Long Play Updates
Arch Coal - ACI - close: 38.93 change: +0.71 stop: 35.89
Coal stocks were strong on Thursday. Traders bought the dip in ACI (again) and the stock posted a 1.8% gain. Volume was a bit light but the move looks like a new entry point - granted you'll want to consider current market conditions before opening new positions. The P&F chart is already bullish with a $55.00 target. We see some resistance near $40.00 but our target is the $42.50-45.00 range.
Picked on May 09 at $38.44
Aracruz Celulose - ARA - close: 59.19 chg: +1.20 stop: 53.95
The rally in ARA was very bullish with a 2% gain and big volume behind the move. ARA broke through resistance in the $58.00, 58.50 and $59.00 levels. It also broke through the neckline to an inverse head-and-shoulders pattern. Meanwhile the P&F chart looks very bullish with a triple-top breakout buy signal with a $70 target. This definitely looks like a bullish entry point. However, we want to caution you about the U.S. market's major indices looking vulnerable and potential resistance for ARA at the $60.00 mark. It is possible that as a Brazilian company (and stock) ARA might be able to avoid any serious correction if the U.S. market turns lower. Our target is the $62.00-62.50 range.
Picked on May 06 at $56.29
British Amer. Tob. - BTI - cls: 64.36 chg: -0.12 stop: 61.85 *new*
BTI didn't make any progress on Thursday. Shares bounced around the $64.00-64.50 range. The stock continues to look bullish above $64.00 and as a tobacco stock, which tends to be defensive, it could out perform if the U.S. markets correct. We are inching up our stop loss to $61.85. Our target is the $67.50-70.00 range. BTI doesn't move very fast so this could take several weeks.
Picked on May 07 at $64.05
Anheuser Busch - BUD - cls: 49.68 chg: -0.60 stop: 48.95
The bounce attempt in BUD did not last long. Shares reversed course and closed under the $50 level, which is bearish. At this time we're expecting a dip toward $49.00 and its rising 200-dma. Watch for a bounce near the bottom edge of its wide, rising channel near $49. More aggressive traders may want to give themselves a wider stop loss to give BUD more room to maneuver. We are leaving our stop at $48.95. It could take several weeks before shares hit our target in the $53.85-54.00 range.
Picked on May 06 at $50.50
ENSCO - ESV - close: 59.54 change: +1.09 stop: 55.85 *new*
Strength in crude oil fueled a rally for the energy sector. ESV rose 1.8% and broke out to a new high. The stock is now challenging round-number, psychological resistance at the $60.00 level. We are raising our stop loss to $55.85. Currently our target is the $61.50-62.50 range. More conservative traders may still want to lock in a gain at $59.85. The Point & Figure chart points to an $82 target.
Picked on April 29 at $56.84
Georgia Gulf - GGC - close: 18.61 chg: -0.06 stop: 17.75 *new*
Shares of GGC are coiling sideways. We use the term "coiling" to suggest GGC is winding up like a spring ready to breakout. Given the short-term trend, which is bullish, we would expect the breakout to be higher but there is no guarantee. Please note we're raising the stop loss to $17.75. We're not suggesting new positions at this time. Our target is the $19.90-20.00 range.
Picked on May 07 at $17.35
Kansas City Southern - KSU - cls: 39.87 chg: +0.69 stop: 37.75
Bullish breakout alert! The railroad industry was one of the market's best performing groups today. The DJUSRR index rose 2% and broke out over resistance at the 500 level to a new all-time high. KSU also broke out over resistance to a new high. Our suggested trigger to buy the stock was at $39.61 so the play is now open. More conservative traders may want to wait for another rally past $40 or today's high near $40.19 before opening new positions. It's worth noting that there has been renewed rumors of consolidation (M&A activity) in the railroad sector and that's probably fueling the strength right now - not to mention the big rise in crude oil. Our target is the $43.50-44.00 range. Currently the P&F chart points to a $45 target.
Picked on May 17 at $39.61
China Life Ins. - LFC - cls: 50.03 chg: -0.73 stop: 47.74 *new*
There was no follow through on LFC's rally yesterday. That's a warning flag for the bulls. While the stock is currently inside its short-term trading range it looks like odds are growing that LFC will dip back toward $48.50-48.00. We are raising our stop loss to $47.74. We would wait for the dip and bounce above $48 or wait for a new relative high over $51.00 before buying into the stock now. Our target is the January 2007 highs in the $57.00-57.50 range. FYI: The P&F chart has produced a new triple-top breakout buy signal. The chart pattern points to a $70 target.
Picked on May 13 at $50.27
McGrath RentCorp - MGRC - cls: 30.26 chg: -1.15 stop: 29.89
Trading in MGRC looked very bearish today with a 3.6% decline. If MGRC doesn't bounce form the $30 level soon we'll probably drop it as a bullish candidate. Currently we're waiting for a breakout over $32.00. Our suggested trigger to buy the stock is at $32.35. More conservative traders may want to use a trigger above $32.50. If we are triggered our target is the $35.75-36.00 range. The P&F chart is bullish with a $50 target.
Picked on May xx at $xx.xx <-- see TRIGGER
Superior Energy - SPN - cls: 39.63 chg: +0.64 stop: 35.99
A big rally for crude oil futures powered a rise for energy stocks. SPN rose 1.6% and is challenging round-number resistance at the $40.00 level. We are not suggesting new positions at this time. Our target is the $42.50 level. The P&F chart is very bullish with a $65 target.
Picked on May 13 at $38.42
Thermo Fisher - TMO - close: 53.37 change: -0.53 stop: 51.75
Upward momentum in TMO is really starting to struggle. Given the lack of follow through in the NASDAQ and the Russell 2000 our enthusiasm for bullish positions is waning. At this time we'd wait for a rise past $54.00 or $54.35 before initiating positions. More conservative traders might actually want to just bail out now. The technical indicators for TMO are decaying rapidly.
Picked on May 13 at $53.63
Short Play Updates
Omega Healthcare - OHI - cls: 16.25 chg: -0.33 stop: 17.05
Good news! There was no follow through on OHI's intraday bounce from Wednesday. The stock reversed lower and set a new six-month closing low. We see this as a new entry point for shorts. Our target is the $14.50-14.00 range.
Picked on May 16 at $16.24
Closed Long Plays
Closed Short Plays