the energy sector.

Oil prices "should" continue lower because the fall maintenance season begins in about two weeks. Refiners will begin shutting down for maintenance and conversion to winter blend fuels. During this period, oil demand will decline about 1.5 mbpd at the peak and that will allow inventories to begin rebuilding again. Once the summer driving demand ends with the Labor Day weekend those crude inventories should rise quickly. Prices should continue to fall as inventories rise.

Active rigs were flat at 884 for the week ended on Friday. However, there was an addition of 2 oil rigs and decline of 2 gas rigs. As long as oil rigs continue to climb we should see oil prices continue to weaken.



The decline in oil prices plus the sudden drop in agricultural commodities pushed the CRB index to new 13-year lows. This will definitely give the Fed something to worry about with their "transitory" view of lower inflation.


Markets

Wednesday's dip and rebound caught a lot of traders off guard. Volume of 8.2 billion shares was 1.2 billion more than Tuesday's decline. Despite the sharp drop at the open to 2052 and a six-week low, advancing volume was higher at 4.32 billion shares compared to declining volume at 3.66 billion. There were plenty of buyers waiting for a dip to that level. There had been some heavy selling on Tuesday and Wednesday and I am sure the short interest increased significantly. Those shorts were squeezed hard on the rebound and were unable to reestablish enough positions to push the indexes back lower by Friday.

The S&P rose on Friday to close just under Thursday's high at 2091. If you look at a daily chart, it is still ugly. Friday's green candle is miniscule compared to the long candles for the last two weeks. However, there were some positive points.

The 200-day average at 2076 was broken severely on Thursday but the rebound back over that level kept it in play. The long-term horizontal support at 2075 was also in play all week and there were no closes under that level. While I may be grasping at straws here, the S&P appears to be setting up for a stronger rebound.

However, the S&P faces serious resistance at 2100 and 2110 and it will take more than a few dip buyers to push it higher ahead of the Fed meeting in September. If we look back to March the S&P has been stuck in this 2040-2130 range for the last six months. We have crossed the 2100 level dozens of times in both directions without a lasting move.

While it may appear that the S&P is setting up for a continued move higher, that move is probably not going to retest the highs. That 2100-2110 resistance is likely to remain firm and the index will continue to fluctuate in its current range. The expression "buy the dips and sell the rips" comes to mind. Traders employing this strategy over the last six months would have done well.


What I find amazing is that the percentage of stocks in the S&P with a bullish chart has not changed over the last two weeks despite all the volatility. We are stuck in the 52% range. Also, the AAII Investor Sentiment Survey confounded expectations last week with a surge in bullish sentiment. This is for the week ended on Wednesday. With Thr/Fri from the prior week and Tue/Wed all showing significant declines in the market you would have expected a surge in bearish sentiment and no gain in bullish sentiment.

Apparently, the big gains on Monday and the strong +275 point rebound from negative territory on Wednesday were enough to turn some people bullish. There was an increase in bearish sentiment as well so at least some traders were worried about the big drops. Neutral sentiment declined a whopping -10.6% so the big swings in both directions definitely polarized some opinions.



The Dow remains the weakest chart but the drop to 17125 on Wednesday could be seen as a retest of the February lows and traders definitely rushed to buy those stocks. The rebound slowed just under 17500 and the chart is still in a decline. While the dip recovery was amazing, it did not correct the trend in the chart. Resistance at 17500, 17600 and 17775 remains strong. The Dow is well under its 200-day average at 17821 but the Dow is not very reactive to averages because of the slim 30-stocks composition.

The 50/200 death cross last week is normally a sell signal but Bespoke was out with some analysis last week showing that the Dow has not followed that pattern either over the last 60 years. It was up after the cross about as much as it was down in the weeks that followed. I chalk this up to the lack of average reaction as I stated above. A death cross on the S&P would be more critical. That could also come in the next couple of weeks.

The Dow stocks were mostly neutral on Friday. There were no big winners or losers. With total market volume of only 5.17 billion shares it was the lightest volume day in 2015. Traders were exhausted from the huge moves over the last two weeks and they probably left early to try and squeeze one more weekend into their summer. There was a definite lack of conviction by both buyers and sellers.



The Nasdaq punched through support at 5000 on Wednesday but recovered to close back above that level. Thursday's rally failed at 5070 and collapsed back to 5033 at the close. Friday's +15 point gain closed at 5048 and failed to return to Thursday's highs. This is actually negative compared to the Dow and S&P. It would appear that the Nasdaq is nursing some weakness. This came from the biotech sector.

The Biotech Index declined hard the prior week and was down slightly by -1% last week. The index broke below its 100-day average and is struggling to hold over support at 4000. The biotech bubble may be bursting after the recent flurry of M&A sent stocks to nosebleed valuations. A sustained dip below 4000 would be a real drag on the Nasdaq.


Like the Dow the number of big winners/losers were limited on Friday. Most of the stocks on the top of the list were names most traders do not know and they had very little impact on the Nasdaq because of their small capitalizations.



The Russell 2000 barely hung on to the 1200 level last week. The index broke below that level on Thursday before rebounding and then dipped back to test it at 1199.46 on Friday. This is the critical level for the index and the market. A close materially below 1200 would be negative for market sentiment. The Russell index is in decline and while I would like to point to the support test last week as a material event, I do not want to recognize it as such until a couple days have passed. The Russell could still go either way.


The Vanguard Total Stock Market Index ETF (VTI) is still neutral. The ETF shows the same rebound as the other indexes with support at $106. At some point soon there will be a test of down-trend resistance and possibly a retest of that 106 level. The VTI is right in the middle of its range since March and approaching a decision point for direction.


While there were encouraging signs over the last couple days, it is too soon to make a judgment call over market direction. We are still in the summer doldrums and market volume will continue to slow over the next two weeks. Fund managers are not likely to be making major purchases ahead of the Labor Day holiday and the FOMC meeting but they may be interested in taking profits to raise cash for a post Fed dip. With the year rapidly slipping away those managers will be dumping underperforming positions in hope of snagging some winners with enough beta to lift their sagging returns before the year expires.

Morningstar reported that equity fund outflows for the first seven months of 2015 exceeded the entire year for every year since 1993. In July alone $14 billion flowed out of equity funds and that followed an $8 billion withdrawal in June. More than 56% of the S&P stocks are in a correction. More than 60% of the Russell 3000 stocks are in a correction. This is the most hated bull market in history. Despite the withdrawals, the S&P has remained within 3% of its historic highs. That is very good relative strength and it can be chalked up to stock buybacks. Companies have already bought back more stock in 2015 than in all of 2014.


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Random Thoughts


The Atlanta Fed's real-time GDPNow projection has sunk to +0.7% growth for Q3 compared to the 2.7% average forecast by the private sector. The Fed has got to be wondering how they can justify a rate hike in September with their own numbers showing less than 1% growth.

I believe the Fed is stuck between a rock and a hard place. The current zero percent interest rate was put in place as an emergency backstop to the financial crisis. After six-years, the low rate is no longer having any impact on the economy. While the U.S. is not growing at its full potential it is growing. However, as each day passes we near the next recession. Regardless of how well the Fed manages the economy the seven-year cycle will eventually bring us a new recession. If interest rates remain at zero the Fed will be left with few options to provide stimulus when that recession appears. They have to raise rates even though the economy is not strong enough to justify it.

The Fed has another problem that is rarely discussed. They continue to buy treasuries each month as securities in their portfolio mature. Basically this is QE light since they are maintaining the size of their balance sheet and keeping interest rates artificially low. They have two ways to deal with this. They can quit replacing maturing securities and let the portfolio decline over the next 5-7 years. That would be the preferred method. If they are forced to sell treasuries into the market the interest rates will rise possibly more than they would like.

The Fed is facing numerous options and headlines as the current recovery ages. If a recession appeared over the next couple of quarters, there would be some very tense discussions in the halls of the Fed. Since the Federal Reserve has never successfully unwound a period of monetary stimulus and they have never had a stimulus program this large, the long-term outlook for the markets is negative. There is always a first time for success but I doubt this is it.


In a survey by the WSJ, 82% of economists questioned expect the Fed to raise rates in September. Another 13% said the Fed would wait until December. WSJ Survey


Between March 2014 and May of this year China reduced its holdings of U.S. treasuries by -$180 billion. China's appetite for U.S. debt peaked at $1.65 trillion in 2014. Despite their reduced appetite for U.S. debt, the interest rates on treasuries have remained low. Mutual funds, institutions, insurance companies and other countries are picking up the slack. Bond funds have seen major inflows of cash seeking a return safe from the equity market's fluctuations. Major dealers have even said there is a shortage of quality securities in the market. The current uncertainty about China, Greece and Russia has increased the appetite for treasuries.

Overseas investors and institutions now own about $6.13 trillion in U.S. treasuries. That is up from $2 trillion in 2006. China owns roughly $1.47 trillion today. Japanese investors sold $9.4 billion in treasuries in June. That is the most in two years.

With political candidates constantly warning about the nearly $19 trillion in U.S. debt and the potential for it to rise to $25 trillion by early next decade the overseas appetite may be shrinking. Source


A couple of weeks ago China said it was going to support the stock market until the Shanghai Composite Index returned to 4,500. I said at the time this was a suicidal admission since naming a specific index level would only mean that investors would sell whenever the index neared that level. I said they would have to modify their support claims to a more generic form without specific numbers to prevent that from happening.

China realized the error of its admission. On Friday the China Securities Finance Corp (CSFC), the market regulator, said "for a number of years to come, the CSFC will not exit the market. Its function to stabilize the market will not change." The CFSC was tasked with buying shares in the market in order to end the collapse. The regulator was given a credit line of up to 3 trillion yuan ($500 billion) to halt the market collapse.


Jeff Hirsch at the Stock Trader's Almanac said August was proceeding as expected. The first nine trading days were down as is normally the case. The middle of the month surrounding option expiration was slightly more bullish with a cluster of 4-5 trading days with market gains. However, expiration week has been negative 3 of the last 5 years. The week following expiration was down more often than not.


Apple is reportedly farther along than expected on its self-driving electric car program. Emails acquired under a public records act request show that Apple was negotiating for test time at the GoMentum Station. This is a 2,100 acre former naval base near San Francisco that contains 20 miles of paved highways and city streets. The base is closed to the public and guarded by the military. The military claims it is the largest secure test facility in the world for testing CV and AV technologies. CV means connected vehicles and AV means autonomous vehicles. Mercedes and Honda have already used the facility to test their self-driving cars.

Apple is known to have hired dozens of automobile engineers and large-scale battery technicians. Tim Cook has toured various auto-manufacturing plants and Apple held discussions a couple years ago about buying Tesla. Apple Building a Car


Iran has as much as 50 million barrels of crude oil stored on tankers in the Persian Gulf. If sanctions are lifted this would allow them to put up to 500,000 bpd of crude oil on the market by mid 2016. This would force prices lower once again. Iran Hiding Oil


This year's El Nino could be the strongest since records were started 60 years ago. El Nino, begins with warmer than usual water temperatures in the Eastern Pacific. This modifies weather patterns around the entire world. In the U.S. it can bring heavy winter precipitation to California and the south. That would be great news for the drought stricken region. However, it can also bring warmer weather around the world including droughts in Australia, hurricanes in the pacific and a warmer planet in general. Since 2015 is already shaping up to be the warmest year on record we really do not need to see hotter weather ahead. Mother of all El Ninos


 

Enter passively and exit aggressively!

Jim Brown

Send Jim an email

"You can never make the same mistake twice because the second time you make it, it is not a mistake, it's a choice."

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New Plays

Bulls Still Have Momentum In This Healthcare Stock

by James Brown

Click here to email James Brown


NEW BULLISH Plays

Hologic Inc. - HOLX - close: 42.45 change: +0.72

Stop Loss: 39.70
Target(s): To Be Determined
Current Gain/Loss: Unopened
Entry on August -- at $---.--
Listed on August 15, 2015
Time Frame: Exit prior to earnings report in November.
Average Daily Volume = 2.5 million
New Positions: Yes, see below

Company Description

Trade Description:
HOXL looks like a strong bullish momentum trading candidate. The S&P 500 index is only up +1.6% this year. The NASDAQ is up +6.6%. Yet HOLX is up +58% and has more than doubled from its 2014 lows. That's because the new leadership team has turned things around.

HOLX's CFO was recently interviewed in CNBC. He said that 18 months ago their business was in decline and new leadership has turned things around. They see a lot of growth opportunities both in the U.S. and internationally, especially for their Genius 3D mammography business.

If you're not familiar with HOLX they are in the healthcare sector. According to the company, "Hologic, Inc. is a leading developer, manufacturer and supplier of premium diagnostic products, medical imaging systems and surgical products. The Company's core business units focus on diagnostics, breast health, GYN surgical, and skeletal health. With a unified suite of technologies and a robust research and development program, Hologic is dedicated to The Science of Sure."

The company has beaten Wall Street's bottom line earnings estimates the last four quarters in a row. Their most recent report was July 29th. HOLX reported its Q3 results of $0.43 per share. That's a +16% improvement from a year ago and four cents better than expected. Revenues were up +9.7% to $693.9 million, significantly above the $654 million estimate. GAAP gross margins soared +520 basis points to 54.6%.

Management raised their 2015 sales guidance from +7-7.4% to +9.1-9.5%. They also upgraded their earnings forecast growth from +13-13.7% to +17.1-17.8%. The stock soared almost +10% on this earnings report and bullish outlook.

Shares of HOLX have spent the last couple of weeks consolidating sideways in the $40.00-42.50 zone. This is bullish. Instead of correcting lower the stock has been digesting its gains in a sideways range. What makes this even more impressive is that HOLX has managed to maintain its gains even after legendary investor Carl Icahn said he had trimmed his position in HOLX. Icahn's company sold about six million shares in the $40 range. After this sale Icahn still owns 9.99% of HOLX. It's not like he's bearish on the stock.

Technically HOLX looks poised to breakout past short-term resistance near $42.50. If that occurs we want to jump on board. Tonight we are suggesting a trigger to open bullish positions at $42.65.

Trigger @ $42.65

- Suggested Positions -

Buy HOLX stock @ $42.65

- (or for more adventurous traders, try this option) -

Buy the DEC $45 CALL (HOLX151218C45) current ask $1.50
option price is a current quote and not a suggested entry price.

Entry disclaimer: To avoid an unfavorable entry point, we will not launch a new play if the stock gaps open more than $1.00 past our suggested entry point.

Option Format: symbol-year-month-day-call-strike

Daily Chart:



In Play Updates and Reviews

Traders Buy Midday Dip On Friday

by James Brown

Click here to email James Brown

Editor's Note:
It was a volatile week for stocks. Traders were still in a buy-the-dip mood on Friday and the afternoon rebound pushed the major indices back into positive territory for the session.

CBI has been removed. Both TSS and MRO hit our entry triggers on Friday.


Current Portfolio:


BULLISH Play Updates

ConAgra Foods, Inc. - CAG - close: 45.25 change: +0.81

Stop Loss: 43.25
Target(s): To Be Determined
Current Gain/Loss: -0.2%
Entry on August 10 at $45.35
Listed on July 30, 2015
Time Frame: Exit PRIOR to earnings on September 22nd,
Average Daily Volume = 3.3 million
New Positions: see below

Comments:
08/15/15: CAG is looking a lot healthier after Friday's +1.8% gain. Shares look poised to breakout past resistance at the $45.50 level. I would wait for a rally past $45.60 before launching new positions.

Trade Description: July 30, 2015:
Two years ago CAG spent $5 billion to buy private-label food maker Ralcorp. At the time, CAG called it a "transformational" deal. Unfortunately their private-label business has been nothing but a money pit.

CAG is in the consumer goods sector. According to the company, "ConAgra Foods, Inc., (CAG), is one of North America's leading food companies, with brands in 99 percent of America’s households. Consumers find Banquet, Chef Boyardee, Egg Beaters, Hebrew National, Hunt's, Marie Callender's, Orville Redenbacher's, PAM, Peter Pan, Reddi-wip, Slim Jim, Snack Pack and many other ConAgra Foods brands in grocery, convenience, mass merchandise and club stores. ConAgra Foods also has a strong business-to-business presence, supplying frozen potato and sweet potato products as well as other vegetable, spice and grain products to a variety of well-known restaurants, foodservice operators and commercial customers."

In spite of CAG's troubles with its private-label business the stock was trading at multi-year highs in mid June this year. Then on June 19th the stock soared more than +10%. Shares were already flirting with its all-time highs from the late 1990s in the $38-39 area. They vaulted higher when activist hedge fund JANA Partners announced they had amassed a 7.2% stake in CAG. JANA argued that CAG was undervalued and not doing enough to build shareholder value.

It would appear that CAG's management has embraced JANA's involvement and direction. They have already appointed two of JANA's nominees to the Board of Directors. When CAG reported its Q4 earnings on June 30th they announced they would exit the private-label business.

The private-label business, Ralcorp, makes stuff like cereal, pasta, crackers, jams, jellies, syrups, and frozen waffles. They currently account for about 25% of CAG's sales but they're also the only business segment that lost money last quarter.

Multiple companies, including TreeHouse Foods (THS) and Post Holdings (POST), are said to be bidding for the private-label business. Estimates suggest it could sell for $3.5 billion. That's a big drop from the $5 billion price tag CAG paid.

Shares of CAG saw a two-week correction from its early July highs but traders have started to buy the stock again and recently broke the short-term trend of lower highs. We suspect this activist-investor fueled rally in CAG has further to run. Often activist investors urge companies to break up to unlock shareholder value or push for a company to sell itself. We'll have to see what the next move is. Today's high was $44.51. We are suggesting a trigger to launch bullish positions at $45.25.

- Suggested Positions -

Long CAG stock @ $45.35

- (or for more adventurous traders, try this option) -

Long SEP $45 CALL (CAG150918C45) entry $1.35

08/10/15 triggered on gap higher at $45.35, suggested entry was $45.25
Option Format: symbol-year-month-day-call-strike

chart:


The Hartford Financial Services Group - HIG - close: 49.38 chg: +0.56

Stop Loss: 47.45
Target(s): To Be Determined
Current Gain/Loss: +2.1%
Entry on August 10 at $48.35
Listed on August 03, 2015
Time Frame: Exit PRIOR to September option expiration
Average Daily Volume = 3.0 million
New Positions: see below

Comments:
08/15/15: Speculation that HIG was a potential takeover target kept the rally going on Friday. Shares gained another +1.1% to set a new multi-year closing high.

I would not chase it here. We are moving our stop loss to $47.45.

Trade Description: August 3, 2015:
HIG had been hovering near multi-year highs from March through June this year. Then in July the stock began to accelerate higher. The catalyst was merger and acquisition news in its industry.

On July 1st ACE Limited (ACE) announced it would buy Chubb Corp. (CB) for $28.3 billion. This lit a fire under the property and casualty insurance stocks and HIG surged to new highs for the year.

If you're familiar with HIG they are in the financial sector. According to the company, "With more than 200 years of expertise, The Hartford (HIG) is a leader in property and casualty insurance, group benefits and mutual funds. The company is widely recognized for its service excellence, sustainability practices, trust and integrity."

The last couple of earnings reports for HIG have been mixed. They have been beating Wall Street's bottom line estimate but have missed the revenue numbers. Their most recent report was July 27th. Analysts were expecting a profit of $0.77 per share. HIG crushed the number with a profit of $0.91 per share. That is a +193% improvement from the $0.31 profit a year ago. Revenues were up +1.5% to $4.68 billion.

In addition to beating the estimate HIG raised its dividend and boosted its stock buyback program by an additional $1.6 billion. The current repurchase program stands at $2 billion through December 31, 2016.

Shares have garnered a couple of price target upgrades since its earnings report. The new targets are $53 and $55. There has been more chatter and speculation that HIG is a potential takeover target, which is probably why shares are outperforming its peers. The S&P SPDR Insurance ETF is up +7.8% year to date while HIG is up +15.6%.

Tonight we are suggesting small bullish positions if HIG can trade at $48.35 or higher.

*small positions to limit risk* - Suggested Positions -

Long HIG stock @ $48.35

- (or for more adventurous traders, try this option) -

Long SEP $50 CALL (HIG150918C50) entry $1.13

08/15/15 new stop @ 47.45
08/10/15 triggered @ 48.35
Option Format: symbol-year-month-day-call-strike

chart:


Total System Services, Inc. - TSS - close: 48.14 change: +0.67

Stop Loss: 45.85
Target(s): To Be Determined
Current Gain/Loss: +0.2%
Entry on August 14 at $48.05
Listed on August 12, 2015
Time Frame: Exit 6 to 9 weeks.
Average Daily Volume = 969 thousand
New Positions: see below

Comments:
08/15/15: Bingo! As expected shares of TSS have broken out from their recent trading range. The stock displayed relative strength on Friday with a +1.4% gain. Shares rallied past resistance and hit our suggested entry point at $48.05. I would consider new positions at this time.

Trade Description: August 12, 2015:
TSS is probably one of the best performing stocks in the S&P 500 this year. The S&P 500 index is up +1.3% year to date. The financial sector is up +1%. Yet TSS has surged +39% in 2015 and shares look poised to keep running.

TSS is in the financial sector. According to the company, "As one of the world's largest payment solutions and services companies, TSYS believes payments should revolve around people, not the other way around. Since we got our start in the payments space more than 30 years ago, we have evolved from a supporting role servicing several hundred bank card issuers and bank acquirers to directly touching hundreds of thousands of merchants and millions of consumers.

TSYS is a global, publicly traded company with operations in more than 80 countries, including many of the world’s most high-growth emerging markets. We provide electronic payment services to financial institutions and companies around the globe with a broad range of issuing and acquiring payment technologies, including consumer, credit, debit, healthcare, loyalty, prepaid, chip and mobile payments."

Earnings are supposed to be the main driver behind stock price appreciation. TSS has not disappointed. The company has beaten Wall Street's estimates on both the top and bottom line the last three quarters in a row. Revenues have grown +8.9%, +11.7%, and +15.1%, respectively over the last three quarters.

TSS' most recent earnings report was July 28th. They announced their Q2 results were $0.58 per share. This was a +29% improvement from a year ago and five cents above expectations. Management then raised their 2015 guidance.

Since this late July earnings report shares of TSS have been consolidating sideways in the $46-48 range and essentially ignoring the market's recent volatility. Shares displayed some relative strength today and we want to be ready to hop on board if TSS can breakout. Tonight we're listing a trigger to open bullish positions at $48.05.

- Suggested Positions -

Long TSS stock @ $48.05

- (or for more adventurous traders, try this option) -

Long NOV $50 CALL (TSS151120C50) entry $1.20

08/14/15 triggered @ $48.05
Option Format: symbol-year-month-day-call-strike

chart:


21Vianet Group, Inc. - VNET - close: 20.66 change: +0.41

Stop Loss: 19.80
Target(s): To Be Determined
Current Gain/Loss: -0.4%
Entry on July 23 at $20.75
Listed on July 22, 2015
Time Frame: Exit PRIOR to earnings on August 26th
Average Daily Volume = 996 thousand
New Positions: see below

Comments:
08/15/15: VNET also displayed relative strength on Friday. Shares gained +2.0% and look poised to challenge resistance at $21.00 soon. Please keep in mind that we only have about seven trading days left for this play. VNET is scheduled to report earnings on August 26th. We plan to exit before their announcement.

Tonight we will raise the stop loss to $19.80, just below technical support at its simple 100-dma.

Trade Description: July 22, 2015:
Buckle your seatbelt. We are adding a fast-moving Chinese Internet stock to the play list tonight. This trade is not for the faint of heart. The Chinese market has been very volatile in recent weeks. This has been exacerbated by merger and acquisition news.

VNET is in the technology sector. According to the company, "21Vianet Group, Inc. is a leading carrier-neutral internet data center services provider in China. 21Vianet provides hosting and related services, managed network services, cloud services, content delivery network services, last-mile wired broadband services and business VPN services, improving the reliability, security and speed of its customers' internet infrastructure. Customers may locate their servers and networking equipment in 21Vianet's data centers and connect to China's internet backbone through 21Vianet's extensive fiber optic network. In addition, 21Vianet's proprietary smart routing technology enables customers' data to be delivered across the internet in a faster and more reliable manner. 21Vianet operates in more than 30 cities throughout China, servicing a diversified and loyal base of more than 2,000 customers that span numerous industries ranging from internet companies to government entities and blue-chip enterprises to small- to mid-sized enterprises."

The Wall Street Journal recently noted in June that seven U.S.-listed Chinese companies had been approached with offers to go private. That's a big spike in buyout offers. From January through May this year there had only been five such offers. One of the companies recently approached is VNET.

On June 10th VNET was approached with a preliminary non-binding proposal by Kingsoft Corp. and Tsinghua Unigroup International to go private for $23.00 per American depositary share ("ADSs"). That's the stock we can trade on the NASDAQ. Naturally the stock surged on this announcement. On June 16th VNET announced they had formed a special committee to review this proposal.

Unfortunately for shares of VNET and most Chinese stocks the Shanghai market in China had peaked in mid June and began to crash. The next three weeks saw a -30% plunge in the Shanghai market. The sell-off really accelerated in the first week of July. We can see the impact this market plunge was having on VNET with the big declines in early July.

Shares of VNET produced a huge bounce on July 9th when they announced the company had hired financial advisors and legal counsel to help them review the proposal to go private. In their press release they warned investors that "no decision has been made" nor is there any assurance that any "definitive offer will be made". This warning didn't stop the rally in VNET's stock which has continued to rise.

The Chinese government has thrown billions of dollars at their market to stop the crash and it seems to be working. The fever seems to have broken and this should provide a less dangerous environment for shares of VNET to trade in. We suspect VNET will continue to rally as the M&A talk heats up. However, this is an aggressive, higher-risk trade. There is no guarantee of a deal. Shares of VNET are clearly very volatile. I suggest small positions to limit risk.

NOTE: VNET does have options but the spreads are too wide to trade them.

*small positions to limit risk* - Suggested Positions -

Long VNET stock @ $20.75

08/15/15 new stop @ 19.80
08/01/15 new stop @ 19.20
07/27/15 The Chinese Shanghai index plunged -8.48%
07/23/15 triggered @ $20.75

chart:




BEARISH Play Updates

GATX Corp. - GMT - close: 50.03 change: +0.22

Stop Loss: 50.65
Target(s): To Be Determined
Current Gain/Loss: -1.4%
Entry on August 12 at $49.35
Listed on August 11, 2015
Time Frame: Exit 4 to 6 weeks
Average Daily Volume = 334 thousand
New Positions: see below

Comments:
08/15/15: On Wednesday GMT dipped to new lows and bounced, producing a bullish reversal pattern. While shares have not seen much follow through higher we are taking a more defensive approach tonight. Lower the stop loss down to $50.65. No new positions at this time.

Trade Description: August 11, 2015:
Thus far 2015 has not been a good year for GMT stock. Shares are down -13% year to date and the stock looks poised to see its loss widen.

GMT is in the services sector. According to the company, "GATX Corporation (GMT) strives to be recognized as the finest railcar leasing company in the world by its customers, its shareholders, its employees and the communities where it operates. As the largest global railcar lessor, GATX has been providing quality railcars and services to its customers for more than 115 years. GATX has been headquartered in Chicago, Illinois, since its founding in 1898."

GMT started the year on a strong note with Q4 earnings results better than expected and revenues up +12.6%. Management raised their 2015 guidance following a healthy Q4 report. Unfortunately business has slowed down significantly in the last couple of quarters.

GMT's most recent report was July 23rd. The company delivered their Q2 results of $1.03 per share. That's a -10% drop from a year ago and 19 cents worse than expected. Revenues were down -0.14% to $365 million, which is significantly below Wall Street's estimate of $384 million. These results would have been even worse if GMT has not repurchased 727,000 shares last quarter.

The company claims they have strong demand for their rental fleet of rail cars. However, they're seeing new railcar orders slowing down. Their customers are delaying new orders due to the falling price of oil. Oil transport is a significant portion of their business.

According to the U.S. Energy Information Agency (EIA) 70% of U.S. production from the Bakken formation and 64% of Niobrara production is transported by rail. According to the American Association of Railroads, the U.S. rail system transported 11 times more crude oil in 2013 than all the oil moved by trains from 2005 to 2009 (source: CNBC). At the time that was about 815,000 barrels a day. It has most assuredly risen since then as U.S. production continued to climb through 2014 and into 2015.

Now that crude oil prices have crashed it has cut demand by producers to transport it. Technically shares of GMT are in a bear market. Investors have been selling the rallies for months. They just sold the oversold bounce a couple of weeks ago. Today GMT has closed below round-number support at $50.00 and is poised to hit new two-year lows.

The point & figure chart is forecasting a $45.00 target. I will point out that short interest is almost 15% of the 42.8 million share float. We should probably consider a slightly more aggressive trade due to some volatility. Tonight I am suggesting a trigger to open bearish positions at $49.35.

FYI: GMT has a $0.38 dividend coming up in September. The ex-dividend date should be in the September 11-15 time frame.

- Suggested Positions -

Short GMT stock @ $49.35

- (or for more adventurous traders, try this option) -

Long SEP $50 PUT (GMT150918P50) entry $2.45

08/15/15 new stop @ 50.65
08/12/15 Caution: GMT has produced a bullish engulfing candlestick reversal pattern.
08/12/15 triggered @ $49.35
Option Format: symbol-year-month-day-call-strike

chart:


Marathon Oil Corp. - MRO - close: 17.40 change: -0.62

Stop Loss: 19.55
Target(s): To Be Determined
Current Gain/Loss: +2.2%
Entry on August 14 at $17.80
Listed on August 13, 2015
Time Frame: Exit
Average Daily Volume = 7.8 million
New Positions: see below

Comments:
08/15/15: Our new bearish play on MRO is off to a good start. Crude oil sank to new six and a half year lows on Friday. This undermined the energy sector. MRO broke down under short-term support near $18.00 and hit our suggested entry point at $17.80.

Trade Description: August 13, 2015:
Falling crude oil prices are crushing oil-sector stocks. A -50% drop in crude oil that began in the second half of 2014 was horrendous for the U.S. and global oil industry. Oil managed a bounce off its March 2015 lows but that rebound has failed.

Since late June the price of oil has fallen about -30%. Today saw crude oil close near $42.00 a barrel, the lowest since March 2009 (during the bear market in stocks).

Shares of MRO are getting hammered on this oil slide. According to the company, MRO is a global energy company. They explore for, produce, and market oil and natural gas. They are also involved in the oil sands mining in Canada and the big shale oil and gas basins in the United States. The company has operations in Angola, Equatorial Guinea, Ethiopia, Gabon, Kenya, Libya, Norway, the United Kingdom, and the Kurdistan region of Iraq.

There are a ton of factors impacting crude oil and the energy sector. OPEC's largest producer, Saudi Arabia, has decided keep production high. They would rather suffer low oil prices than lose market share to rival producers.

According to CNBC today, "OPEC's second-largest producer, Iraq, plans to export near-record volumes of Basra crude in September, adding to an already oversupplied market." Plus, "The U.S. Energy Information Administration also said on Thursday that Iran's release of oil held in storage could boost global supplies by 100,000 barrels per day this year, and that it had the 'technical capability' to boost output by 600,000 bpd by the end of next year."

If that wasn't enough the recent focus on China is undermining oil prices. China is one of the largest, if not the largest, consumer of commodities on the planet. Their economy has been slowing down for years. The central bank of China's decision to devalue their currency this week stokes fears that China's economy is falling even faster than previously expected. That doesn't bode well for China's future oil demand.

Meanwhile back at home in the U.S. we see crude oil inventories building. Wall Street is worried that domestic oil companies have not cut their spending budgets enough. There is growing concern that MRO may have to slash its dividend. The plunge in MRO's stock price has boosted its dividend yield to more than 4%.

A quick look at MRO's last few earnings reports shows the trend in revenues. Their Q3 2014 results saw revenues fall -5%. Q4 results saw revenues drop -16% from the prior year. Their Q1 2015 report said revenues plunged -46%. Their most recent report, their Q2 report on August 5th, said MRO's revenues dropped -47.9% to $1.53 billion. The company reported a loss of ($0.23) per share. Management has been slashing their budgets and cutting expenses but it wasn't enough.

The last few days have seen MRO's stock hovering above short-term support at $18.00. Unfortunately today's drop (-5.45%) left shares poised for a breakdown. Tonight we are suggesting a trigger to launch bearish positions at $17.80. We're not setting a target tonight but I will point out that the point & figure chart is bearish and forecasting at $5.00 target.

FYI: MRO does have a 21-cent dividend coming up. The stock will trade ex-dividend in the August 17-19th time frame.

- Suggested Positions -

Short MRO stock @ $17.80

- (or for more adventurous traders, try this option) -

Long OCT $17 PUT (MRO151016P17) entry $1.03

08/14/15 triggered @ $17.80
Option Format: symbol-year-month-day-call-strike

chart:


Whiting Petroleum - WLL - close: 19.18 change: -0.01

Stop Loss: 20.35
Target(s): To Be Determined
Current Gain/Loss: +3.4%
Entry on August 03 at $19.85
Listed on August 01, 2015
Time Frame: Exit PRIOR to earnings
Average Daily Volume = 7.1 million
New Positions: see below

Comments:
08/15/15: Hmm... the early morning rally on Friday in WLL quickly failed. Yet there was no follow through selling either. Shares spent most of the day drifting sideways and closed virtually unchanged for the session.

Last week's bounce snapped a six-week trend of losses.

I am not suggesting new positions in WLL at this time.

Trade Description: August 1st, 2015:
The price of crude oil has fallen more than 50% in the last year. It's wreaking havoc on energy company earnings and revenues. Unfortunately the outlook is not very bullish. The global economy is stalling. China, the biggest buyer of commodities, is growing at multi-year lows. The U.S. is creeping along at +2% GDP growth while oil inventories in the U.S are near 80-year highs.

The Middle East OPEC cartel is pumping a high-volume of oil, regardless of price declines, to maintain market share. A recent report showed that OPEC boosted production by +140,000 barrels a day in July from its June production. OPEC is hoping to pressure the U.S. fracking industry out of business but it's not working. U.S. production remains resilient and near record highs.

If that wasn't enough the Federal Reserve is desperate to raise interest rates and would like to raise in September. Rising interest rates usually boost a country's currency. If the Fed does raise rates the U.S. dollar should rally even further. A rising dollar puts downward pressure on commodity prices. This paints a bearish picture for crude oil prices.

Given this outlook for crude we're adding a bearish play in the energy industry. Some view WLL as a barometer of the U.S. shale oil and gas industry. If that's the case the stock price is suggesting a dire forecast.

WLL is in the basic materials sector. According to the company, "Whiting Petroleum Corporation, a Delaware corporation, is an independent oil and gas company that explores for, develops, acquires and produces crude oil, natural gas and natural gas liquids primarily in the Rocky Mountain and Permian Basin regions of the United States. The Company’s largest projects are in the Bakken and Three Forks plays in North Dakota, the Niobrara play in northeast Colorado and its Enhanced Oil Recovery field in Texas."

WLL just reported its Q2 earnings on July 29th. Analysts were only expecting a profit of $0.02 per share. WLL delivered $0.04. However, that's a -97% drop from a year ago. Revenues plunged -29.4% to $590 million, which was significantly below analysts' estimates of $677 million.

We have to give the company credit for cutting costs dramatically during a tough time in the oil industry. Otherwise they would not have managed a profit for the quarter. WLL also managed to set a new company record for production of 170,000 barrels a day in the second quarter. Unfortunately, these positives are not enough to outweigh the overall bearish impact of plunging oil prices.

Plus, investors and analysts might shun WLL as the company is sending mixed messages. The company claimed that based on strong results during the second quarter they were raising their capex budget from $2 billion to $2.3 billion. That was two weeks ago. This past week WLL has already cut its capex budget. Now they're forecasting $2.15 billion. They only plan on running eight drilling rigs in the second half of 2015 instead of their previous guidance of 11 rigs.

Wall Street is turning more cautious on WLL. The stock has seen several downgrades and lowered price targets recently. The stock has been very weak. Momentum is bearish. The oversold bounce last week just failed under technical resistance at its simple 10-dma. Now WLL is testing round-number resistance at $20.00. We are suggesting a trigger to launch bearish positions at $19.85.

- Suggested Positions -

Short WLL stock @ $19.85

- (or for more adventurous traders, try this option) -

Long SEP $20 PUT (WLL150918P20) entry $2.05

08/05/15 new stop @ 20.35
08/05/15 new stop @ 21.25
08/03/15 triggered @ $19.85
Option Format: symbol-year-month-day-call-strike

chart:



CLOSED BULLISH PLAYS

Chicago Bridge & Iron Co. - CBI - close: 51.78 change: -0.09

Stop Loss: 50.85
Target(s): To Be Determined
Current Gain/Loss: Unopened
Entry on August -- at $---.--
Listed on August 10, 2015
Time Frame: Exit PRIOR to October option expiration
Average Daily Volume = 1.8 million
New Positions: see below

Comments:
08/15/15: CBI is not cooperating. Shares are still stuck in the $51.00-54.00 trading range. We are cutting it loose since CBI has not hit our entry trigger yet. Investors might want to keep CBI on their watch list for a couple of days and wait for a breakout past $54.00 as a potential bullish entry point.

Trade did not open.

08/15/15 removed from the newsletter, suggested entry was $54.05

chart: