Long Play Updates
AllState - ALL - close: 65.37 change: +0.07 stop: 63.49
The S&P IUX Insurance index closed marginally lower on Friday but ALL held its ground with a marginal gain on the day. Price dipped as low as $64.90 which enabled those who wanted to get long on a dip to $64.05 to do so on Friday. After dipping below its 10-dma ALL was able to close back above this support. We remain bullish on the stock above $65.00 although we could see an intraday move down to its 20-dma at $64.47. While our stop remains at $63.49 more aggressive traders may want to exit with a break of the uptrend line from August, currently at $64.20. Daily stochastics is now overbought and there is a bearish divergence on RSI. In the meantime our target is the $69.00-70.00 range.
Picked on December 15 at $65.25
ONEOK Inc. - OKE - close: 43.12 change: +0.10 stop: 42.25
The XNG natural gas index was down -0.23% on Friday so OKE's +0.23% gain was additional evidence of relative strength for this stock. So far it looks like OKE is attempting to hold onto its 20-dma at $43.19 with a little spinning top doji candlestick today. As long as this indecision turns north our play will survive. Our stop is currently near the uptrend line from May which is right on top of the 50-dma at $42.06. If you'd like just a little more staying power in this trade you can move your stop down to about $41.95.
Picked on November 28 at $42.25
Raytheon - RTN - close: 53.43 change: -0.39 stop: 49.85
RTN got hit with some profit taking on Friday but the pullback was very minor--it hasn't even pulled back to its 10-dma yet, which has supported the rally from the November low, currently at $53.09 and rising. We remain somewhat cautious given the weakness in the major market indices and the overbought oscillators so we are not suggesting new positions. Considering how close Thursday's high ($54.17) came to our target in the $54.50-55.00 range and the steepness of the rally since November, we're raising our stop to protect profits now. The stop is being raised to $51.99 which keeps the stop below the 20-dma at $52.24 and the $52.06 low on 12/11/06.
Picked on November 29 at $51.05
St.Paul Travelers - STA - close: 53.55 change: -0.50 stop: 51.95
STA dropped a little more than the Insurance index (IUX.X) on Friday and therefore showed a little relative weakness. The daily oscillators look to be rolling over and therefore we do not recommend any new plays in this stock. The current stop at $51.95 keeps it below the 20-dma and uptrend line from August. 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 - close: 24.87 chg: -0.07 stop: 27.01
After breaking below support near $26.00 CAKE has been held down by its 10-dma currently at $25.50. This bodes well for our short play and the stop at $27.01 is above the 20-dma at $26.50. If the decline continues for another few days we'll be able to lower our stop to just above the breakdown level of $25.75. Use a bounce to the 10-dma or $25.75 to initiate a new play. 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: 45.86 change: -0.20 stop: 48.26
After bouncing up on Thursday CLP failed just below its 10-dma which is a good bearish sign for our play. Friday's gap down leaves a potential new entry if CLP manages to bounce back up to close the gap at $46.07. We're keeping our stop at $48.26 to keep it above the 200-dma but may consider dropping it closer to the 20-dma if this continues to drop lower. Our target is the May 2006 low at $42.68 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: 34.44 change: +0.40 stop: 36.55
The bounce in NEW in the past week has not been able to get above its 10-dma, currently at $34.51. The 20-dma and downtrend line from August are both currently at $35.20 and our stop is presently just below the declining 50-dma at $36.77. Aggressive traders can lower their stop to just above the 20-dma and the previous low of $35.54 on 12/1/06 so perhaps $35.70 We remain bearish on NEW and traders can choose a breakdown under $34 or a failed rally under $35.20 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.
Picked on December 10 at $34.47
21st Century - TCHC - close: 23.24 change: +1.33 stop: 26.01
TCHC got a bigger bounce today but it was on lighter volume and it still has not made it back up to its 10-dma currently at $23.95 and dropping. With the lower holiday volume and high short interest ratio we could see a stronger bounce. Our stop at $25.01 is close to the 20-dma at $25.34, and dropping, so that will hopefully allow this to whip around a bit without stopping us out. Our downside 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.
Picked on December 10 at $24.84
Cognos - COGN - close: 40.97 change: +0.78 stop: 42.31
The short play in this stock has not been triggered yet as we're still waiting for it to drop through its 50-dma and its uptrend line from August, currently at $39.71, to trigger our entry at $39.60. While the broader market declined on Friday this stock got a little bounce after testing support at $39.77. With RSI dropping below 50 this one looks good for a short play should our trigger price get hit. Our target price will then be $35.00 which is just above its 200-dma and at previous price level resistance.
Picked on December 21 at $40.19 (waiting for trigger at $39.60)
Citrix Sys. - CTXS - close: 26.99 change: -0.96 stop: 51.95
CTXS dropped below support at $27.60 and hit our trigger price at $27.45 so our put play is now open. There is a potential H&S pattern that developed since August and it shows the same downside objective as the current P&F chart--$18.00. Aggressive traders can aim for that target while a short term downside target is a little less aggressive at $24.60 which is based on the 200 weekly average and a gap fill from October 2005 ($24.47 closing price on 10/24/05). An additional entry opportunity can be found if CTXS bounces back up to resistance at $27.60.
Picked on December 22 at $27.45
Closed Long Plays
Closed Short Plays