Long Play Updates
Aracruz Celulose - ARA - cls: 60.79 chg: +1.89 stop: 57.99
Traders bought the dip in ARA again with support holding at the $58.00 level. The big bounce on Friday has produced a new bullish engulfing candlestick pattern. We would use this as a new entry point for long positions. The next level of overhead resistance is the $62.00 mark. Our target is the $68.00-70.00 range. FYI: Technical traders will note that there is a bearish divergence between price and the MACD on the weekly chart.
Picked on June 03 at $62.00
CIT Group - CIT - close: 59.50 change: +0.25 stop: 58.49
The move in CIT on Friday looks like a short-term bullish reversal. Aggressive traders might want to consider new positions here with a stop loss under Friday's low. We are going to stick to our plan and wait for a breakout above resistance. Our suggested trigger to buy CIT is at $61.75. If triggered our target is the $67.00-70.00 range. Currently the Point & Figure chart forecasts an $84 target. More conservative traders may want to exit near $65.00, which could be round-number resistance.
Picked on June xx at $xx.xx <-- see TRIGGER
EMC Corp. - EMC - close: 16.70 change: +0.27 stop: 15.99*new*
Bulls very quickly bought the morning dip in EMC at $16.26. While the MACD on the daily chart has produced a new sell signal the Friday afternoon rebound looks like a tempting entry point for new long positions. More conservative traders may want to adjust their stop toward Friday's lows. We are adjusting our stop loss to $15.99. The P&F chart has a $25.50 target. Our target is the $18.50-20.00 range.
Picked on May 27 at $16.46
Fomento Economico - FMX - cls: 38.85 chg: +0.45 stop: 37.99
FMX produced a 1.1% bounce on Friday but we are not convinced. The $38.00 level has been short-term support and thus far it's holding. Unfortunately, the rebound on Friday was anemic and volume came in below half its daily average. We suspect this is just a bounce on the way down. More conservative traders may want to exit or tighten their stops. While we are wary we're not willing to give up yet. We would hesitate to open new positions here. Our target is the $44.00-45.00 range.
Picked on June 03 at $40.44
Kansas City Southern - KSU - cls: 40.84 chg: +0.56 stop: 39.61
Bulls jumped in to buy KSU's dip at the $40.00 mark. This looks like a new bullish entry point to go long the stock. Technical indicators are mixed but KSU has not yet violated its bullish pattern of higher lows. More conservative traders may want to tighten their stops toward $40.00. Our target is the $43.50-44.00 range.
Picked on May 17 at $39.61
Pinnacle Enter. - PNK - cls: 29.50 chg: +0.03 stop: 29.95
The rebound in PNK was pitiful. Shares did bounce from its intraday lows of $29.12 but spent the rest of the session churning sideways. If we were already long the stock we'd consider exiting early thanks to Friday's relative weakness. As it stands now, with the play not triggered yet, it doesn't hurt to leave PNK on the list. However, if PNK doesn't rebound soon we'll drop it. Currently we are suggesting a trigger to buy the stock at $31.35. Our target is the $34.50-35.00 range.
Picked on June xx at $xx.xx <-- see TRIGGER
Raytheon - RTN - close: 56.64 chg: +0.59 stop: 53.95
On Thursday we suggested that readers wait and watch for a bounce near support around the $55.00 level. RTN provided one on Friday morning with a dip to $55.26. Bulls charged in and the stock was quickly trading back above $56 by Friday afternoon. We would still consider new positions here. More conservative traders might want to consider a tighter stop closer to the $55.00 level. Our target is the $59.75-60.00 range.
Picked on June 03 at $56.17
St. Mary Land - SM - cls: 37.31 chg: -0.15 stop: 36.95*new*
Most of the energy stocks, in spite of a 3% sell-off in oil, managed to bounce along with the rest of the market on Friday. SM was an exception. Shares dipped to its 200-dma near $37 before inching higher. Thursday's decline in SM was very bearish with the breakdown back below the $38 level but we're not willing to give up just yet. A rally back above $37.50 or $38.00 could be used as a new entry point. We are tightening our stop loss to $36.95. Our target is the $43.50-44.00 range.
Picked on June 04 at $38.51
Encore Wire Corp. - WIRE - cls: 29.39 chg: +0.07 stop: 27.95
Hmm... traders need to be defensive with WIRE. The widespread market rebound should have lifted WIRE from its doldrums. Instead the stock barely closed in the green on Friday. More conservative traders might want to tighten their stops toward Friday's lows near $28.70 (or maybe $28.50). We would wait for a new breakout over $30.00 or over $30.45 before considering new 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
Staples Inc. - SPLS - cls: 24.56 chg: +0.55 stop: 25.76
We have to issue another bullish reversal WARNING for SPLS. This happened on May 31st with the big rebound. SPLS continued to rally after the May 31st bounce and the stock almost stopped us out. Now shares have done it again. While the larger trend in SPLS continues to look bearish seeing two bullish reversals at the same spot in about two weeks should give any bear pause to re-think their strategy. More conservative traders may just want to exit now and limit any losses. We're going to wait and see if there is any follow through. If SPLS closes over $25.00 or $25.25 on Monday we might just bail out. We're not suggesting new plays.
Picked on May 27 at $24.40
U S T Inc. - UST - close: 51.48 chg: -0.02 stop: 55.11
We don't have anything new to report on for UST. The stock continues to under perform the market and failed to participate in the market-wide bounce on Friday. Shares are looking oversold so we're not suggesting new positions at this time. UST has already hit our target in the $52.60-52.50 range. Now we're aiming for the $50.50-50.00 zone.
Picked on May 23 at $54.96
Closed Long Plays
Trico Marine - TRMA - cls: 40.95 chg: -0.28 stop: 40.45
TRMA hit our stop loss at $40.45 on Friday. Shares posted their fifth decline in a row following the breakout to new highs June 1st. A 3% sell-off in crude oil probably influenced TRMA's relative weakness on Friday. We would keep an eye on TRMA for a bounce near $40.00 and its 50-dma or a new rally past $42.00 as a potential bullish entry point.
Picked on June 03 at $42.78
Closed Short Plays
Archer Daniels - ADM - cls: 34.54 chg: +0.84 stop: 35.55
Warning! ADM has produced a bullish reversal with Friday's big bullish engulfing candlestick pattern. Normally the pattern needs to see confirmation with another day of follow through but we don't want to risk it. The engulfing pattern is very big and shares closed up 2.49%. If you don't feel like exiting yet consider tightening your stop loss toward $35.00. Fueling the move on Friday might have been comments from OPEC and how they feel threatened by the development of biofuels. While we feel that is ridiculous the news could have been an influence on ADM. FYI: It's also worth noting that the weekly chart's latest candle is also a bullish reversal pattern called a "hammer".
Picked on June 03 at $34.59
MarineMax - HZO - cls: 21.25 chg: +0.71 stop: 21.51
We are suggesting an early exit in HZO. Actually we've been suggesting it for days but this time we're dropping the stock from the play list. The stock produced a big 3.4% rally on Friday, which also happened to be a bullish breakout over the 50-dma and a bullish engulfing candlestick pattern. More nimble traders might want to consider bullish positions if HZO can breakout past $21.50 although we'd keep a wary eye on the descending 100-dma.
Picked on May 29 at $19.95