Long Play Updates
Amer. Electric - AEP - close: 42.53 chg: +0.10 stop: 41.89*new*
The UTY utility index, which hit new all-time highs this past week, may have encountered some round-number resistance at the 500 level. Overall the trend in utilities is bullish so this may just be a temporary pause to rest. Shares of AEP has also seen a drop in upward momentum and shares are struggling to rally past the $42.70-42.75 region. We would watch for a dip back toward the $42.00 level as a new bullish entry point to go long the stock. Please note that we're adjusting our stop loss again to $41.89 in an effort to reduce our risk. Our 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
AllState - ALL - close: 65.21 change: +0.33 stop: 63.49
Our new play in ALL is now open. The stock broke out over resistance at $65.00 and hit our suggested trigger to go long the stock at $65.25. We do not see any changes from our Thursday night new play description so we're reposting it here:
The IUX Insurance index is hitting new multi-year highs. Contributing to the sector's strength is ALL, which is flirting with its own record highs. The stock has a bullish trend of higher lows and the technicals have turned bullish or they are very close to producing a new bullish buy signal. Currently shares of ALL are trading under resistance at the $65.00 level. We are suggesting a trigger to buy the stock at $65.25. If triggered then our target is the $69.00-70.00 range. The P&F chart is bullish and points to a $69 target.
Picked on December 15 at $65.25
Beazer Homes - BZH - close: 46.00 change: +0.11 stop: 44.75*new*
We do not see any significant changes from our previous updates on BZH. The homebuilders are still struggling and the group, including BZH, has seen a weeklong consolidation lower. Yet in spite of the pull back BZH has not broken what should be support at the $45.00 level. It is noteworthy that the lack of upward momentum has turned the short-term technicals bearish. We are very cautious and hesitate to suggest new long positions here. More conservative traders may want to exit early to avoid future losses. BZH does have potential resistance at its 200-dma near $48.00. We are adjusting our stop loss to $44.75. Currently our target is the $49.50-50.00 range.
Picked on December 03 at $45.84
Complete Prod. - CPX - close: 22.00 chg: -0.26 stop: 21.49
Warning! Lack of upward follow through on Thursday's breakout from CPX's pennant pattern is not a good sign for the bulls. The oil sector experienced some profit taking on Friday in spite of a strong rise in crude oil. We remain bullish on the energy sector but we're concerned with CPX, especially after Friday's bearish engulfing candlestick pattern. Traders can choose to buy the dip to $22.00 or wait for a rise past $22.40 before initiating new long positions. We do expect some resistance near $23.15 but our target is the $24.50-24.75 range.
Picked on December 14 at $22.26
D.R.Horton - DHI - close: 27.12 change: +0.48 stop: 25.95*new*
DHI out performed most of its peers in the homebuilders on Friday with a 1.8% gain and on above average volume, which is normally a bullish sign. Yet the stock is still trading sideways like most of the sector. Traders might be tempted to buy this bounce but bear in mind the lack of upward momentum has turned the short-term technicals bearish. We're adjusting our stop loss to $25.95, since the $26.00 level looks like short-term support. 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 - cls: 61.90 chg: -1.24 stop: 59.89*new*
Reversal alert! Bullish traders should turn defensive on FLA. Shares of FLA produced a sharp bearish reversal on Friday, which was backed by strong volume. We could not find any stock-specific news to account for the weakness but the transportation sector and the railroad sector indices were both down on Friday. We are adjusting our stop loss to $59.89. We're not suggesting new plays at this time and more conservative traders may want to exit early to avoid further losses.
Picked on December 05 at $62.14
Grant Prideco - GRP - close: 43.94 chg: -0.57 stop: 42.69
As you probably already know oil stocks suffered some profit taking on Friday in spite of a strong day for crude oil. The sector weakness impacted GRP and the stock lost 1.2%. We have a relatively tight stop and more aggressive traders may want to widen their stop just a bit. The 200-dma near 42.57 should be short-term support. We would wait for a bounce back over $44.60 before considering new longs or more conservative traders may want to wait for a rally past $45.32 (the December highs) before buying the stock. Our target is the $47.50-48.00 range.
Picked on December 14 at $44.51
Guitar Center - GTRC - close: 45.68 change: -1.16 stop: 44.89*new*
It looks like investors were unhappy with the news that GTRC lost the bid to buy Dennis Bamber, Inc. who owns The Woodwind & The Brasswind company. The news came out on Friday morning and shares of GTRC had dropped 2.4% by the closing bell. We had warned readers that GTRC might dip toward $45.00 and technical support at its 200-dma. The stock did bounce near $45.00 and traders can use the move as a new bullish entry point but we would rather wait and see a stronger rebound before launching new positions. Please note that we're raising our stop loss to $44.89. Our short-term target is the $49.75-50.00 range but more aggressive traders may want to aim higher.
Picked on December 05 at $46.40
Noble Energy - NBL - close: 52.79 change: -1.24 stop: 49.75
Reversal alert! The trading in NBL has been somewhat volatile. The stock had spent the last two weeks consolidating sideways in a trading range. On Thursday, with the strength in oil stocks, NBL broke out higher from its trading range and hit a new record high. Shares gave back all of their gains on Friday with a bearish engulfing candlestick (reversal) pattern. More conservative traders may want to exit early right here to limit any losses. We're still bullish on oil but we would look for NBL to dip toward $52.00-51.00 before finding any support.
Picked on November 29 at $53.11
NATCO - NTG - close: 35.94 change: +0.01 stop: 34.65
NTG held up relatively well considering the sector weakness in oil on Friday. We do not see any changes from our new play description on Thursday night so we're reposting it here:
NTG is another oil service play. The OPEC production-cut news and rally in crude oil helped NTG rise 2.4% today. Short-term technicals are starting to turn bullish again as NTG flirts with a breakout from its six-week consolidation pattern. Aggressive traders might want to open positions now. We're a little worried about the lack of volume behind Thursday's move. We are suggesting a trigger to buy the stock at $36.51. If triggered our target is the $39.85-40.00 range.
Picked on December xx at $xx.xx <-- see TRIGGER
ONEOK Inc. - OKE - close: 43.50 change: +0.05 stop: 41.95 *new*
We are cautiously optimistic on OKE. Unfortunately, Thursday's bounce failed to see any follow through on Friday. Overall the trend is bullish but lack of upward momentum has turned the short-term technicals bearish. We hesitate to suggest new bullish positions right here. Please note that we are adjusting our stop loss to $41.95. Our target is the $45.00-46.00 range.
Picked on November 28 at $42.25
Rowan Cos. - RDC - close: 37.27 change: -0.01 stop: 34.75*new*
RDC struggled to produce any sort of bullish follow through following Thursday's big breakout move. Profit taking across the energy sector inhibited any gains. At this time we would look for a dip back toward the 200-dma near $36.50 or a dip back toward $36.00 as a new bullish entry point. Please note that our stop loss has been raised to $34.75. Our target is the $41.00-42.00 range. More conservative traders may want to exit early near $40.00, which might be round-number resistance.
on December 14 at $37.05
Raytheon - RTN - close: 52.66 change: +0.26 stop: 49.85
Defense stocks trekked higher again for the second day in a row. This sector support lifted RTN in addition to news that the company had won another military contract from the U.S. government. Shares of RTN soared higher on Friday morning and hit a new all-time high of $53.20 before paring its gains. At this time we're expecting a dip back toward $52.00. Short-term technicals have turned bearish so we would be cautious about new and existing plays. More conservative traders may want to tighten their stops. Our target is the $54.50-55.00 range.
Picked on November 29 at $51.05
Short Play Updates
Cheesecake Factory - CAKE - cls: 25.86 chg: -0.40 stop: 27.01
Shares of CAKE continue to show relative weakness. The stock lost 1.5% on Friday and closed under support at $26.00 and its 100-dma. More aggressive traders may want to open new short positions right now. However, keep in mind that CAKE bounced at $25.79 on November 3rd and bounced at $25.75 on December 1st this year. We want to see a new relative low before readers open positions so we're suggesting a trigger 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: 34.18 change: -0.00 stop: 36.55
There was no change in shares of NEW on Friday and we don't see any changes from our previous updates. The stock has been trading sideways in a narrow range for a week. We should see a move soon - either a bounce back toward what should be resistance near $35.50-36.00 or a breakdown to a new relative low. 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: 25.10 change: +0.19 stop: 26.01
The oversold bounce in NTLI just posted its second gain in a row. Volume came in a little above average but the rally stalled under its 100-dma (and its 50-dma). Shares appear to be testing the stock's bearish trendline of lower highs. Look for a decline under Friday's low (24.93) as a new entry point for shorts. More conservative traders may want to tighten their stops toward the 50-dma. 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.
Picked on December 10 at $24.44
21st Century - TCHC - close: 25.10 change: -0.16 stop: 26.01*new*
We do not see any significant changes from our previous updates on TCHC. The stock's oversold bounce has stalled under the multi-week trendline of lower highs (resistance). Aggressive trades may want to start new positions now. We would wait for a drop under $25.00 or $24.84 before initiating new plays. We are going to adjust our stop loss to $26.01. More conservative traders may want to put their stop closer to the 10-dma (25.58) or the 50-dma (25.83). 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
Carrizo Oil & Gas - CRZO - cls: 31.37 chg: -0.60 stop: 30.90
We remain bullish on the energy sector and oil stocks but CRZO is showing too much relative weakness so we're choosing to exit early. We would keep an eye on the stock for a rally past $32.40-32.50 as a potential bullish entry point.
Picked on November 29 at $32.15
Closed Short Plays