Long Play Updates
Amer. Electric - AEP - close: 42.43 change: -0.08 stop: 40.89
The rally in AEP appears to have stalled at its early December highs. We would not be surprised to see the stock dip back toward the $42.00 level again, especially if the major averages turn lower. We're going to raise our stop loss to $41.49. If you're looking for a new entry point watch for a bounce above the $42.00 level, which should act as short-term support. Our short-term target is the $44.90-45.00 range. The P&F chart points to a $50 target. FYI: We do not expect shares of AEP to move very fast so it could take a few weeks to reach our target.
Picked on December 03 at $42.03
ALON USA Ener. - ALJ - close: 29.48 chg: +0.14 stop: 28.99*new*
It looks like traders are buying the dip near $29.00, which has been support in the past. We were on the verge of being stopped out and we remain defensive here. The rebound in energy stocks was fueled by a rally in crude oil futures. If you're looking for a new entry point wait for a rally past $30.00 or $30.40. We're inching up our stop loss to $28.99.
Picked on November 21 at $30.15
Beazer Homes - BZH - close: 45.64 change: +0.06 stop: 44.25
The homebuilder sector produced a sharp bounce this morning but the group gave back most of its gains by the closing bell. This sort of failed rally is not a good sign and suggests the sector and stock are due for further consolidation. More conservative traders might want to just exit early right here to limit any losses. We suspect that BZH will dip to the $45.00 level. Traders might also want to tighten their stops toward the $44.80 region. Currently our target is the $49.50-50.00 range.
Picked on December 03 at $45.84
Carrizo Oil & Gas - CRZO - cls: 31.48 chg: +0.22 stop: 30.90*new*
We remain very wary of the action in CRZO. Yesterday the stock produced a bearish breakdown and reversal. Shares produced a bounce today but the stock struggled to make is past the $32 level. We're not suggesting new positions at this time and more conservative traders may want to exit early. We are raising our stop loss to $30.90.
Picked on November 29 at $32.15
D.R.Horton - DHI - close: 26.78 change: +0.03 stop: 25.79*new*
DHI is another homebuilder that experienced some early strength but gave most of it back before the close. The trend is still up but the lack of momentum is turning the technical picture bearish. We are turning defensive and are raising the stop loss to $25.79, which is under what should be technical support at its 200-dma. Our short-term target is the $29.90-30.00 range. The P&F chart points to a $36 target.
Picked on December 03 at $26.59
Florida East Coast - FLA - close: 61.46 change: -0.39 stop: 58.99
A downgrade in the railroad industry sent the Dow Jones railroad index to a 2.6% decline. Shares of FLA are still out performing its peers but the stock lost 0.6%. This move looks like another failed rally but traders bought the dip this afternoon near $61.00. We are cautiously optimistic here but traders might want to tighten their stops. The P&F chart is bullish with a triple-top breakout buy signal (formed this week) with a $94 target. Our target is the $67.00-70.00 range.
Picked on December 05 at $62.14
Guitar Center - GTRC - close: 46.69 change: +0.41 stop: 43.99
GTRC is showing some strength as traders finally step in to buy the recent dip near its 200-dma and now its 10-dma. Today's bounce looks like a new entry point to go long the stock. Our short-term target is the $49.75-50.00 range but more aggressive traders may want to aim higher.
on December 05 at $46.40
Noble Energy - NBL - close: 52.94 change: +0.90 stop: 49.75
The weekly oil inventory report pushed crude oil futures higher and that was reflected in the oil sectors. Shares of NBL rose 1.7% but remains under short-term resistance near $54.00. The P&F chart looks very bullish with a $76 target. Our target is the $57.50-60.00 range.
Picked on November 29 at $53.11
ONEOK Inc. - OKE - close: 43.22 change: +0.07 stop: 41.75
OKE is trying to bounce along the $43.00 level but there didn't seem to be a lot of conviction behind it. We still expect a dip into the $42.00-42.50 region, which is where we'd look for a bounce and a new entry point to buy the stock. Our target is the $45.00-46.00 range.
Picked on November 28 at $42.25
Rowan Cos. - RDC - close: 36.00 change: +0.60 stop: 34.45
Strength in energy stocks is finally beginning to push RDC out of its $35-36 trading range. More aggressive traders might want to buy the stock on a breakout above its 200-dma near $36.61. We are suggesting a trigger to go long at $37.05. Our target is the $41-42 range. More conservative traders may want to exit early near $40.00, which might be round-number resistance.
Picked on December xx at $xx.xx <-- see TRIGGER
Raytheon - RTN - close: 52.25 change: -0.11 stop: 49.85
This is the fourth day in a row that RTN has traded sideways in a narrow range above short-term support at the $52.00 level. The lack of upward momentum is turning the technical picture bearish. The stock is nearing its rising 10-dma, which could give shares an extra boost and renew the upward trend. If not then look for a dip toward $51. Our target is the $54.50-55.00 range.
Picked on November 29 at $51.05
Short Play Updates
Cheesecake Factory - CAKE - cls: 26.19 chg: +0.16 stop: 27.01
There is no change from our previous update on CAKE. Currently we're suggesting a trigger to short the stock at $25.65. If triggered at $25.65 our target is the $22.25-22.00 range. We do expect some support near $24.00 but given the bearish technicals on the weekly chart we think any bounce at $24 would be temporary. The P&F chart currently points to a $4.00 target. FYI: The most recent (November) data puts short interest at 11.8% of CAKE's 73.7 million-share float. That is relatively high short interest and could raise the risk of a short-squeeze if CAKE manages to rally.
Picked on December xx at $xx.xx <-- see TRIGGER
New Century - NEW - close: 34.69 change: +0.37 stop: 36.55
This is the third day in a row that NEW has traded sideways in a narrow range under short-term resistance at the $35.00 level. We don't see any changes from our previous updates. Traders can choose to open positions here or wait for a bounce and failed rally near $35.00-35.50 as a potential entry point. Our target is the $31.00-30.00 range. FYI: The most recent (November) data put short interest at 22% of the company's 50 million-share float. That is a very high degree of short interest and it does raise the risk of a short squeeze if NEW reverses sharply higher.
Picked on December 10 at $34.47
NTL Inc. - NTLI - close: 24.25 change: -0.14 stop: 26.01
Hmm... we were really expecting more of a continuation of yesterday's bounce. The relative weakness is encouraging but volume was pretty low suggesting a lack of conviction. The trend remains bearish but traders may want to be patient about considering new positions. There does seem to be some support near the $23.50 region but the Point & Figure chart points to a $9.00 target. We will target a decline into the $21.00-20.00 range. FYI: The most recent (November) data put short interest at 3.5% of the company's 324 million-share float.
on December 10 at $24.44
21st Century - TCHC - close: 25.55 change: +0.47 stop: 26.26*new*
Shorts should be on their guard and we suggest putting your finger on the eject button to be ready and exit if needed. The stock produced some relative strength with a 1.8% bounce on no news and very little volume. We are skeptical of the rebound and TCHC is nearing resistance at its multi-week trendline of lower highs. We are adjusting our stop loss to $26.26. More conservative traders may want to put their stop closer to the 10-dma (25.78) or the 50-dma (25.72). Our target is the $21.50-20.00 range. The most recent (November) data puts short interest at over 6% of TCHC's 6.4% float. That's a very small float so 6% might be enough short interest to really increase the risk of a short squeeze should TCHC reverse higher. Bear that in mind when considering positions as you may want a tighter stop loss.
Picked on December 10 at $24.84
Closed Long Plays
GulfMark - GMRK - close: 37.76 change: -0.47 stop: 37.39
We are suggesting an early exit in GMRK. A rise in crude oil futures helped power a rally for the energy stocks. Oil services were one of the best performing sectors today. Yet GMRK, an oil service stock, turned lower and lost 1.2%. It wasn't a big move but it was enough to produce a bearish breakdown from its recent sideways consolidation. We are suggesting an early exit to cut our losses.
Picked on November 28 at $38.70
Closed Short Plays