Long Play Updates
Business Objects - BOBJ - cls: 40.10 chg: -1.01 stop: 38.95
Trading in BOBJ was bearish on Friday. The stock plunged 2.45% and broke down under its rising 10-dma. Shares under performed both the broader market and the GSO software index. We didn't see any news to account for the big pull back. There was a headline that BOBJ had completed its $300 million deal to buy Paris-based Cartesis but this should have been old news since the acquisition was announced back in April. More conservative traders may want to just exit early since Friday's session is technically a bearish engulfing candlestick pattern. An alternative would be to raise your stop loss to the $39.45 mark or the $39.80 mark; either would be just under potential short-term support. We're not suggesting new positions at this time. Our target is the $44.00-45.00 range. The P&F chart is bullish with a $53 target. FYI: BOBJ remains a takeover target.
Picked on May 21 at $40.15
EMC Corp. - EMC - close: 16.83 change: -0.06 stop: 15.85
EMC had a good week with a new multi-year high over $17.00. However, it looks like shares are seeing some consolidation and could trade lower toward $16.50 or its 10-dma near $16.35. We would wait and watch for a bounce before opening new long positions. The P&F chart has seen its bullish price target rise from $24.00 to $25.50 over the last week. Our target is the $18.50-20.00 range.
Picked on May 27 at $16.46
Gerdau Ameristeel - GNA - cls: 16.01 chg: +0.37 stop: 14.95
GNA managed to tag new relative highs this past week. We're also encouraged at how traders continue to buy the dips at GNA's rising 10-dma. Volume on Friday's 2.3% rally was above average, which is positive. If you're considering a new position now we would suggest a tighter stop loss. Our target is the $17.50-18.00 range. The P&F chart has seen its bullish price target rise from $29.00 to $32.50 this past week. This remains a higher-risk, speculative play. Some of the technical indicators are suggesting the next move "should" be down. There is no denying that GNA looks overbought here.
Picked on May 20 at $15.23
Kansas City Southern - KSU - cls: 42.50 chg: +1.45 stop: 39.45*new*
This past week was very bullish for the transportation stocks. The Dow Jones Transportation average broke out over resistance near the 5250 level and hit new all-time highs. The railroads were a definite part of that rally. KSU also broke out to new all-time highs. Volume has been strong the last few days, which is bullish. We're raising our stop loss to $39.45. Our target is the $43.50-44.00 range. Currently the P&F chart points to a $45 target. We are not suggesting new positions at this time.
Picked on May 17 at $39.61
Superior Energy - SPN - cls: 39.90 chg: -0.26 stop: 37.99
We are urging readers to use some caution with SPN. You might want to consider an early exit. Most of the energy stocks were trading higher on Friday thanks to a $1.00 rally in crude oil futures. Yet SPN under performed and closed lower. Furthermore some of the short-term technicals are suggesting that SPN has further to fall. We would expect a dip toward $39.00 and potentially toward the $38.00 level. We're not suggesting new positions at this time. Our target is the $42.50 mark. The P&F chart is very bullish with a $65 target.
Picked on May 13 at $38.42
Encore Wire Corp. - WIRE - cls: 29.82 chg: +0.77 stop: 27.95
Friday turned out to be a bullish session for WIRE. Shares broke out from their sideways consolidation and traded to an intraday high of $30.43. While we are disappointed that the stock did not hold its intraday gain over the $30.00 level shares still closed up 2.6% and on strong volume. Friday's move looks like a new entry point for bullish positions. We are suggesting new plays here. However, you can choose to wait for a dip back toward the $29.25-29.50 zone or a new relative high over $30.45 before initiating positions. The Point & Figure chart suggests a $46 price target. We are targeting the $32.50-33.00 range.
Picked on May 27 at $29.26
Short Play Updates
MarineMax - HZO - cls: 21.05 chg: +0.27 stop: 21.51
We are repeating our warning from early this week. HZO has bounced very sharply and while the trend is still bearish the stock looks poised to breakout higher. HZO sprinted higher in the last couple of hours on Friday to close over the $21.00 level. Yet the stock has a trendline of resistance and its 50-dma still overhead. More conservative traders may just want to exit early right here to cut their losses. We're going to stick it out and see what happens but we're not suggesting new positions. 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.
Picked on May 29 at $19.95
Staples Inc. - SPLS - cls: 25.37 chg: +0.34 stop: 25.76
Ouch! SPLS surged another 1.2% and posted its third gain in a row. Volume has been above average for all three days of gains and that is bad news for the shorts. The sharp rebound makes the Tuesday dip under $24.00 look like a bear trap and we were caught in it. It is noteworthy that the rally on Friday stalled under technical resistance near its 50-dma and 200-dma. While that is technically a bearish sign we're still in the red. The intraday high on Friday was $25.70 and it won't take much more to stop us out. We're not suggesting new positions at this time but if SPLS turns south a drop under $24.50 would look like a new entry point.
Picked on May 27 at $24.40
U S T Inc. - UST - close: 54.31 chg: +0.92 stop: 55.65
UST under performed the markets all week and then suddenly spiked higher on Friday to close up 1.7%. We couldn't find any specific news or event to account for the strength on Friday. It's probably some short covering with traders feeling nervous given the market's new highs. UST does have a decent amount of short interest with the latest data putting short interest near 6% of the 159 million-share float. We would watch for a failed rally under $55.00 as a new entry point for shorts. More conservative traders might want to tighten their stops toward $55.00. The P&F chart has a bearish signal with a $47 target. We have two targets. Our conservative target is $52.60-52.50. Our more aggressive target is the $50.50-50.00 range. FYI: More aggressive traders might want to give UST more room to maneuver and leave their stop above $56 or its 200-dma.
Picked on May 23 at $54.96
Closed Long Plays
Anheuser Busch - BUD - cls: 54.01 chg: +0.67 stop: 49.75
Target achieved. It has been a monumental week for BUD. Shares have rallied strongly the last four days in a row on huge volume. Two weeks ago the stock look poised to turn lower and challenge support at its 200-dma. Now shares are breaking out to new two-year highs. Our target was the $53.85-54.00 range. More nimble traders may want to let it ride and just keep inching up their stops. We'll keep an eye on BUD for a new entry point.
Picked on May 06 at $50.50
Closed Short Plays