Long Play Updates
BJ Services - BJS - close: 29.85 change: -0.74 stop: 28.99
Strength fueled by the OPEC production cut news on Thursday just vanished on Friday. Crude oil plunged to a new relative low and energy stocks followed lower. The OIX oil index lost 0.5% while the more volatile OSX oil services index slipped 1.9%. Shares of BJS, an oil service stock, lost more than 2.4% and reversed Thursday's mini bullish breakout. We would definitely be cautious here but more aggressive traders might want to try and buy a dip in the $29.50-29.65 region. More conservative traders can wait for another rally past the $30.55 level before initiating plays. Our target is the $33.50-34.00 range. Be advised that the $32.00 level and the 50-dma (near $32) might offer some overhead resistance. We do not want to hold over the October 31st earnings report.
Picked on October 19 at $30.55
D.R.Horton - DHI - close: 23.48 change: +0.24 stop: 22.99
We are still in a wait and see mode with DHI. Homebuilders have continued to drift lower in spite of some positive comments on the sector this past week. Shares of DHI are sliding toward what looks like support near the $23.00 level. Aggressive traders might want to consider buying a bounce from the $23 region. We are suggesting that readers wait for a move past $25.50 with our trigger to open long positions at $25.51. If triggered at $25.51 our target is the $29.00-30.00 range although more conservative traders may want to exit at the 200-dma.
Picked on October
xx at $xx.xx <-- see TRIGGER
Denbury Resources - DNR - cls: 28.92 chg: -0.92 stop: 27.99
DNR is another oil stock that suffered some profit taking on Friday. Shares actually under performed most of its peers with a 3% decline. Volume came in above average on the decline, which is worrisome. It looks like DNR is poised to continue lower and dip toward the $28.25-28.00 region. We would wait for a bounce before considering new bullish positions. Our target is the $33.00-34.00 range. We do not want to hold over the early November earnings report.
Picked on October 16 at $30.26
Kinetic Concepts - KCI - cls: 33.63 chg: -0.22 stop: 31.89*new*
The news for KCI on Friday was a new CEO but the headlines failed to have any impact on the stock price. Shares of KCI churned sideways in a 50-cent range for most of the session. The trend is still up but we're not suggesting new positions at this time. KCI is due to report earnings on Friday, October 27th. We're planning to exit on Thursday afternoon at the closing bell to avoid the earnings announcement. Our target is the $36.00-37.00 range. We're concerned the 100-dma near $36 might be overhead resistance.
Picked on October 08 at $33.35
Entry point alert! PDLI showed some relative strength on Friday and broke out through the top of its recent trading range. Traders bought the dip near $20 again and PDLI climbed higher for the rest of the day. We would suggest new bullish positions here but bear in mind that we have less than two full weeks before we need to exit ahead of the company's earnings report. We are raising our stop loss to $19.94. Our target is the $22.25-22.50 range.
Picked on October 05 at $20.11
W&T Offshore - WTI - close: 32.32 chg: -0.65 stop: 30.21
Thursday's strength in oil stocks withered away on Friday with crude oil futures falling to a new relative low. Shares of WTI, which were already challenging resistance near $33 and its exponential 200-dma, experienced some profit taking on Friday. We're not suggesting new positions at this time although a bounce from the rising 10-dma might be used as a new entry point. More conservative traders may want to exit near $33.00. Our target is the $34.00-35.00 range.
Picked on October 13 at $30.21
Olympic Steel - ZEUS - close: 26.40 change: -1.05 stop: 25.95
Danger! Thursday's bounce from support near $26 looked like a new entry point to go long. Unfortunately, there was no follow through higher on Friday. Instead the stock lost 3.8% on Friday with a bearish engulfing candlestick pattern. These patterns are normally bearish reversals. More conservative traders may want to strongly consider an early exit right here to limit any losses. We're choosing to not exit early because ZEUS might still bounce from support near $26 and the trend in the major averages is still up. We do not want to hold over the November 1st earnings report.
Picked on October 15 at $27.34
Short Play Updates
Closed Long Plays
Intl. Game Tech. - IGT - cls: 41.69 chg: +0.47 stop: 40.95
We have been stopped out of IGT at $40.95. Market weakness on Friday morning brought IGT to an intraday low of $40.73 before the stock bounced back. Readers may want to keep an eye on IGT for a rally past short-term resistance at $42.00 as a potential bullish entry point.
Picked on September 17 at $40.26
Ingersoll-Rand - IR - close: 38.10 chg: -1.21 stop: 38.75
We have been stopped out of IR at $38.66. We suspect that the spike down in IR on Friday was due to the big sell-off in shares of CAT. CAT issued some bearish comments about sales in 2007 and the stock was hammered. IR offers various machinery and construction equipment so it was natural to see traders sell IR in a knee-jerk reaction to the CAT news. Our stop loss was at $38.75 but IR gapped open at $38.66.
Picked on October 08 at $40.20
Palm Inc. - PALM - close: 15.96 chg: -0.26 stop: 15.49
Warning! Broken resistance at $16.00 has been trying to act as support but Friday's 1.7% decline left PALM under this pivotal level. The stock looks poised to move lower. There is a chance that PALM will bounce in the $15.75-15.50 region but we don't want to risk it with the technology sectors looking so overbought at this time. We're suggesting earn early exit to minimize any losses.
Picked on October 12 at $16.22
Closed Short Plays