Long Play Updates
Arch Coal - ACI - close: 28.80 change: -1.20 stop: 27.75
Coal stocks took a beating on Thursday. Peabody Energy (BTU) reported earnings today that were eight cents better than Wall Street expected but the company issued an earnings warning. The news sparked a sector-wide round of profit taking. BTU lost 3% and broke its three-week bullish trend. Shares of ACI lost 4% on the news and on big volume, which is a warning sign for the bulls. Traders did buy the dip in ACI above the $28 level but we would be very defensive here and more conservative traders may want to exit early. We're not suggesting new positions at this time. Our target is the $32.50 level. Please note that we are adjusting the stop loss to $27.75. We do not want to hold over the early February earnings report so we only have a couple of weeks. FYI: The P&F chart is still bearish from the January sell-off.
Picked on January 21 at $29.08
Anadarko Petrol. - APC - close: 41.93 change: -1.18 stop: 41.75
A 2% sell-off in crude oil under cut any strength in the energy sector. The OIX oil index lost almost 2% and shares of APC plunged 2.7%. Currently we are sitting on the sidelines. Our strategy suggests using a trigger to buy the stock at $44.05. We are a little concerned about today's drop, where APC broke down under what should have been short-term support near $42.00 and its 10-dma. More aggressive traders might want to gamble on a bounce from here. We'd be more inclined to wait since today's sell-off in APC broke its two-week trend of higher lows. If triggered our target is the $47.50-48.00 range.
Picked on January xx at $xx.xx <-- see TRIGGER
Cascade - CAE - close: 52.61 chg: -1.66 stop: 52.45
CAE remains stuck in its trading range. We do not see any changes from our previous comments. We are still waiting for a breakout over resistance at the $55.50 level. Our suggested trigger to buy the stock is at $55.75. If triggered our target is the $59.76-60.00 range. FYI: We do not want to hold over the early March earnings report.
Picked on January xx at $xx.xx <-- see TRIGGER
Comcast Corp. - CMCSK - cls: 42.64 chg: -1.36 stop: 41.75 *new*
The market-wide profit taking was not lost on shares of CMCSK. Investors took some money off the table and the stock lost 3% to break very short-term support near $43.50. The $42.50 region might offer some support. We would be tempted to buy a bounce in the $42.00-42.50 region but unfortunately we are running out of time. The company is expected to report earnings in early February so we're not suggesting new positions. Please note that we're adjusting our stop loss to $41.75, which is just under support at its rising 50-dma.
Picked on January 14 at $43.32
Commscope - CTV - close: 31.18 change: -0.90 stop: 29.99
Shares of CTV did not escape the market weakness. The stock lost 2.8% and reversed yesterday's gains. It looks like traders were beginning to buy the dip near its 50-dma late this afternoon. However, we would probably wait for a new rise past $32.00 before considering new positions. Our target is the $34.85-36.00 range. We do not want to hold over the late February earnings report. FYI: The P&F chart is bearish. Plus, more conservative traders may want to put their stop at $30.49 under the most recent low.
January 24 at $32.05
Granite Constr. - GVA - close: 52.55 change: -0.97 stop: 50.79
GVA pulled back toward its four-week trendline of support near its rising 10-dma. The dip looks like a new entry point to buy the stock. However, we would hesitate to open new long positions if the major averages continue to sink. Our target is the $57.50 mark. We do not want to hold over the mid February earnings report.
Picked on January 21 at $52.41
MedImmune - MEDI - close: 34.14 change: -0.57 stop: 33.65 *new*
We have been warning readers for almost two weeks that MEDI was likely to pull back and retest support (broken resistance) in the $34.00 region. That test took place today. A bounce from here could be used as a new bullish entry point although more conservative traders may want to wait for a breakout over its simple 10-dma (currently near $34.80). We are going to inch up our stop loss to $33.65. Our target is the $36.50-37.00 range.
Picked on January 05 at $33.98 *gap open entry*
Bankrate Inc. - RATE - close: 37.78 chg: -0.34 stop: 35.95*new*
Financial stocks did not do so well today as investors worried about rising rates again. Shares of RATE dipped 0.89% but did so on relatively low volume. We would hesitate about opening new bullish positions at this time. Please note that we're inching up our stop loss to $35.95. Our target is the $41.90-42.00 range. More aggressive traders may want to aim higher. FYI: The most recent (December) data put short interest at more than 35% of RATE's 11.2 million-share float. We do not want to hold over the early February earnings report!
Picked on January 11 at $38.25
Raymond James - RJF - close: 31.40 chg: -0.79 stop: 30.95
Warning! The broker-dealer stocks took a beating today. The group has been one of the best performers and traders rushed in to lock in profits as the market suffered a widespread pull back. Shares of RJF completely reversed yesterday's gains and bullish breakout. The move today looks rather bearish. If you did open positions today you may want to consider an early exit to limit any losses. At this point we'd probably wait for a new relative high before consider new positions but more aggressive traders may want to consider buying a bounce from here. Conservative traders might want to exit near the November highs around $33.60. We are aiming for the $34.75-35.00 range.
Picked on January 24 at $32.19
Raytheon - RTN - close: 51.85 change: -0.92 stop: 50.95
Uh-oh! It looks like the rebound in RTN is in trouble. The stock lost 1.7% and closed right on its rising 50-dma. Shares are poised near support at the bottom of its rising channel. A breakdown from here could be bad news. Alternatively, with RTN near support a bounce from here would be a new bullish entry point. More conservative traders may want to tighten their stops toward $51.40-51.50. Our target is the $55.00-56.00 range. The old highs near $54 might offer some resistance. We do not want to hold over the February 1st earnings report so we do not have much time.
Picked on January 21 at $52.30
TJX Cos. - TJX - close: 29.79 change: -0.25 stop: 28.95
A two-percent pull back in oil futures probably eased the selling pressure on retail stocks today. Unfortunately, the group was unable to escape the market-wide weakness. Shares of TJX managed to out perform its peers with a 0.8% loss versus a 1.5% decline in the RLX index. A bounce from the $29.50 level might be an aggressive entry point to go long. We would wait for a new relative high over $30.20 before opening new positions. Our target is the $32.50-33.00 range. We do not want to hold over the mid February earnings report.
Picked on January 24 at $30.21
Toll Bros. - TOL - close: 32.72 change: -1.47 stop: 30.89
The existing home sales numbers came out today and the results were negative with the pace of sales falling to a multi-year decline. This economic news and an earnings warning from homebuilder BZH sparked a sell-off across the sector. TOL, which had been hitting new multi-month highs, plummeted 4.29% on big volume. More conservative traders may want to tighten their stops or consider an early exit right here. We're not suggesting new positions at this time. Our target is the $34.75-35.00 range.
Picked on January 21 at $32.42
Short Play Updates
Comverse Tech. - CMVT - cls: 19.89 change: -0.15 stop: 20.51*new*
Shares of CMVT did not move much but what movement it did produce was lower. We are changing our stop loss to $20.51. More conservative traders may want to use a tighter stop loss just above the 10-dma. We'd wait for a new decline under $19.85 (or $19.79) before opening new positions. Our target is the $17.75-17.50 range. Please note that this play might have an extra risk concerning the company's earnings report. The problem is we can't find one and we can't find when it is due to report next. History would suggest CMVT tends to report in March but we can't support that for 2007. Earnings reports are always a risk because there are too many variables and the stock could move sharply either direction on the news. We did find one source that said CMVT's subsidiaries VRNT and ULCM are due to report in March.
Picked on January 22 at $19.85
Safety Ins. Group - SAFT - cls: 47.12 chg: -1.37 stop: 50.05
Insurance stocks turned lower with the rest of the market. The IUX Insurance index lost 1.3% and broke down under technical support at its 50-dma. Meanwhile shares of SAFT lost 2.8% and slipped to a new relative low. More conservative traders might want to tighten their stops toward the $49.00 region. We have two targets. Our conservative target is $45.10. Our aggressive target is the $42.50 level. FYI: The latest (December) data put short interest at 7% of SAFT's 13.1 million-share float. That does raise the risk of a short squeeze.
on January 08 at $ 48.49
Closed Long Plays
Hewlett Packard - HPQ - close: 41.71 chg: -0.68 stop: 40.59
We are throwing in the towel with HPQ. Technology-related stocks took some of the hardest hits today and if investors are worried about growth this year then tech may continue to falter. Overall shares of HPQ continue to have a bullish trend but the technical indicators have turned bearish and short-term the stock looks poised to move lower. We will keep an eye on HPQ to see if it bounces from the rising 50-dma, which would be a tempting spot to consider new bullish plays. Another spot to look would be a new rise past $42.80.
Picked on January 07
Closed Short Plays