Long Play Updates
Cameco - CCJ - close: 45.76 chg: -0.44 stop: 43.90
Some of the mining stocks hit some profit taking on Thursday-Friday this past week. CCJ was one of them. Shares have pulled back toward the bottom of its rising channel. Unfortunately, CCJ hasn't quite hit the bottom of this channel yet and we would still expect a dip toward the $45.00 level before any rebound higher. Our target remains the $49.50-50.00 range but keep in mind we plan to exit ahead of its late July earnings report.
Picked on June 27 at $44.14
Home Depot - HD - close: 41.61 chg: +0.57 stop: 38.75
It might seem like HD is getting away from us but we're not worried. We initially listed HD as a new bullish candidate this past week on the bullish breakout Tuesday above its eight-month trendline of resistance. However, we suggested that readers use a trigger to buy a dip in HD. Our suggestion is to go long the stock on a dip into the $40.85-40.50 range. Thus far HD hasn't dipped low enough to hit our trigger. Yet if we look at the major indices (DJIA, S&P 500, and the NASDAQ) we see they all look overbought and due for a pull back. We suspect that any significant dip in the major averages will bring HD down into our target range to consider bullish positions. If we are triggered our target is the $43.95-44.25 range before HD's mid-August earnings report.
Picked on July xx at $xx.xx <-- see TRIGGER
Short Play Updates
Par Pharma. - PRX - close: 29.89 chg: -0.07 stop: 32.01
PRX is a new bearish candidate we added to the newsletter on Thursday night. We do not see any changes to our strategy so we're reposting the original play description here. However, it is worth noting that PRX continued to decline on Friday but managed to bounce at $29.13 near its early May lows. We would not be surprised to see the stock rally back to $30.50 or even $31.00 before turning lower again.
The outlook for PRX looks pretty dim if you're scanning its daily chart. Shares are seriously under performing both the DRG drug index and the BTK biotech index. The stock has been declining for months after it peaked in December-January. Now after six to eight weeks of trying to breakout over the $33.00-33.50 region it looks like PRX is ready for its next leg down. Today's above-average volume decline below last month's low and round-number (psychological) support at the $30.00 mark looks like a new bearish entry point. Technically, as you might expect, PRX looks pretty bearish with oscillators pointing lower and its MACD in a new sell signal. There is potential support at the May low near $29 but we suspect PRX will break it. The Point & Figure chart is very bearish and points to a $20.00 target. Our plan is to see how far PRX can fall before its July 28th earnings report (unconfirmed date). For now we'll set our target in the $27.00-26.50 range.
Picked on July 14 at $29.96
Sina.com - SINA - close: 27.11 change: -0.14 stop: 29.01
We don't have any complaints with SINA. The stock has continued to under perform a market that is hitting new relative highs. The failed rally in SINA under its 50-dma early last week helped relieve the stock's short-term oversold condition. Now SINA looks poised for another decline. The P&F chart is very bearish and points to a $2.00 target. We're only targeting the April lows. Our target is the $25.75-25.50 range. The biggest risk to shorts right now is an unexpected earnings blow out from Yahoo (YHOO) on July 19th, which might ignite a rally in the Internet sector.
Picked on June 30 at $27.90
Closed Long Plays
Deckers Outdoor - DECK - cls: 25.60 chg: -0.17 stop: 24.95
We are choosing to close this play early. On Friday DECK announced that it would report earnings on Thursday, July 21st. There are too many unknown variables that can reap havoc on a position by holding over an earnings report. We are choosing to close the play early and look elsewhere.
Picked on June 22 at $25.88
Diodes Inc. - DIOD - close: 33.36 change: -1.14 stop: 31.49
We are going to suggest an early exit in DIOD too. The stock seriously under performed its peers on Friday. The SOX lost 0.06%, the NASDAQ gained ground, but DIOD lost 3.3 percent on no news. The drop back below the $34.00 level, which should have been support is a warning sign. It is true that DIOD should have stronger support at its rising 50-dma. However, with the SOX semiconductor index looking this overbought and extended we don't want to risk holding on to a chip stock that's suddenly showing weakness.
Picked on July 05 at $32.48
Nextel Comm. - NXTL - close: 33.02 change: -0.07 stop: 31.49
We are choosing to exit the NXTL play early. The stock has not performed as we expected and the company is due to report earnings this coming Thursday. We do not want to hold over the earnings report. We'd rather exit early and look elsewhere.
Picked on July 13 at $33.10
Closed Short Plays
Titanium Metals - TIE - close: 53.99 chg: -3.76 stop: 62.51
Target achieved. Wow! That did not take very long. Looks like everyone had the same idea on TIE. The stock gapped down to open at $55.50 and then dropped to $51.14 before bouncing. Volume on Friday was a huge 1.1 million shares versus the average of just 202 thousand shares a day. The bounce did struggle Friday afternoon under the $55.00 level. We do have to adjust our entry point. We listed it at $57.75 on Thursday night but the gap down on Friday forces us to put the entry at $55.50. Our target range was the $52.50-50.00 range so we're closing the play.
Picked on July 14 at $57.75