Long Play Updates
Archstone-Smith - ASN - close: 35.84 chg: -0.30 stop: 34.85
Hmmm.. shares of ASN displayed a relatively volatile session on Friday. The stock opened weak and sank toward the $35.40 level before sharply bouncing. The bounce turned into a rally that hit $36.37. Our entry point to go long was $36.26 so the play is now open. The problem is that ASN did not hold its gains and the stock was sliding lower into Friday afternoon. The whole session put an ugly little bearish hook on some of its technical oscillators. If you're not long this play we would suggest caution and probably avoid opening new positions until ASN trades a bit higher - say the $36.50 level. Readers who are long this stock can carefully watch the $35.30-35.40 level as possible support.
Picked on May 06 at $36.26
Brookfield Homes - BHS - close: 46.00 chg: -0.20 stop: 42.45
BHS is a relatively new play to the Premier Investor newsletter. We added the stock on Wednesday with a trigger to go long at $45.05 on a breakout above resistance at $45.00. The breakout occurred on Thursday with volume over three times the daily average, which is normally a very bullish sign. Friday's session looks like normal profit taking after a four-day rally. The stock should have support at the $45.00 level or if that fails then additional support should appear at the $44.00 level. We would look for a dip back toward $45.00 and use it as a new bullish entry point. The bullish P&F chart now points to a $62 target. Our target remains the $50.00 level.
Picked on May 05 at $45.05
First Bancorp - FBP - close: 40.68 chg: +0.31 stop: 37.00
FBP is a new play to the list from Thursday's newsletter. The stock displayed relative strength on Friday with a small gain compared to weakness in the banking indices. A reprint of the original play description from Thursday follows:
We like FBP because the stock is a great technical bounce play. The stock is extremely oversold with the first four months of 2005 completely erasing its 2004 gains. The stock has been declining in a very narrow channel but shares just recently broke out above resistance at its trendline of lower highs and at the $40.00 mark. We also notice that there has been a lot of volume over the last few days suggesting accumulation from large investors (like fund managers). We like the pull back toward $40.00 today and suggest using it as a bullish entry point. However, there is a chance that FBP could pull back even further toward the $39.00 or $38.50 region. Patient traders can wait for a possible dip but look for signs of a bounce before initiating positions. The P&F chart has already reversed from a sell signal into a new buy signal with a $58.00 target. Our six to eight week target is the $45.00 level.
Picked on May 05 at $40.37
Short Play Updates
Ball Corp - BLL - close: 39.18 chg: +0.20 stop: 41.01
BLL is another new play from the Thursday night newsletter. We see little change from our initial play description. A reprint follows:
Unlike most of the market shares of BLL were showing relative strength through the second half of January through early March. Yet all of that changed when BLL began to slide in late March through the first half of April. The stock broke down through support near $40.00 and technical support at its 200-dma's. The decline also broke down through BLL's nearly two-year up trend. Since then BLL's attempt at an oversold bounce failed near the $41.00 level and its 200-dma. This failed rally-bearish reversal suggests that the downside is not over yet for BLL. Looking at the Point & Figure chart we see that the stock has reversed into a sell signal pointing to a $31.00 target. Bears could also be attracted to BLL's bearish reversal today. The stock tried to push through its exponential 200-dma near $40.30 today but failed. Shares reversed course after this morning's strength and the stock lost more than two percent on heavy volume. We want to use today's reversal as a short-term bearish entry point. We suggest shorting BLL here with a target in the $35.00-34.00 range.
on May 05 at $38.98
Biomet - BMET - close: 38.39 chg: -0.19 stop: 39.51
Thus far we remain on the sidelines. We added BMET to the list as a short candidate because the stock's April bounce has stalled and shares are struggling under resistance near $39.00-39.50, which coincides with the top of its wide, descending channel. The MACD indicator appears to confirm this theory as it leans toward producing a new sell signal. The P&F chart is also bearish and currently points to a $32 target. We agree our target is the $33-32 range. We want to open shorts only after BMET has confirmed a failed rally near the top of its channel. Therefore we're suggesting a trigger at $37.45 as an entry point.
on May xx at $xx.xx <-- see TRIGGER
Boston Scientific - BSX - cls: 29.61 chg: +0.11 stop: 31.51
We added BSX to the list as a short candidate due to its relative weakness. The stock remains in its long-term down trend but short-term BSX has been churning sideways between $28 and $30. BSX produced yet another failed rally at the $30.00 mark on Friday. Readers can choose to enter new positions at current levels under the $30.00 mark but it might payoff to just wait for BSX to trade under the $29 level again before opening new plays. Currently the P&F chart is bearish with a quadruple-bottom breakdown sell signal pointing to a $22 target. We're only targeting a move into the $25-24 range. This may end up being a slow moving play that takes several weeks to reach our target.
Picked on April 19 at $29.05
Novellus - NVLS - close: 23.77 change: -0.13 stop: 25.01
NVLS displayed some relative weakness on Friday under performing the markets and the SOX semiconductor index. It looks like NVLS is producing a failed rally under its 21-dma that could be used as a new bearish entry point. However, we would probably suggest that readers wait for NVLS to trade back under the $23.50 level before considering new bearish positions. Traders here should also keep a close eye on the SOX index. The SOX is near its resistance trendline and while we like to see it trend lower a breakout in the SOX could put this NVLS play in jeopardy. Our target remains the $20.50-20.00 range.
Picked on April 29 at $23.40
Catalina Mktg - POS - close: 24.25 chg: +0.08 stop: 25.25
Friday's session was very listless in the markets and POS followed suit with a narrow range all session. The stock continues to look bearish with a multi-week trend of lower highs and a bearish P&F chart that points to a $14.00 target. The recent oversold bounce failed under the $25.00 level and its exponential 200-dma. We would suggest readers look for another drop under the $24.00 mark or even the $23.85 level before considering new bearish positions. Our target is the $21.25-21.00 range. Remember that we plan to exit before POS' May 18th earnings report, which is unfortunately an unconfirmed date.
Picked on April 22 at $23.80
Closed Long Plays
Closed Short Plays