Long Play Updates
AllState - ALL - close: 65.11 change: -0.81 stop: 63.49
ALL got hit with some stronger selling on Friday, starting with a gap down. ALL is overbought so we could see a pullback but hopefully the 20-dma at $64.83 or uptrend line from August at $64.60 will provide support. We remain bullish on the stock as long it remains above its uptrend line. While our stop remains at $63.49 (now just below the rising 50-dma at $63.59) more aggressive traders may want to exit with a break of the uptrend line from August. The ascending wedge pattern drawn on the daily chart should get another push higher at which time we would look to take profits. We currently have an upside target in the $69.00-70.00 range but may exit earlier if another new high is accompanied by more bearish divergences.
Picked on December 15 at $65.25
ONEOK Inc. - OKE - close: 43.12 change: -0.40 stop: 42.25
OKE looks like it could be ready to work off its overbought condition and may pull back to its uptrend line from May and 50-dma, both located at $42.35. Price level support is just below that at $42.15 and if you'd like to give yourself a little more staying power in this trade you can lower your stop to $42.09 but we'll keep it just below the uptrend line/50-dma. We expect to see another higher after this pullback and that's when we'll be setting an exit target. Considering the bearish divergence on daily RSI and weekly overbought we think this rally is probably close to a longer term top.
Picked on November 28 at $42.25
Raytheon - RTN - close: 52.80 change: -0.41 stop: 51.99
RTN experienced sharper selling today after breaking its uptrend line from November but stopped at its 20-dma at $52.81. We remain somewhat cautious given the overbought oscillators that have now rolled over so we are not suggesting new positions. We'll probably get a larger pullback that could offer additional opportunities for a long play. There were no bearish divergences at the last high which leads us to believe there should be a continuation higher after this pullback. We're leaving our stop just below the low on 12/11/06 but more aggressive traders can consider raising the stop closer to the 20-dma and take yourself out on a further drop next week. The 50-dma, now at $51.09, is just above our original entry point.
Picked on November 29 at $51.05
St.Paul Travelers - STA - close: 53.69 change: -0.46 stop: 51.95
After shooting higher at the open on Thursday, STA sold off the past two days and closed on its 10-dma at $53.69. With the daily oscillators rolling over after the bearish divergence at the last high 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, both currently at $52.97 and is now close to the rising 50-dma at $51.86. 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: 24.60 chg: -0.25 stop: 27.01
CAKE continues to be pressured lower by its downtrend line from the end of November (currently at $24.70) and its 10-dma (at $25.08). This bodes well for our short play and the stop at $27.01 is above the 20-dma at $25.80. Use a bounce to the 10-dma or $25.70 to initiate a new play. Our downside 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.
on December 18 at $25.65
Colonial Prop. - CLP - close: 46.88 change: +0.18 stop: 48.26
CLP rallied all week and looks like it's going to push up to its 20-dma at $47.18. It has additional resistance at prior support near $47.20 and then its downtrend line from October located at $47.60. There is then layered resistance up to the declining 50-dma at $48.27 where our stop is located which is also above the 200-dma. This bounce is another opportunity for a short entry with the same stop level as noted above. 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: 31.59 change: -0.50 stop: 35.70
On Friday NEW dropped below the trend line along the lows since June and is approaching the October 2005 low near $30.25. The stop is above the 20-dma and downtrend line from August at $35.40. More aggressive traders can lower their stop to just above Tuesday's high of $35.07. We remain bearish on NEW with a downside target in 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: 23.75 change: -0.20 stop: 25.01
TCHC is working its way higher, pushed above its 10-dma at $23.76 but then closed on it. Its 20-dma is at $24.67 and could get tagged if this pushes a little higher. The downtrend line from November (ignoring the price spike up in October) is just above the 20-dma, currently at $24.80 so there's layered resistance to much more of a push higher. Volume was very light this week but picked up on today's decline so that's a good sign for our bearish play. 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: 42.46 change: +0.54 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, currently at $40.08, to trigger our entry at $39.60. Price action on the daily charts looks like it's just consolidating so we like our entry price and will patiently wait for it to get hit. We might raise our trigger price if this pushes a little higher in the coming week. Our downside target price is $35.00 which is just above its 200-dma and at previous price level resistance now potential support.
Picked on December 21 at $40.19 (waiting for trigger at $39.60)
Citrix Sys. - CTXS - close: 27.05 change: -0.16 stop: 28.80
After dropping below support at $27.60, which is a potential H&S neckline for price action since August, CTXS has been consolidating. We are now hoping to see CTXS head for its H&S price objective of $18 which is the same as the current P&F price objective. 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