Long Play Updates
Cymer Inc. - CYMI - close: 43.32 chg: -0.59 stop: 41.95
We were cautious in our weekend update and have been for the last few days. Our major concern is the SOX semiconductor index, which is inching closer and closer to a breakdown from its two-month rising channel. Shares of CYMI look poised to follow it lower. It doesn't help that the stock appears to have produced a bearish wedge pattern. Today's decline in CYMI has finally produced a new MACD sell signal on its daily chart. There is still a chance that the stock will bounce near $42.00 and its exponential 200-dma. We don't want to take that chance so we're suggesting an early exit immediately. We might turn bullish again down the road if we see a rally past $46.00
Picked on September 06 at $ 42.55
GlobalSantaFe - GSF - close: 47.74 change: -2.25 stop: 47.64
Crude oil futures and oil stocks experienced a sharp reversal on Monday. Oil futures slid about 3% and the OIX followed with a 1.1% decline while the OSX oil services index fell 2.5%. Shares of GSF under performed them all with a 4.5% loss. The group had looked promising with a bullish bounce from what looked like a short-term bottom. Today's weakness looks like a bearish reversal, especially in shares of GSF. Traders would be better off buying puts given today's action and targeting $45.00 or its trendline of lower lows. It was our plan to buy calls on a breakout higher with a trigger at $50.51. That trigger was not hit today so we're dropping GSF as a bullish candidate.
Picked on October xx at $ xx.xx <-- see TRIGGER
Oil Service HOLDRs - OIH - close: 126.15 chg: -3.70 stop: 124.99
Crude oil experienced a sharp reversal on Monday falling about 3%. The OIH oil service holders followed with a 2.8% decline. This looks like another failed rally under resistance. The path of least resistance now appears to be down and traders may have better luck betting on a dip towards $120. It was our strategy to buy calls on a breakout over $131 with a trigger at $131.05. OIH has not hit our trigger so we're dropping it as a candidate.
Picked on October xx at $ xx.xx <-- see TRIGGER
Monday proved to be a volatile day for HOV. Shares dipped toward support near $28.50 this morning before bouncing. The rebound was pretty strong (almost 4% from today's low) but HOV struggled to get past the $30 level again. Overall the move looks bullish given it is also a rebound near its trendline of higher lows. More aggressive traders may want to consider new positions here but we would wait for a new rise past the $30 level (and above Monday's high (30.03).
Picked on September 25 at $30.11
Intl. Game Tech. - IGT - close: 41.33 chg: -0.17 stop: 39.49
We do not see any changes from our weekend update on IGT. The stock is still poised to dip toward the $40 level, which should be support. Our target is the $44.00-45.00 range. We do not want to hold over the early November earnings report.
Picked on September 17 at $40.26
Short Play Updates
Commercial Metals - CMC - close: 20.11 chg: -0.11 stop: 20.76
CMC is stuck in a sideways trading range. The stock has been trading between $20.10 and $20.64 for the last four days. We suspect the breakout will be downward. The technical picture is mixed but the P&F chart is bearish with a $13 target. We are suggesting that readers wait for another decline under $19.90 or $19.70 before considering new short positions. We are going to adjust our stop loss to $20.76. More conservative traders may want to tighten theirs toward $20.65. Our target is the $17.50-17.00 range. We do not want to hold over the late October earnings report.
Picked on September 21 at $19.90
Hormel Foods - HRL - close: 36.03 chg: +0.05 stop: 36.51
Hmm... we think traders should think about exiting early with the HRL play. The stock isn't cooperating. Shares are seeing the sideways consolidation begin to coil more tightly and this type of pattern usually produced a breakout one way or the other. We would be worried that the long-term trend might prevail and that HRL would breakout higher. We are not suggesting new positions. Our target is the $35.30 mark.
Picked on August 31 at $36.65
Ladish - LDSH - close: 27.72 change: -1.16 stop: 30.01
The bearish trend reasserted itself on Monday and shares of LDSH lost just over 4%. The move today looks like another entry point however it's worth noting that LDSH had some news out after the closing bell tonight. The company announced it had signed a six-year contract with the boilermaker-blacksmith union. We did not see any after hours movement in the stock so we don't know yet how the market will interpret this news. We are aiming for the $25.50-25.00 range. The P&F chart is more pessimistic with an $18 target. We do not want to hold over the late October earnings report. More conservative traders may want to pass on this play or be extra cautious. We have two reasons for concern. First LDSH might have produced a (bullish) double-bottom pattern with the September lows. Second, the stock's short interest was last seen at 6.5% of the stock's 14 million-share float, which is a relatively high amount and increases the risk of a short squeeze.
Picked on September 25 at $29.65
Linear Tech. - LLTC - close: 31.28 chg: +0.16 stop: 32.41
We do not see any changes from our weekend update. The SOX semiconductor index is still inching lower toward a bearish breakdown from its rising channel. Shares of LLTC are still consolidating in a bearish fashion under the $32 level. Our target is the $30.10-30.00 range. More aggressive traders may want to aim lower since the P&F chart points to a $25 target. Our more aggressive target (if we had one) would be the July lows near $28. We do not want to hold over LLTC's earnings report due on Oct. 17th. FYI: The latest (August) data puts short interest at 4% of LLTC's 300 million-share float.
Picked on September 25 at $31.79
Closed Long Plays
ConocoPhillips - COP - close: 58.55 change: -0.98 stop: 57.93
Abort mission! The rebound in crude oil and the oil stocks was looking pretty bullish but today the group and the commodity experienced a bearish reversal. Unfortunately, COP managed to spike above resistance at the $60 level and hit our trigger at $60.15 before reversing lower. More aggressive traders might want to ride it out since COP might bounce near $58.00. We don't want to risk it. We're suggesting an early exit immediately, especially since today's session produced a bearish engulfing candlestick pattern.
Picked on October 02 at $60.15
S&P Select Energy SPDR - XLE - cls: 52.84 chg: -0.61 stop: 51.90
We are going to abandon ship with the XLE play too. The XLE energy SPDR produced a failed rally under resistance at $54.00 following the turnaround in crude oil today. It was our plan to go long XLE with a trigger at $54.11 but since the trigger has not yet been hit we're dropping it as a candidate. Keep an eye on this ETF for a bounce near the $50 level, which looks like significant support.
Picked on October xx at $xx.xx <--
WebEx Comm. - WEBX - close: 37.42 chg: -1.60 stop: 37.45
Ouch! Over the weekend we said that WEBX looks like it was headed lower but we didn't expect a 4.1% decline. The stock spiked lower at the open and quickly hit our stop loss at $37.45. There was an initial bounce but the rebound failed by early this afternoon. We couldn't find any specific news that might account for this weakness although it might be funds unwinding their window dressing from last month. Shares of WEBX now look poised to make their way toward the $36-35 range.
Picked on September 12 at $38.49
Closed Short Plays