Long Play Updates
Basic Energy - BAS - close: 25.95 change: +0.65 stop: 24.65*new*
Oil stocks continued to post gains on Monday. The OIX oil index rose 1.38% and the OSX oil services index added 1.45%. Shares of BAS out performed most of its peers with a 2.5% gain on strong volume. Don't forget that this is a very short-term play and we plan to exit on Wednesday, November 8th at the closing bell to avoid earnings the next day. We're raising the stop loss to $24.65. Our target is $27.50.
Picked on November 05 at $25.30
ENSCO - ESV - close: 50.67 change: +0.44 stop: 47.49
Crude oil futures rebounded back above potential resistance at $60 a barrel. This combined with the market's widespread strength helped ESV post another gain (+0.8%). We don't see any changes from our weekend play description. Our multi-week target is the $54.50-55.00 range. Be prepared for some resistance and a likely pull back near $52.50.
Picked on November 05 at $50.23
Hess Corp. - HES - close: 44.89 chg: +1.04 stop: 39.99
HES is another oil stock posting gains on Monday. The stock rose 2.3% and closed at a new relative high. We don't see any changes from our weekend new play description. We do have a relatively wide (aggressive) stop loss. More conservative traders may want to consider a tighter stop. Our target is the $48.00-50.00 range over the next several weeks.
Picked on November 05 at $43.85
Short Play Updates
INVACARE - IVC - close: 21.84 change: +0.34 stop: 23.11
Monday's market rally inspired a 1.5% oversold bounce in IVC. The stock remains under broken support and what should be resistance at the $22.00 level - for now. A failed rally under $22 could be used as a new bearish entry point but we would hesitate to launch new positions if the major averages are still posting gains. Our target is the $20.05-20.00 range. More aggressive traders may want to aim lower.
Picked on October 30 at $21.94
Joy Global - JOYG - close: 39.10 chg: +0.55 stop: 40.65
JOYG continued to bounce higher this morning but by 11:00 o'clock the upward momentum had stalled and shares spent the rest of the session trading sideways. It looks like the strength in JOYG is probably due to the market rally since some of Friday's biggest gainers in coal were losers today. We'd watch for a failed rally under $40.00 and its 100-dma as a potential entry point for new shorts in JOYG. We do expect a bounce on the initial test of the $35.00 level. Our target is the $33.00-32.00 range. FYI: The latest (October) data put short interest at 3.4% of JOYG's 118 million-share float.
Picked on November 01 at $37.35
Monster Worldwide - MNST - close: 40.06 chg: +0.73 stop: 41.65
Strength in tech stocks and the Internet sector helped MNST produce a 1.8% bounce. Volume came in pretty low so it's hard to say how much strength was behind today's move. What we did notice was how the rally failed to push past the 10-dma or MNST's short-term, two-week trendline of lower highs. Bulls will point out how the short-term technicals are starting to turn positive again. We need to be on our toes here. More conservative traders may want to use a tighter stop loss. Our target is the $35.50-35.00 range since the $35.00 level has been support over the last few months. FYI: The latest (October) data put short interest at 3% of MNST's 116 million-share float.
Picked on November 01 at $39.60
Rambus Inc. - RMBS - close: 16.61 change: +0.20 stop: 17.25
The rally in tech stocks lifted the SOX to a 1.7% gain. Shares of RMBS followed with a 1.2% rise. We're still sitting on the sidelines with this play waiting for a breakdown under support at the $16.00 level. We're suggesting that readers use a trigger at $15.90 to open positions. If triggered our target is the $12.50 level. More aggressive traders may want to aim for the August lows closer to $10.00. Be advised that RMBS is very active in various legal battles over patents and intellectual property and bears (and bulls) are constantly at risk for an unexpected headline sending the stock surging one way or the other. More conservative traders may want to avoid this play. FYI: The latest (October) data put short interest at 6.4% of the 85.3 million-share float.
Picked on October xx at $xx.xx <-- see TRIGGER
Toll Brothers - TOL - close: 28.05 chg: -0.18 stop: 30.05
TOL continued to display relative weakness with a 0.6% decline and a breakdown under technical support at its rising 50-dma. The rest of the homebuilders didn't do much better with a very meager bounce for the DJUSHB index. Currently TOL is testing support at the $28.00 mark. We're suggesting a trigger to short the stock at $27.95. It looks like a move under $28.00 will break the three-month trendline of support. If triggered our target is the $25.25-25.00 range. We do not want to hold over the early December earnings report. FYI: The P&F chart is still bullish for TOL and shares can trade to $25 and not break the current buy signal. Traders should also note that the latest (October) data put short interest at 15% of TOL's 114.9 million-share float. That's a high amount of short interest and increases the chance of a short squeeze should TOL suddenly move higher.
Picked on November xx at $xx.xx <-- see TRIGGER
Texas Instruments - TXN - close: 29.74 change: +0.17 stop: 31.15
TXN managed to hit a new relative low this morning (29.23) before bouncing back thanks to a widespread rally in tech stocks. Unfortunately for the bulls TXN failed to breakout past the $30.00 level, which looks bearish. A failed rally under $30 could be used as a new entry point but right now we'd hesitate to open new plays especially if the major averages are posting gains. Our target is the $27.50 mark.
Picked on October 27 at $29.90
Closed Long Plays
Closed Short Plays
Allstate - ALL - close: 62.26 chg: +0.78 stop: 62.11
We have been stopped out of ALL at $62.11. Four trading days ago the stock broke down from its two-week trading range. The move now appears to be a bear trap. Today's rally is a breakout through the top of its previous trading range and resistance at the $62 level.
Picked on November 01 at $60.95