Long Play Updates
ANSYS Inc. - ANSS - close: 42.33 change: +0.55 stop: 40.89
Is ANSS going to make it this time? The stock has been bouncing around in its $40.75-44.00 trading range for over a month now. Currently shares are bouncing off the bottom of this range and Friday's volume came in way above the average. We suggested on Thursday that aggressive traders might want to scalp a couple of points. Our strategy is based on catching a breakout over resistance at $44.00 with a trigger to go long the stock at $44.05. If triggered we'll target a move into the $49-50 range by the end of January.
Picked on December xx at $xx.xx <-- see TRIGGER
Anglogold - AU - close: 47.43 change: +0.76 stop: 43.95 *new*
Gold stocks continue to rebound even though the commodity has not begun to recover yet from last week's sell-off. The XAU gold & silver index added 1.25% on Friday and AU out performed its peers with a 1.6% gain. We remain hesitant about launching new longs in AU with the commodity showing no signs of a bounce yet from the recent profit taking. Our target is the $49.50-50.00 range. We are going to raise our stop loss to $43.95.
Picked on December 06 at $44.81
Burlington Coat - BCF - close: 40.50 chg: -0.03 stop: 39.90
We have little to report on with BCF. The retailers seemed to stall on Friday after new concerns rose that the holiday sales season was just so-so. Shares of BCF are still consolidating above round-number support at the $40.00 level but the upward momentum has definitely disappeared. If there is a Santa Claus rally, which usually shows up in the last week of December, then maybe BCF can revive itself. As it stands now we're not suggesting new positions and more conservative traders may just want to exit early. Our year-end target is the $43.50 level.
Picked on October 24 at $38.90
CenturyTel Inc. - CTL - close: 33.76 change: -0.13 stop: 32.39
CTL continued to consolidated lower on Friday but managed an intraday bounce from the $33.50 level and its 200-dma. This bounce from support looks like a new bullish entry point. However, the major averages still look vulnerable to more selling and we'd rather not initiate new positions with the market showing weakness. You, the reader, can decide to buy a bounce from $33.50 or look for a new move over $34.00 and initiate longs there. Our target is the $36.00 level. The P&F chart for CTL points to a $49 target.
Picked on December 12 at $33.55
D.R.Horton - DHI - close: 37.81 chg: +0.27 stop: 34.75 *new*
Homebuilder KB Homes (KBH) reported earnings on Thursday night and blew away the estimates. The company also issued relatively positive comments about 2006. Yet this event failed to energize the homebuilding stocks on Friday. The group churned sideways waiting for options expiration to end. Then again maybe investors were waiting for Monday's housing starts and building permits data. DHI turned in a solid performance this week and we're surprised there hasn't been more profit taking. Overall the pattern looks bullish with the recent bull flag breakout. We are not suggesting new long positions at this time. Our target for DHI is the $39.75-40.00 range. We are raising the stop loss to $34.75.
Picked on November 21 at $35.85
Duke Energy - DUK - close: 27.28 change: -0.12 stop: 25.99
The utility stocks were the only green spot in the energy sector on Friday. Yet DUK failed to close in the green. News that an ice storm left almost 700,000 without power (from DUK) in the Carolina states may have undermined any buying interest in the stock. Elsewhere DUK and CIN filed a proposal to get approval for their planned merger in Ohio. Technically the action on Friday for DUK is bearish. The stock produced a failed rally under the 100-dma and this turned into a bearish engulfing candlestick pattern. Traders should prepare for some consolidation probably into the $27.00-26.50 range. We would not suggest new longs at this time. Our end of January target is the $27.95-28.00 range but we may have to adjust our target as DUK nears the six-month trendline of resistance (see chart below).
Picked on December 13 at $26.89
Forest Oil - FST - close: 46.32 change: -1.68 stop: 44.49
Oil stocks were hit hard with profit taking on Friday. A new forecast for warmer weather this winter sent crude oil prices down more than 3% making the commodity's recent bullish breakout look like a bull trap pattern. Shares of FST were hit equally hard down 3.5%. The selling stalled near the 100-dma around the $46 level. This looks like short-term support but we hesitate to buy the dip. Wait for a bounce from here or potentially the $45 level before considering new long positions. More conservative traders may actually want to exit early right here to avoid further losses. The weekly chart has produced a new bearish engulfing candlestick pattern, which is typically seen as a bearish reversal. Our target is the $52.50-53.00 range. We do not want to hold over FST's February earnings report.
Picked on December 02 at $47.01
Corning Inc. - GLW - close: 20.99 chg: -0.12 stop: 20.45
Heads up! GLW is looking more and more vulnerable to profit taking. Volume has been rising and its upward momentum has stalled. More conservative traders may just want to exit right here! We are not suggesting new longs. Our target is the $21.90-22.00 range.
Picked on November 13 at $20.11
K-Swiss - KSWS - close: 33.83 chg: +0.48 stop: 31.99 *new*
KSWS produced some relative strength on Friday. The stock added 1.4% on above average volume to close at a new three-month high. This looks bullish but we wouldn't get our hopes up. The stock has consistently churned higher in a narrow range for weeks so the next move should be down toward the bottom of its rising channel. As long as you monitor your stops the play should work out well. We are raising our stop loss to $31.99. Our target is the $34.85-35.00 range.
Picked on November 29 at $32.09
Levitt - LEV - close: 22.88 chg: -0.12 stop: 20.95
The technical picture on LEV is starting to deteriorate, especially on the daily chart. The stock is struggling to break through resistance at its 100-dma. Odds are growing that it will consolidate back toward the $22.00 level. We would not suggest new positions at this time. Our target is the $24.90-25.00 range. We do not want to hold over the February earnings report.
Picked on December 01 at $22.27
Nautilus - NLS - close: 19.93 change: +0.10 stop: 17.89
NLS displayed some relative strength on Friday. After a bullish week we're surprised there wasn't more profit taking but then the market makers probably did their best to keep NLS close to the $20.00 strike price. Overall it does look like NLS has bottomed and its P&F chart points to a $24 target. Our biggest concern now would be the potential for tax loss selling between now and year's end. We would not suggest new positions here. Our target is the $21.50 level. We will not hold over the February earnings report.
Picked on December 11 at $18.81
VCA Antech - WOOF - close: 27.74 chg: +0.07 stop: 26.74
WOOF continues to churn sideways. The stock has certainly lost its upward momentum but neither is it seeing much selling pressure. We are not suggesting new long positions here. We will plan to exit ahead of the late January earnings report. Our target is the $29.90-30.00 range.
Picked on November 09 at $26.74
Short Play Updates
New River Pharma. - NRPH - close: 49.21 chg: +0.23 stop: 50.01
Nothing much has changed for NRPH. We do see mixed technical signals. The upward trend has been broken and its weekly chart shows a new MACD sell signal. Yet on the daily chart NRPH still has strong support at the 100-dma and its MACD is nearing a new buy signal. The P&F chart, which normally eliminates a lot of the noise, shows a sell signal pointing to a $39 target. Thus far we remain on the sidelines. Our trigger to short the stock is at $45.45. If triggered we'll target a drop to the $40.00 level. Currently the P&F chart points to a $39 target, which more closely coincides with the H&S pattern target.
Picked on December xx at $xx.xx <-- see TRIGGER
NeuroMetrix - NURO - close: 31.68 chg: +0.57 stop: 34.01
NURO turned in a strong session on Friday adding 1.8% yet the rally couldn't push past short-term resistance at the $32.00 level and its 21-dma. This is an important test. A failed rally here and we could get another entry point to short it. The stock is certainly giving mixed signals. Short-term technicals have turned bullish again but weekly chart shows a sell signal. The P&F chart also shows a sell signal with a $20 target. Plus, the daily chart shows a broken bullish trend and a double-top pattern. NURO may have to retest broken support at the 50-dma as new resistance before it turns lower. Furthermore we now have to deal with the quarter-end phenomenon of window dressing and NURO is probably a good target given its YTD performance. We are not suggesting new shorts at the moment.
Picked on December 06 at $29.59
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