Long Play Updates
AllState - ALL - close: 65.30 change: -0.56 stop: 63.49
Shares of ALL finally hit some profit taking after five days of gains. This shouldn't be a surprise since we've been warning readers to watch for a dip back toward what should be support near $65.00. The afternoon bounce from its lows (65.05) can be used as a new bullish entry point to go long the stock. Chart readers will note that the short-term technical indicators look a little fatigued from overbought conditions and that ALL has a bearish divergence between price and its daily MACD indicator. Therefore more conservative traders may want to tighten their stop loss. Our target is the $69.00-70.00 range.
Picked on December 15 at $65.25
ONEOK Inc. - OKE - close: 43.02 change: -0.28 stop: 42.25
OKE suffered some profit taking this morning but traders bought the dip at $42.71. The technical picture is mixed but the longer-term trend is bullish and we suspect that OKE is poised to move higher from here. However, we hesitate to suggest new bullish positions considering the weakness in the major indices. Our target is the $45.00-46.00 range.
Picked on November 28 at $42.25
Raytheon - RTN - close: 53.82 change: -0.04 stop: 51.05*new*
The big news with RTN today was the company's announcement it had sold its aircraft business for $3.3 billion. RTN expects a profit of about $2.5 billion on the deal. We believe it was today's news that accounted for RTN's big volume today. Normally when we see big volume and no movement with a stock near its highs we suspect it is distribution and bulls should turn more defensive. Right now the stock might be due for a rest so watch for a dip back toward $53.00 or its 10-dma. We are adjusting our stop loss to breakeven at $51.05. Our target is the $54.50-55.00 range.
Picked on November 29 at $51.05
St.Paul Travelers - STA - cls: 54.05 change: +0.21 stop: 51.95
This is the third day in a row that STA has tried to rally but failed to make much progress. That should put traders on alert as STA might be building a short-term top. Overall the trend is bullish but we'd probably wait for a dip back toward short-term support near $53.00 or its 10-dma near $53.20 before considering new bullish positions and even then it might pay off to look for a bounce first. Our target is the $57.50 level. The P&F chart is bullish with a $76 target.
Picked on December 17 at $53.56
Short Play Updates
Cheesecake Factory - CAKE - cls: 24.94 chg: +0.09 stop: 27.01
We do not see any significant changes from our previous updates on CAKE. The stock continues to look bearish following its breakdown under support near $26 and its 100-dma. Traders can choose to open positions now or watch for a failed rally near $26 or its 10-dma (near $25.75). More conservative traders might want to consider tightening their stops toward $26.50 or even the $26.00 region. 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 18 at $25.65
Colonial Prop. - CLP - close: 46.06 change: -0.33 stop: 48.01*new*
The oversold bounce in CLP is already struggling. Shares reversed at $46.70 and the stock closed back near the $46 level, which was support back in August. We would still consider new short positions here or on a new relative low under $45.90. The stock looks bearish given the various breakdowns and the head-and-shoulders pattern. Please note that we're adjusting the stop loss to $48.01. Our target is the May 2006 lows but we will plan to exit at $42.75. We do not want to hold over the late January earnings. FYI: Traders should know that in the past few months CLP has been noted as a potential takeover/acquisition target in the real estate sector. If a deal is announced it could be very painful for shorts but we haven't heard anything further on the subject. Meanwhile short interest is about 3% of the 43.4 million-share float.
Picked on December 17 at $46.71
New Century - NEW - close: 34.04 change: -0.20 stop: 36.01
The overall trend in NEW remains bearish but short-term the stock is trying to bounce from oversold conditions. We've been concerned that the lack of downward momentum is suggesting a short-term bottom. Fortunately, NEW still has overhead resistance at $35.00 and the $35.50 level. Watch for a failed rally at either level of overhead resistance as a new 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.
on December 10 at $34.47
21st Century - TCHC - close: 21.91 change: -0.66 stop: 25.01*new*
TCHC continues to sell-off and on big volume, which is normally a bearish sign. The stock lost another 2.9% and is quickly nearing our target in the $21.50-20.00 range. More conservative traders may want to exit early right here since TCHC is down more than 11% from our picked price. We're not suggesting new positions at this time and we're adjusting the stop loss to $25.01. FYI: The most recent (November) data puts short interest at over 6% of TCHC's 6.4 million-share 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.
Picked on December 10 at $24.84
Closed Long Plays
Closed Short Plays
World Accpt. - WRLD - close: 46.98 change: +0.99 stop: 47.75
Shares of WRLD are not cooperating with our bearish designs on the stock. Shares rose 2.15% and broke out (intraday) over resistance at $47.00 and its 50-dma. The stock almost hit our stop loss at $47.75. We could not find any company-specific news to account for today's display of relative strength. We have decided that the lack of follow through lower on the stock's trend of failed rallies is reason enough to exit early and look elsewhere.
Picked on December 18 at $45.81