Long Play Updates
Boardwalk Pipeline - BWP - cls: 37.50 chg: +0.35 stop: 35.35
Shares of BWP ignored any weakness in crude oil on Friday and closed near another new high. Volume actually picked up on Friday's gain, which is a good sign. The MACD indicator on the daily chart has produced a new buy signal. Plus, the weekly chart has produced a new bullish engulfing candlestick. We remain bullish and would still suggest new long positions here. Our target is the $39.85-40.00 range. Our stop will be $35.35. FYI: Average daily volume is a little low so stay more cautious than normal.
Picked on March 08 at $37.10
eBay Inc. - EBAY - close: 30.82 chg: -0.20 stop: 29.49
We warned readers that EBAY looked poised to move lower after a couple of failed rallies under the 50-dma this past week. Shares still look ready to move lower. We are expecting a dip toward support near $30.00 and its simple 200-dma. Volume continued to decline throughout the week. We would wait for signs of a bounce in the $30.00-30.50 range before considering new long positions. More conservative traders may want to use a tighter stop loss. We have two targets. Our first, more conservative target, will be the $33.85-34.00 range. Our second, more aggressive target, will be the $37.00-38.00 zone. FYI: Believe it or not but in spite of the big decline two weeks ago the P&F chart is still bullish.
Picked on March 05 at $30.49
Level 3 Comm. - LVLT - cls: 6.32 chg: +0.10 stop: 6.46
LVLT displayed some strength early on Friday but closed off its best levels of the session. We remain bullish on the stock with its pattern of higher lows. However, we're going to stick to our plan and wait for a breakout over resistance near $6.80. We're suggesting a trigger to buy the stock at $6.81. If triggered our target is the $7.35-7.40 range as LVLT has long-term resistance near $7.40. More aggressive traders may want to aim higher near $8.00 or even consider buying a rebound over $6.30 (today's high). The P&F chart is very bullish with a $12.75 target.
Picked on February xx at $xx.xx <-- see TRIGGER
Redwood Tr. - RWT - close: 55.70 chg: +0.51 stop: 53.39 *new*
REIT stocks were a pocket of strength on Friday and shares of RWT resisted the urge for further profit taking following Thursday's bearish reversal. The stock remains above broken resistance near $55.00 and its 10-dma but we're not seeing any follow through higher either. We would suggest waiting for a rally past $56.35 before opening new bullish positions. We'll try and reduce our risk by adjusting the stop loss to $53.39, which is under the simple 200-dma. More conservative traders may want a tighter stop. Our target is the $59.00-60.00 range. Actually, more conservative traders may want to avoid this play altogether. In addition to being a REIT, RWT also has exposure to the residential loan market, which has been getting killed as investors flee anything related to residential lending thanks to the carnage taking place in the sub-prime areas. Today that group, the sub-prime lenders, witnessed a sharp bounce but it may just be a bounce and nothing more. FYI: The P&F chart remains bearish given the recent sell-off. The most recent (and probably out of date) data put short interest at almost 7% of RWT's 26.4 million-share float.
Picked on March 08 at $55.36 *gap higher*
TEPPCO Part. - TPP - close: 42.97 chg: +0.27 stop: 41.95
TPP is another oil-related stock that ignored the Friday weakness in crude oil. Traders bought the shallow dip in TPP and the stock bounced to a 0.6% gain on Friday. The overall pattern remains bullish and we would continue to suggest long positions with TPP above $42.50. Our target is the $44.90-45.00 range.
Picked on March 06 at $42.88
Short Play Updates
Agilent Tech. - A - close: 31.76 chg: +0.02 stop: 32.55
There was no profit taking in A following Thursday's rally and that might be bad news for the bears. Yet at the same time the bulls tried twice to breakout over resistance near $32.00 and its exponential 200-dma and they failed both times, which would be considered bad news for the bulls. Thus, shares of A, appear to be in a stalemate - at least for now. The overall pattern looks bearish with a head-and-shoulders pattern that forecasts a $27.50 target. More conservative traders may want to tighten their stops toward $32.00. We would wait for a new drop under $31.00 before considering new short positions. Our target is the $28.50-27.50 range.
Picked on March 04 at $30.72
Avid Tech. - AVID - close: 33.45 chg: -0.09 stop: 34.25
AVID remains in the $32-34.00 trading range. The larger pattern is bearish with a trend of lower highs but there is no guarantee that the next move is going to be lower. We're not suggesting new positions at this time and more conservative traders may want to exit early or tighten their stops toward resistance near $34.00. Our target is the $30.50-30.00 range. FYI: Readers should note that the most recent (January) data puts short interest at 12.2% of AVID's 40.9 million-share float, which is relatively high and raises the risk of a short squeeze.
Picked on February 05 at $34.65
Consol Energy - CNX - close: 35.96 chg: -0.28 stop: 36.86
We might be in luck. CNX produced a failed-rally type of pattern on Friday near Thursday's high and its 200-dma. Aggressive traders might want to use this as a new entry point for shorts. Chart readers will note that this could be the peak for the right shoulder in a bearish head-and-shoulders pattern. We would prefer to see more downward follow through before initiating new positions. CNX still has short-term support near $34.00. Our target is the $30.50-30.00 range.
Picked on March 05 at $33.95
Comptr.Prog.&Sys - CPSI - cls: 26.77 chg: -1.24 stop: 29.52*new*
Friday morning shares of CPSI were downgraded to an "under weight" by Prudential. The news sent shares spiking lower at the open and to an intraday low of $26.14. The stock closed with a 4.4% loss on strong volume. We are adjusting our stop loss to breakeven at $29.52. More conservative traders may want to consider an early exit now to lock in a potential gain. We're not suggesting new positions at this time. Our target is the $25.50-25.00 range. The P&F chart's bearish target has fallen from $18 to $16. The most recent (January) data puts short interest at 10.3% of the company's 9.3 million-share float. That is a high amount of short interest and with such a small float it really increases the risk of a short squeeze so trade cautiously!
on February 06 at $29.52
Federated Dept. - FD - close: 44.49 chg: -0.45 stop: 45.05
We find it very interesting that shares of FD failed to see any upward follow through on Thursday's rally. Resistance is holding at the $45.00 level. This is very significant resistance and shares could be setting up a very big bearish double-top pattern. However, a breakout would be very bullish. Nimble traders may want to consider switching sides and going long if FD can breakout over $45.00. We'll certainly drop FD as a bearish candidate if shares close over $45.00. Right now the plan is to short the stock at $43.43. If triggered our target is the $40.50-40.00 range.
March xx at $xx.xx <-- see TRIGGER
Closed Long Plays
Closed Short Plays