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Long Play Updates

Forest Labs - FRX - close: 44.24 chg: -0.60 stop: 42.49*new*

Biotech stocks did not participate much in Friday's rally. FRX failed to participate at all and actually displayed relative weakness with a decline toward the bottom of its three-week trading range. The relative weakness has us feeling cautious and the technical picture for FRX is suddenly looking a lot weaker. We would not suggest new plays until FRX trades back over $45.00 or even $45.20. In the meantime we are raising the stop loss to $42.49. More conservative traders may want to put their stop closer to $43.00.

Picked on September 14 at $45.11
Change since picked: - 0.87
Earnings Date 10/17/05 (unconfirmed)
Average Daily Volume: 1.7 million

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Idex Corp - IEX - close: 44.62 change: -0.21 stop: 41.99

We do not have much new to report on for IEX. We suggested longs on the bullish breakout over resistance at $44.00, which was also the top of its five-week trading range. Thursday's intraday dip looked like a new bullish entry point. The long-term trend remains bullish. If IEX dips again the $44 level should act as support and bounces from $44 can be used as new entry points. Our target is the $47.50-48.00 range.

Picked on September 11 at $44.43
Change since picked: + 0.19
Earnings Date 10/20/05 (unconfirmed)
Average Daily Volume: 232 thousand

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Rowan Cos - RDC - close: 36.53 chg: +0.10 stop: 34.95

RDC continues to inch higher. Shares recently broke through short-term resistance after testing support at its trendline of higher lows. Wall Street is bullish on RDC since the company stands to benefit from higher demand and rates for its services as the oil industry tries to rebuild in the Gulf of Mexico following hurricane Katrina. We would suggest new longs anywhere above $36.00. Our target is the $39.50-40.00 range.

Picked on September 14 at $36.31
Change since picked: + 0.22
Earnings Date 11/01/05 (unconfirmed)
Average Daily Volume: 2.1 million

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Radian Group - RDN - close: 52.75 chg: +0.64 stop: 49.99

Shares of RDN continue to show relative strength. On Friday the stock pushed to another new two-week high and its MACD indicator produced a new buy signal. More conservative traders may want to consider tightening their stops toward the 50-dma near 51.20. We are targeting a move into the $54.00-54.25 range.

Picked on September 07 at $51.10
Change since picked: + 1.65
Earnings Date 10/19/05 (unconfirmed)
Average Daily Volume: 518 thousand

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Ryerson Tull - RT - close: 21.32 change: +0.12 stop: 19.49

Shares of RT are still stuck in their narrow trading range between $21.00 and $21.50. We continue to have a bullish bias on the stock but we would not suggest new entries here. Instead wait for another pull back toward the $20.50 level and buy a bounce there (be sure to wait for the bounce). Our target is the $23.50 level.

Picked on August 31 at $20.54
Change since picked: + 0.88
Earnings Date 07/28/05 (confirmed)
Average Daily Volume: 486 thousand
 

Short Play Updates

Anheuser Busch - BUD - cls: 45.20 chg: +0.15 stop: 46.25

We are still playing BUD as a bearish candidate off its longer-term trends. BUD has been slowly bleeding lower in a descending channel for the last 18 months. Currently the stock should find resistance at its simple 100-dma just south of the $46.00 mark. We initially planned to target a decline toward $40.00 by BUD's late October earnings but shares are moving even slower than we expected. We are not suggesting new plays at this time but readers can watch for a couple of various entry points. Aggressive traders can short a failed rally under $46.00. More conservative traders can wait for another decline under $44.00.

Picked on July 28 at $44.77
Change since picked: + 0.43
Earnings Date 10/26/05 (confirmed)
Average Daily Volume: 2.3 million

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Intl Game Tech. - IGT - cls: 27.40 chg: +0.19 stop: 28.01

On Thursday we said that if IGT breaks out over its simple 50-dma we would plan to close this play early. On Friday the stock did trade above the 50-dma but it couldn't hold it. This could be another failed rally so we're going to give IGT another day to see what happens. If IGT closes over $27.50 we're exiting early. More conservative traders may want to tighten their stops. We are not suggesting new plays here.

Picked on July 21 at $27.21
Change since picked: + 0.19
Earnings Date 07/21/05 (confirmed)
Average Daily Volume: 2.3 million

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Nautilus Inc. - NLS - close: 23.84 chg: +0.44 stop: 26.10

On Wednesday this past week shares of NLS broke down sharply through major support near $25.00, its 200-dma and through the bottom of its two-year rising channel. The follow through on Thursday was met with a sharp bounce. We suspect that NLS will continue to produce an oversold bounce until it retests broken support near $25.00 as new overhead resistance. Readers can watch and wait for a failed rally under $25.00 as a new bearish entry point. Our target is the $20.50-20.00 range before its late October earnings report.

Picked on September 14 at $23.80
Change since picked: + 0.04
Earnings Date 10/25/05 (unconfirmed)
Average Daily Volume: 363 thousand

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Wal-Mart - WMT - close: 43.87 change: -0.45 stop: 46.05*new*

WMT saw a massive surge of volume at the end of the day on Friday as funds dumped shares to realign with the S&P rebalancing. The stock broke down under the $44.00 level and its MACD indicator has produced a new sell signal. The overall pattern looks pretty dismal for WMT but short-term we're beginning to believe that the stock is oversold and due for another bounce. We would not suggest new positions at this time. We are going to lower the stop loss to $46.05. We are adjusting our target to the $42.50 level.

Picked on August 24 at $45.95
Change since picked: - 2.08
Earnings Date 08/16/05 (confirmed)
Average Daily Volume: 10.2 million

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YUM Brands - YUM - close: 50.58 change: +0.59 stop: 51.01

We think the market rally helped fuel the bounce in shares of YUM and that the rally lacks conviction. That's why YUM is still trading under its six-week trendline of lower highs. Of course we chose to play with a relatively tight stop so that if we're wrong we're taking out of the play quickly. Our plan was to try and scalp a couple of points as YUM fills the gap from September 7th. At this time we would not suggest new plays. Readers may want to consider new positions if YUM trades under $50.00 again or wait for a new decline under the 200-dma (49.43). Our target is the $48 level.

Picked on September 13 at $49.98
Change since picked: + 0.60
Earnings Date 10/12/05 (unconfirmed)
Average Daily Volume: 1.2 million
 

Closed Long Plays

None
 

Closed Short Plays

Fincl. Sel. SPDR - XLF - close: 29.95 chg: +0.42 stop: 30.01

We are going to exit early on the XLF. Friday's session witnessed a very strong bullish reversal in the financial sector. The BIX and BKX banking indices broke out over significant resistance. While the XLF has not yet broken through resistance at the $30.00 level we are not going to wait around to find out.

Picked on September 13 at $29.71
Change since picked: + 0.24
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume: 5.8 million
 

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