Long Play Updates
E*Trade - ET - close: 23.58 change: +0.65 stop: 21.90
Our bullish play in ET has finally been opened. The stock gapped higher on Friday morning to open at $23.61, which was above our suggested entry point at $23.55. The move was sparked by the jobs report, which pushed bond yields (and interest rates lower) and that fueled a rise in financials and the broker stocks. The play is open and the move is bullish but if you read the market wrap this weekend our market bias is turning bearish. We're not suggesting new bullish positions in ET at this time although we may change our minds if ET can breakout past $24.00 and its simple 100-dma. Our target is the $25.90-26.00 range. Technical traders will note that ET's P&F chart is still bearish and will remain bearish for a while. FYI: More conservative traders may also want to consider a tighter stop loss near $22.35.
Picked on August 04 at $23.61 *gap higher*
Highland Hospitality - HIH - cls: 13.89 chg: +0.13 stop: 13.25
Update: As expected shares of HIH broke out higher. Reaction to the jobs report on Friday had HIH gapping open higher at $13.85, which happened to be our suggested trigger to go long. The play is now open but the trading on Friday looks like a short-term bearish reversal. We would expect a dip back towards $13.75 and probably towards $13.50. It's worth noting that Friday's rally did help produce a new MACD buy signal on the daily chart. Here's a copy of our new play description from Thursday:
A good number of the REITs and real-estate stocks are doing pretty well. Shares of HIH caught our eye as the stock looks poised to breakout from its month-long consolidation pattern. The MACD on the daily chart is nearing a new buy signal and short-term technicals are already turning positive. Aggressive traders may want to open positions right here. We want to see the breakout occur so we're suggesting a trigger to go long at $13.85. If triggered our target is the $14.90-15.00 range. Please note that the jobs report is due out Friday morning before the market open. More conservative traders may want to wait a while to see how the markets are responding to the news before considering new positions.
Picked on August 04 at $13.85
Short Play Updates
Juniper Networks - JNPR - cls: 13.13 chg: -0.07 stop: 14.01*new*
Another day, another decline for JNPR. The stock produced a failed rally at its simple 10-dma (again) and the $13.50 level on Friday. Yet volume was very low and the stock is so oversold that almost any bounce is going to produce a new MACD buy signal. Some of the weekly technical indicators are reaching oversold status too. JNPR is still a ways off from our target but more conservative traders may want to lock in some profits now. JNPR is down about 4.5% from our picked price. We're adjusting the stop loss to $14.01. We're not suggesting new shorts at this time. Our target for JNPR is the $12.00-10.00 range. Conservative traders can exit near $12 with us and more aggressive traders can aim lower. The P&F chart is still very bearish with an $8.50 target.
Picked on July 21 at $13.75
NCI Bldg - NCS - close: 49.90 chg: +2.27 stop: 50.15
NCS displayed a lot of relative strength on Friday. Shares broke out over minor resistance near $48.00 and its 10-dma and posted a 4.7% gain on strong volume. We cannot find any specific news or event to explain the surge higher. The rally did stall at resistance near the $50.00 level and its five-week trendline of lower highs. We're not suggesting new positions here and more conservative traders may want to inch their stops toward the $50 mark. If the major averages are bullish early next week we would expect to be stopped out at $50.15. We could definitely see NCS trading higher and stopping us out only to reverse course under resistance at its 50-dma or 200-dma near $52.00. Our target is the $42.50-40.00 range. We do not want to hold over the late August earnings report.
Picked on July 27 at $47.65
UAL Corp. - UAUA - close: 24.61 chg: -0.76 stop: 27.01
We found the action in the airlines interesting on Friday. In spite of another drop in crude oil and another day or positive traffic numbers for July coming from the industry the XAL index still reversed lower and closed with a 1.1% loss. Granted we're not complaining. It seems that investors may have focused on some bearish comments from British Airways, who said that the second half of 2006 could be challenging. The trading in UAUA saw the stock produce a failed rally under broken support and what should be new resistance at the $26.00 level. If you're looking for a new entry point for shorts this could be it although you may want to consider tightening your stop loss toward $26.65 or closer to $26. Our target is the $22.00-20.00 range.
Picked on August 01 at $25.70
Meridian Biosci. - VIVO - cls: 20.50 chg: -0.50 stop: 22.05
The rally in VIVO didn't get very far. Friday morning the stock reversed course under the $21.20 level, which was where the rally stalled on Thursday. Shares ended the session on Friday with a 2.3% loss after erasing all of Thursday's gains. The overall pattern remains bearish but traders may want to wait for a new declin e under $20.00 or last Tuesday's low near $19.78 before initiating new shorts. Our target is the $18.15-18.00 range since the $18.00 level was support last year. FYI: the P&F chart shows a triple-bottom breakdown sell signal with a $16 target.
Picked on July 23 at $20.94
Watson Wyatt Wld - WW - close: 32.42 chg: -0.03 stop: 33.51
WW didn't move much on Friday. Investors are waiting for the FOMC meeting on Tuesday before placing any new bets. The stock did end up bouncing near $31.90 for the second day in a row. The stock remains under its multi-week trend of lower highs but shares are looking pretty oversold. Almost any bounce from here will produce a new MACD buy signal on the daily chart. We're not suggesting new plays and more conservative traders may want to tighten their stops toward $33.00. The simple 200-dma has risen to $31.18 so we have adjusted our target to $31.50-31.00. We do not want to hold over the early August earnings report.
Picked on July 16 at $33.19
Closed Long Playss
Dollar Thrifty - DTG - cls: 44.82 chg: -1.01 stop: 44.90
We have been stopped out of DTG at $44.90. Friday's action, actually Thursday and Friday's action, is a good example of a whipsaw. The stock shot higher on Friday morning with the market's rally on the jobs number only to plunge lower and stop us out at $44.90. It is arguable that maybe our stop loss was too tight but the move on Friday was pretty bearish with a big reversal/failed rally pattern. Please note that our suggested trigger to go long was $46.26 but the stock gapped higher on Friday to open at $46.40 putting us at an even worse disadvantage.
Picked on August 04 at $46.40 *gap higher*
China Petro & Chem. - SNP - cls: 55.88 chg: -0.09 stop: 54.75
Oil stocks were flat to down on Friday as crude oil futures slipped about 90 cents to close under $75 a barrel. SNP, like most of the market, spiked higher on Friday morning only to see those gains evaporate. SNP does still have support near $55.00 and additional support at its 200-dma near $55.25 but we're choosing to exit early to cut our losses. FYI: The Point & Figure chart is forecasting a $67 target.
Picked on July 30 at $56.95
Closed Short Plays