Long Play Updates
Arch Coal - ACI - close: 29.31 change: +0.51 stop: 27.99*new*
Stocks in the coal industry were generally higher on Friday as the market responded positively to an earnings report from Massey Energy (MEE). ACI reacted with a 1.77% gain but the rally seemed to struggle with the $29.50 level. Overall it looks like ACI is poised to move higher but we are running out of time. ACI is due to report earnings on February 2nd. Therefore we plan to exit on Thursday, February 1st at the closing bell to avoid holding over the announcement. We hesitate to suggest new positions given our lack of time. Please note that we are inching up our stop loss to $27.99. Our target is the $32.50 level.
Picked on January 21 at $29.08
Anadarko Petrol. - APC - close: 41.92 change: -0.01 stop: 41.75
We were a little surprised to see shares of APC trading lower on Friday with crude oil futures posting another gain. APC spent the session trading sideways but still closed under what should have been support near $42.00 and its 10-dma. We're going to stick to our plan and wait for a breakout over $44.00 with a suggested trigger to buy the stock at $44.05. More aggressive traders might want to consider jumping the gun and opening positions early with a rise past $43.00. Don't forget that we plan to exit ahead of the February 5th earnings report so we only have a week, which might make this play a bit optimistic with a $47.50 target.
Picked on January xx at $xx.xx <-- see TRIGGER
Cascade - CAE - close: 53.51 chg: +0.90 stop: 52.45
Last week was more of the same for shares of CAE. The stock has been stuck in a trading range. The good news, if there is any, is that the range appears to be narrowing somewhat and that could be hinting at a breakout sooner rather than later. The technicals on the weekly chart suggest the next move is going to be down so nimble traders might want to consider shorting CAE on a break under $51, under its 100-dma or under $50.00. Currently we are waiting for a breakout over resistance at $55.50. 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: 42.52 chg: -0.12 stop: 41.75
We are running out of time with CMCSK. The company is due to report earnings on February 1st and we don't want to hold over the announcement. Therefore we plan to exit on Wednesday at the closing bell. That is assuming we don't get stopped out first. Shares of CMCSK are in a relatively steady up trend but the stock has pulled back toward its trendline of support near the rising 50-dma. Short-term technicals have turned bearish. We're not suggesting new positions at this time. Our target was the $46.00 level. More conservative traders may want to exit early!
Picked on January 14 at $43.32
Commscope - CTV - close: 32.49 change: +1.31 stop: 29.99
Entry point alert! Traders did indeed buy the dip (again). Shares of CTV rallied 4.2% on Friday and broke out to a new relative high. We suggested on Thursday that a new move over $32 could be used as an entry point to buy the stock. More conservative traders might want to consider a tighter stop loss. 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.
Picked on January 24 at $32.05
Granite Constr. - GVA - close: 52.37 change: -0.18 stop: 50.79
We do not see any changes from our comments on Thursday. The dip continues to look like a bullish entry point. The stock has pulled back toward the bottom of its bullish four-week channel (see chart). More conservative traders may want to consider a tighter stop near $51.50 or wait for a new rally past $53.00 before considering new positions. 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
Bankrate Inc. - RATE - close: 37.90 chg: +0.12 stop: 35.95
Some of the banking and mortgage stocks managed to out perform on Friday thanks to the Bank of America and Countrywide news about a potential merger or alliance. Shares of RATE bounced strongly from its lows (36.70) and the stock actually closed in the green. It certainly looks like shares of RATE are poised to move higher but readers may want to wait for a rise past $39.00 before opening new positions...if not $39.00 then maybe $38.40. 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
TJX Cos. - TJX - close: 29.50 change: -0.29 stop: 28.95
We need to turn defensive here. The retail sector failed to bounce on Friday as crude oil rose again. It might seem like investors are ignoring the positive economic news suggesting a strong and improving economy but it was only a few days ago that the RLX retail index was hitting new highs. The bad news today is that the RLX index has produced a bearish engulfing candlestick pattern on its weekly chart. This pattern is typically seen as a bearish reversal, especially near a relative high. Meanwhile TJX is struggling to breakout over the $30 level and the stock slipped almost 1% on Friday. Friday's weakness helped the MACD indicator produce a new sell signal. More conservative traders may want to exit early to limit any losses. We're not suggesting new positions at this time. 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: 32.43 change: -0.29 stop: 30.89
The homebuilders continued to see selling even though Friday offered some good news with December new home sales up better than expected. The big news within the industry was a story about the SEC pursuing a formal inquiry into KB Homes (KBH) about their option practices. Shares of TOL slipped almost 0.9% and closed near its 10-dma. We would watch for a bounce near $32.00 before considering any potential entry points and more conservative traders may want to tighten their stops. Our target is the $34.75-35.00 range.
Picked on January 21 at $32.42
Short Play Updates
Comverse Tech. - CMVT - cls: 19.77 change: -0.12 stop: 20.51
CMVT continues to sink under a steady diet of lower highs. The stock looks ready to breakdown under the $19.75 level and if it does there shouldn't be any support until the $18.90 region. We would consider new plays right here! 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: 47.38 chg: +0.26 stop: 50.05
We do not see any changes from our previous updates. Shares of SAFT continue to drift lower although there was no follow through on Thursday's breakdown. The stock appears to be trading in a narrow, descending channel (see chart). We would only consider new short positions on a failed rally under $48.75. 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.
Picked on January 08 at $ 48.49
Closed Long Plays
MedImmune - MEDI - close: 33.74 change: -0.40 stop: 33.65
After all our waiting we have been stopped out of MEDI. A negative earnings report from Amgen undermined the entire biotech sector. Shares of MEDI dipped to an intraday low of $33.45 before bouncing. We have been stopped out at $33.65.
Picked on January 05 at $33.98 *gap open entry*
Raymond James - RJF - close: 31.28 chg: -0.12 stop: 30.95
We have been stopped out of RJF at $30.95. The stock mirrored the action in the broker-dealer index with an early low followed by an afternoon bounce. The stock's bearish reversal during Wednesday and Thursday is not a good sign for shareholders.
Picked on January 24 at $32.19
Raytheon - RTN - close: 51.45 change: -0.40 stop: 50.95
We are suggesting an early exit in RTN. The stock failed to bounce at its 50-dma on Friday. Shares slipped 0.77% and look poised for more profit taking. The decline puts RTN in jeopardy of breaking significant support.
Picked on January 21 at $52.30
Closed Short Plays