Long Play Updates
Archstone - ASN - close: 49.89 chg: +0.17 stop: 47.75
We suspect that weakness in the broader markets is holding ASN back. If the major averages can catch a two or three-day rebound then ASN can probably breakout for good past resistance near $50.00. The problem is that the major indices look poised to head lower next week. We're going to suggest that readers wait for a move over $50.10 before going long (again) ASN but we would really hesitate to open new positions if the major averages are negative. Our target is the $53.85-54.00 range. The Point & Figure chart for ASN has produced a triple-top breakout buy signal with a $70.00 target. More conservative traders may want to use a tighter stop (maybe around $48.50).
Picked on June 05 at $50.21
Potlatch - PCH - close: 38.13 chg: +0.21 stop: 36.99
After the market's big intraday rebound from its lows on Thursday there was no follow through on Friday and that doesn't bode well for next week. Shares of PCH did out perform by posting a small gain but after looking more closely we would turn very cautious. The intraday chart shows a very short-term double-top pattern for PCH. We suspect that if the major averages turn lower on Monday that PCH will head back toward support near $37.20. We are not suggesting new bullish positions at this time. We are seriously considering just exiting this play early and more conservative traders should give it more thought.
Picked on June 04 at $39.39
Ryanair - RYAAY - close: 52.50 change: +1.16 stop: 49.95
Thursday's bullish breakout in RYAAY above resistance near $51.00, its 50-dma, 200-dma and exponential 200-dma was followed with a strong 2.2% gain on Friday. Volume on Friday's move came in more than double the daily average, which is bullish. The stock does not have a lot of short interest so we doubt Friday was fueled by a short squeeze, suggesting this was real buying. The rise past the $52.00 level has produced a new buy signal on RYAAY's Point & Figure chart, which now points to a $64.00 target. Our biggest concern is probably another market sell-off and/or the situation with Iran heating up. Right now the Dow Jones transportation index looks poised to head lower with a failed rally on Friday. The XAL airline index also shows a failed rally and poised to move lower. Meanwhile if Iran stays belligerent then crude oil will likely rise and that gives investors another reason to sell the airlines again. Should RYAAY dip the 200-dma (51.09) and the $51.00 level will probably act as the first level of support and readers can buy a dip or bounce near $51.00. We would not open new longs right here with our target in the $53.90-54.00 range.
Picked on June 08 at $51.34
UST Inc. - UST - close: 44.98 chg: +0.27 stop: 42.99
Tobacco stock UST continues to show relative strength. The stock added 0.6% on top of Thursday's bullish breakout. We do not see a lot of changes from our new play description from Thursday night. However, given the bearish market environment we suspect that UST will dip back to $44.50 and maybe the $44.00 region. Patient traders could get a better entry point waiting for a dip to either level. Technicals are bullish. The P&F chart points to $53.00. Our target is the $47.50-48.00 range. More conservative types may want to use a tighter stop near $43.50. We do not want to hold over the July earnings report.
Picked on June 08 at $44.71
Short Play Updates
Autodesk - ADSK - close: 34.45 change: +0.05 stop: 36.65
ADSK continues to look bearish in spite of Friday's gain. The stock rallied just high enough on Friday morning to fill the gap down from Thursday. Like many stocks ADSK produced a failed rally and a new lower high. We would still consider new shorts here. Should the market surprise with a rebound next week then look for the $36.00 level to act as the next form of overhead resistance. A failed rally near $36.00 can be used as a new entry point. Our exit strategy is to sell part of your position in the $32.60-32.50 range and the rest in the $30.75-30.50 range. The P&F chart currently points to a $26.00 target.
Picked on June 06 at $34.89
Drew Industry - DW - close: 29.64 chg: -0.39 stop: 30.75
Good news! The bounce in DW stalled at the $30.50 level under technical resistance at its simple and exponential 200-dma(s). The failed rally/bearish reversal has helped produce a new MACD sell signal. This looks like a new bearish entry point to short the stock. Our target is the $27.55-27.45 range. The Point & Figure chart points to a $19 target.
Picked on June 07 at $29.67
Blue Nile - NILE - close: 30.12 chg: +0.62 stop: 32.01
Hmm... on Thursday night it looked like the markets would bounce and NILE was trading under $30 and ready to hit new relative lows. Yet Friday provided the opposite. No market bounce and NILE added 2%. The action in NILE is easier to explain. Before the opening bell NILE was upgraded to a buy. The stock has a lot of short interest and the reaction was a gap higher to open at $31.25. That proved to be the high for the day. Overall we remain bearish on NILE, especially with the major averages under performing. Yet we'd wait for a new drop under $29.50 before considering new short positions. More conservative traders may want to see a new relative low under $29.27 before shorting. We do classify this as a high-risk, aggressive play because NILE has so much short interest and an increased risk for a short squeeze. Our target is the $25.50-25.00 range. The P&F chart points to a $15 target.
Picked on June 08 at $29.45
Closed Long Plays
Palm Inc. - PALM - close: 17.53 chg: -0.42 stop: 17.24
Danger! PALM was trending lower all day on Friday except for a very brief intraday spike to $18.45. PALM traded over $18.00 for less than a minute around 12:50 P.M. before falling back into its bearish slide lower. The bad news is that our trigger to go long the stock was at $18.26. Our play has been opened. Unfortunately, we expect the market to continue lower on Monday and odds are very good that we'll be stopped out of PALM at $17.24. We are not suggesting new plays and instead suggest that readers, if you were triggered on Friday, exit immediately to cut your losses.
Picked on June 09 at $18.26
SWS Group - SWS - close: 25.14 chg: -0.05 stop: 23.79
Abandon ship! SWS hit resistance near $26.00 and its 50-dma and rolled over. We warned readers this resistance was there and said that if SWS doesn't breakout past this level we'd probably exit early. That's exactly what we're doing. The lack of a rebound in the markets on Friday looks very bearish. Right now it looks like SWS is poised to trade back to $24.00-23.60 region. We would keep an eye on SWS for a breakout over the 50-dma or another bounce near $23.00.
Picked on June 08 at $25.19
Closed Short Plays