Long Play Updates
CEC Entertainment - CEC - cls: 37.35 chg: -0.08 stop: 35.99
On Thursday we warned readers to expect a dip in shares of CEC. That's what the stock delivered. Shares fell to $36.59 before rebounding almost back into the green. This looks like a potential entry point for new bullish positions but we're not that confident in the major indices so consider new positions carefully. We will leave our stop loss at $35.99 for now. The 200-dma near $36.42 should act as short-term support. Our target is the $39.85-40.00 range.
Picked on February 1 at $37.61
Dominos Pizza - DPZ - close: 25.76 change: -0.09 stop: 24.45
We are starting to run out of time for this play with DPZ. The company is due to report earnings on the morning of Tuesday, February 21st. Since the market is closed on February 20th that means we need to exit near the closing bell on Friday the 17th. Yet the play has not even opened yet. Our plan is to catch a bullish breakout over resistance at the $26.00 level. We're suggesting that readers use a trigger at $26.16. to open positions. If DPZ does not hit our trigger by the close on Tuesday we'll drop DPZ as a candidate. If triggered we'll target a rally into the $27.85-28.00 range.
Picked on February xx at $xx.xx <-- see TRIGGER
Helen of Troy - HELE - close: 19.50 chg: +0.25 stop: 18.95
HELE is bouncing back toward the top of its three-week trading range near $19.60. The stock has been consolidating sideways between $19.00 and $19.60 since we began this play. The technical indicators are giving mixed signals and we are not suggesting new bullish positions at this time. The P&F chart, which tends to weed out the noise we might see on a daily chart is bullish and points to a $27 target but that could take a while to be reached. Our target is the 200-dma (21.07) but we're using the $21.00 level as our exit for now.
Picked on January 25 at $19.04
Knightsbridge Tankers - VLCCF - cls: 27.78 chg: +0.05 stop: 25.95*new*
Red alert! Our risk just changed drastically with VLCCF. We were under the impression that the company would not report earnings until February 28th. Unfortunately, another information source is now stating that VLCCF will report earnings on Monday morning, February 13th. We will be unable to avoid holding over the earnings report. In order to reduce our risk we're raising the stop loss to $25.95. Hopefully, VLCCF will mimic its peer NAT and rally on its earnings news. Analysts' estimates are for profits of $0.56 a share. The $27.00 level and the 50-dma near $26.50 should offer short-term support. Our target is the $29.95-30.00 range.
Picked on February 07 at $27.64
Short Play Updates
Amer. Home Mtg - AHM - close: 27.81 chg: -0.61 stop: 28.85*new*
AHM continues to consolidate with a bearish trend of lower highs and lower lows. The stock hit a new two-month low on Friday but failed to hold it. The weakness on Friday looks like a new entry point for shorts but we are suggesting caution. A look at the chart below and you'll see why. AHM is still holding on to short-term support. Plus, the technical indicators are throwing off mixed signals. We are going to inch our stop loss down to $28.85. Our target is the $25.25-25.00 range.
Picked on February 08 at $27.89
Ebay Inc. - EBAY - close: 39.53 change: -0.00 stop: 42.01
EBAY is a new play from the Thursday night newsletter. The stock did continue lower on Friday but the intraday rebound suggests the stock might continue to bounce higher. Watch for the simple 10-dma (now at 41.15) to act as overhead resistance. We are going to reprint our original play description from Thursday here:
Most of the major Internet companies have not been doing very well. EBAY ranks right up there with its compatriots. The stock reversed course after a failed rally at $48 after its earnings report in January. It is arguable that EBAY is looking a bit oversold and due for a bounce. However, we like today's failed rally and see it as a new entry point to short the stock. It looks more attractive if you consider that EBAY has broken down below nine-month old support (see chart). We are going to put our stop loss at $42.01 since $42.00 used to be old support. More conservative traders may want to put their stop loss above today's high (41.18) or above the 10-dma. Our initial target will be the $35.75-36.00 range. The P&F chart is bearish and points to a $32 target.
Picked on February 09 at $39.53
Flextronics - FLEX - close: 10.08 change: -0.08 stop: 10.55
The SOX semiconductor index was the weakest tech-related index on Friday with a 1.17% decline. Yet even with the decline the SOX bounced significantly from its lows of the session. Shares of FLEX followed suit with a decline early on that broke below the $10.00 mark but the stock rebounded to close unchanged on the day. The overall pattern remains bearish but we hesitate to open new positions here. FLEX could easily bounce back to the $10.35 or even $10.50 region and still keep its bearish trend in place. Look for the simple 10-dma near $10.27 to act as short-term resistance. Our target is the $9.05-9.00 range.
Picked on February 05 at $10.02
Liz Claiborne - LIZ - close: 34.16 change: +0.03 stop: 34.75
The good news here is that there has been no follow through on Wednesday's intraday rebound. LIZ continues to trade under a short-term trend of lower highs. We are not suggesting new short positions until LIZ trades back under $33.50. More conservative traders might try reducing their risk with a stop loss closer to $34.50. In the news on Friday it was reported that LIZ is one of multiple companies considered as candidate to buy out fashion designer Vera Wang, which is valued around $300 million.
Picked on February 07 at $33.45
Nat.Res.Ptnrs - NRP - cls: 51.60 chg: +0.34 stop: 53.01*new*
Uh-oh! Our time frame just changed with NRP. We have been working under the impression that NRP would not report earnings until February 20th or later. New data suggests that NRP will announce earnings on February 14th before the opening bell. That means we will need to exit on Monday afternoon near the closing bell to avoid holding over the report. We are adjusting our target to $50.25 and our stop loss to $53.01.
Picked on February 02 at $53.01
Oregon Steel - OS - close: 37.73 change: +0.74 stop: 40.01
Our new play in OS is not off to the best start but Friday's bounce may just prove to be the sort of failed rally entry point traders like to short. We would consider new shorts if OS trades under $37.50 again. More conservative traders might want to consider a tighter stop loss. We don't see any change from our original play description from Thursday night so we're reposting it here:
The upward momentum in the steel industry has stalled and many of the major players are reversing after a very solid run up in January. OS is one of them. The MACD, RSI and stochastics on the daily chart are all bearish and now some of the weekly indicators are turning south. We see today's failed rally as a new entry point to short the stock. Our target is going to be the simple 50-dma, currently at 32.76. However since the 50-dma is rising we'll use an exit range or target in the 33.50-32.75 zone. More conservative traders may want to consider putting their stop loss just above today's high (39.24). Please note that this is a slightly more aggressive play. The most recent data put short interest at 14.5% of the 35.5 million shares in the float. If you're not interested in trading OS then check out ATI, which is another steel stock offering a similar pattern and potential entry point for shorts.
Picked on February 09 at $36.99
Closed Long Plays
Closed Short Plays
Family Dollar Store - FDO - cls: 24.02 change: +0.41 stop: 24.51
We are not comfortable with the bounce in FDO on Friday. The stock began to take off late on Friday afternoon after clearing the $23.80 level. Volume really began to pick up late on Friday towards the close. We are choosing to exit early and keep our losses at a minimum.
Picked on February 06 at $23.45