Long Play Updates
Arch Coal - ACI - close: 40.56 change: +0.10 stop: 37.95 *new*
ACI displayed some relative strength and managed to hold support at the $40.00 level. While we are encouraged by the positive close we are not suggesting new positions. Please note that we're adjusting the stop loss to $37.95. More conservative traders may want to do some profit taking right here. Our target is the $42.50-45.00 range.
Picked on May 09 at $38.44
Business Objects - BOBJ - cls: 39.29 chg: -0.83 stop: 38.75
Tech stocks were a major drag on the market today. The GSO software index fell 2.49%. Shares of BOBJ followed with a 2% decline. The stock has fallen toward support near $39.00. Normally we'd look for a bounce here as a potential entry point. Unfortunately, we're not very optimistic. The recent move looks like a bearish failed rally and a double-top pattern compared to the December 2006 peak. Readers may want to exit early or tighten their stops even closer to the $39.00 level.
Picked on May 21 at $40.15
British Amer. Tob. - BTI - cls: 65.85 chg: +0.55 stop: 62.85
BTI displayed relative strength with a 0.8% gain and another new high. The stock might be getting a boost since tobacco stocks are normally seen as "safe haven" plays when the market or the economy turns south. 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: 51.28 chg: -0.07 stop: 48.95
Traders bought the dip in BUD near $51.00 twice today. Given the market weakness we would still expect a dip toward what should be support near $50.50. Investors should note that it could take several weeks before shares hit our target in the $53.85-54.00 range.
Picked on May 06 at $50.50
Columbia Sportswear - COLM - cls: 66.55 chg: -0.48 stop: 63.39
COLM is holding up relatively well with a minor decline on Thursday. A bounce near $66.00 or the $65.00 levels could be used as a new entry point. However, given the market's new bearish tone, traders may want to avoid new bullish positions. Our target is the $69.85-70.00 range. More aggressive traders may want to aim higher given the trend.
Picked on May 21 at $66.25
ENSCO - ESV - close: 58.04 change: -1.90 stop: 55.85
Oil stocks suffered a one-two punch today. The market was weak and crude oil fell 2.3%. ESV endured a triple-whammy with additional bad news from the analyst community. One analyst firm downgraded multiple oil service stocks and ESV was one of them. Shares fell 3.1%. We are not suggesting new positions and traders may want to exit early or raise their stop toward breakeven. Our target is the $61.50-62.00 range.
Picked on April 29 at $56.84
Gerdau Ameristeel - GNA - cls: 15.29 chg: -0.53 stop: 14.49
After hitting new highs this week GNA finally hit some profit taking. The stock lost 3.3% during today's market sell-off. The next level of support is the rising 10-dma near round-number support at the $15.00 mark. More conservative traders may want to tighten their stops toward $14.75 or toward $15.00. We're leaving ours at $14.49 for now. This remains an aggressive, speculative play. Our target is the $17.50-18.00 range. The P&F chart points to a $29 target.
Picked on May 20 at $15.23
Kansas City Southern - KSU - cls: 39.97 chg: -0.79 stop: 37.75
Railroad stocks have been sliding all week. KSU, which had been out performing its peers, finally turned with today's 1.98% decline. The move today looks like a short-term bearish reversal. Watch for broken resistance near $39.50 to act as support. More conservative traders may want to raise their stops. We're not suggesting new positions at this time. 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
Superior Energy - SPN - cls: 38.52 chg: -1.70 stop: 37.99
Ouch! SPN has now erased almost all of our potential gains. The stock plunged 4.2% on Thursday. SPN wasn't downgraded but one firm cut their rating on five oil service stocks today. A 2.3% drop in crude oil futures didn't help either. A bounce from here could be used as a new entry point but we'd wait for a rise past $39.00 before even considering new positions. 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
Short Play Updates
MarineMax - HZO - cls: 20.22 chg: -0.51 stop: 21.51
The bounce continues to roll over in HZO. Shares are nearing a breakdown under support at the $20.00 level. Aggressive traders may want to short it here. We are suggesting a trigger to short HZO at $19.95, which is under round-number support at $20.00. Our target is the $17.75-17.50 range. It is VERY important that traders realize HZO has a high amount of short interest. The latest data put short interest at $28% of the 16.8 million-share float. That's a lot of short interest and a small float. Unfortunately, that can be a recipe for a big short squeeze and our stops may not help in what your broker will call a "fast market". More conservative traders may want to pass on this one.
Picked on May xx at $xx.xx <-- see TRIGGER
U S T Inc. - UST - close: 54.36 chg: -0.60 stop: 56.21
The sell-off in UST continues. The stock lost over 1% and hit a new six-month low on an intraday basis. We don't see any changes from our Wednesday comments, which we are reposting here: The daily chart has produced a bearish double-top pattern with the February and April peaks. Now the recent oversold bounce has stalled with multiple failed rallies under technical resistance at the 200-dma. Volume is creeping higher this week and we expect the next move to be down. We are suggesting shorts right here with a tight stop loss at $56.21. More conservative traders may want to use a trigger under the May low (54.34) before opening positions. A breakdown under $54.00 would produce a new Point & Figure chart sell signal. We have two targets. Our conservative target is $52.60-52.50. Our more aggressive target is the $50.50-50.00 range.
Picked on May 23 at $54.96
Closed Long Plays
GulfMark - GMRK - cls: 49.97 chg: -1.98 stop: 49.49
We are calling it quits with GMRK. Oil service stocks were weak after one analyst firm downgraded several of them today. GMRK was not downgraded but shares fell 3.8% and on above average volume. The move today broke GMRK's bullish trend and the close under $50.00 is also bearish. We would rather cut our losses and step back to see where oil and the markets go next.
Picked on May 20 at $51.75
China Life Ins. - LFC - cls: 46.61 chg: -1.62 stop: 47.94
It was a rough day for LFC. The stock gapped open lower at $47.53, bounced back to $48.00 and then turned south again. Shares plunged toward the April and May lows and its rising 100-dma. Sparking the sell-off in LFC and many of the Chinese stocks was news that the Chinese government has asked brokerage firms to warn investors about the risks of trading in the stock market. Sounds like they're trying to get ahead of the bubble bursting. If you haven't heard the Shanghai A-share index is up 55% this year while the Shanghai B-share market, which is open to foreign investors, is up 129% this year (source: CBSMarketwatch). Our stop loss on LFC was $47.94 but due to the gap open lower we would have been taken out at $47.53.
Picked on May 13 at $50.27
McGrath RentCorp - MGRC - cls: 30.11 chg: -0.82 stop: 29.89
We are dropping MGRC as a bullish candidate. It was our plan to capture a breakout over significant resistance near $32.00 but we've been waiting for days and it doesn't look like it's going to occur any time soon. Our suggested trigger to open positions was at $32.35.
Picked on May xx at $xx.xx <-- see TRIGGER
Closed Short Plays