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Tech Stocks (TS) SHORT play Updates

Software Sinks

Our bearish software play has broken support and its 100-dma.

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Bearish Play Updates
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Synopsys - SNPS - close: 16.99 change: -0.15 stop: 17.90

Continued weakness in the NASDAQ and the GSO software index helped push shares of SNPS lower on Friday. The stock broke support at the $17.00 mark and its simple 100-dma to hit a low of $16.81. Our trigger to go short was at $16.95 thus opening the play. As expected the drop under the $17.00 mark has produced a new point and figure chart sell signal that now points to a $14.00 target. Remember that we're only targeting a decline toward support in the $15.50 region.

Annotated chart:

Picked on January 21 at $16.95
Gain since picked: + 0.04
Earnings Date 02/17/05 (confirmed)
Average Daily Volume: 1.5 million

Active Trader (AT) LONG play Updates

Coal, Aerospace and Natural Gas

Our non-tech bullish candidates have been narrowed to more defensive candidates given the pull back in the market.

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Bullish Play Updates
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Arch Coal - ACI - close: 34.52 change: +0.11 stop: 32.49

Coal producer ACI continues to churn sideways between resistance at the $36.00 mark and slowly rising support at its 200-dma near $33.00. While the stock's long-term trend remains bullish and its P&F chart points to a $40.00 target we are growing weary of ACI's slow progress. We'll give the stock another week to see if shares can mount a breakout over the $36 mark. Otherwise we'll close the play for lack of performance. The latest data suggests that ACI is due to report earnings on February 8th not January 29th as previously thought.

Annotated Chart:

Picked on December 13 at $34.71
Gain since picked: - 0.19
Earnings Date 02/08/05 (unconfirmed)
Average Daily Volume: 951 thousand
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Boeing - BA - close: 50.07 change: -0.83 stop: 49.95

Exit alert! New comments out from Boeing's defense operations management said that defense cuts coming from the Pentagon are expected to hit all large weapon makers including BA. This news came out on Friday and sent the stock to a 1.6 percent decline. Shares managed to stall the descent near round-number support at the $50.00 mark but it doesn't look good. The MACD indicator has rolled over and the short-term oscillators also look bearish. Our stop loss is only 12 cents from here so we opted to hold the play on the small chance of a bounce this Monday. In reality we expected to be stopped out for a 3.6 percent loss. Aggressive traders may actually want to switch sides and consider short plays on a break below the 200-dma's near $49.00.

Annotated chart:

Picked on January 12 at $51.94
Gain since picked: - 1.87
Earnings Date 02/02/05 (confirmed)
Average Daily Volume: 3.2 million
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El Paso Corp - EP - close: 10.89 change: +0.14 stop: 9.99

We have good news for energy traders. Shares of EP, the largest natural gas company in the U.S., have continued to out perform the market this past week. Traders bought the dip toward its simple 10-dma on Thursday and the stock is now poised to challenge what could be resistance at the $11.00 mark. The rising trend in EP appears to be based on EP's continuing debt reduction and growing expectations for stronger demand for natural gas in 2005 and beyond. Please note that we are changing the earnings date. There appears to be some confusion over when EP's next earnings report will be but most sources point to its Q4 report in March, not January 29th as previously expected.

Annotated Chart:

Picked on January 13 at $10.61
Gain since picked: + 0.28
Earnings Date 03/20/05 (unconfirmed)
Average Daily Volume: 3.9 million
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Raytheon Co - RTN - close: 36.76 change: -0.14 stop: 36.25

RTN remains stuck in its sideways trading range between $37.50 and $36.35. If you're feeling optimistic one could say RTN is displaying relative strength considering it failed to turn lower with the rest of the market. Yet positive comments from Bear Stearns on Thursday were not enough to spark any sort of rally in the stock. Currently we remain cautious. The overall market environment is bearish and RTN is likely to test the bottom of its trading range again soon. Readers may be better off waiting for RTN to breakout over the $37.50 level before initiating new bullish positions.

Annotated chart:

Picked on January 12 at $37.25
Gain since picked: - 0.49
Earnings Date 02/03/05 (confirmed)
Average Daily Volume: 1.7 million

Active Trader (AT) SHORT play Updates

Untriggered

Our bearish media play has shown a surprising lack of weakness the last couple of sessions and we remain untriggered.

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Bearish Play Updates
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Emmis Corp - EMMS - close: 17.60 change: +0.10 stop: 17.85

The outlook for EMMS remains bearish. The breakdown under the $18 level and its bearish P&F chart with its $6.00 target are enough to inspire shorts to consider EMMS. Yet the stock has shown surprising strength this past week by not trading lower. Fortunately, we remain untriggered in this play as we wait for EMMS to breakdown under the $17.00 level and hit our entry point at $16.99. More aggressive players may want to watch for a failed rally under $18.00 as an alternative entry point instead.

Annotated chart:

Picked on January xx at $xx.xx <-- see TRIGGER
Gain since picked: + 0.00
Earnings Date 01/06/05 (confirmed)
Average Daily Volume: 478 thousand

Active Trader (AT) CLOSED LONG play

Earnings are approaching

It's our policy to avoid holding over an earnings report and this play ran out of time.

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Closed Bullish Plays
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Bemis Co - BMS - close: 28.80 change: -0.21 stop: 27.99

The general up trend in BMS remains intact and its P&F chart continues to point to a $45 target but we're going to call it quits. The overall market environment has turned sour and with BMS' earnings report due out on Wednesday, January 26th we're choosing to close this play early.

Picked on December 22 at $29.22
Gain since picked: - 0.42
Earnings Date 01/26/05 (confirmed)
Average Daily Volume: 411 thousand

 

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