Long Play Updates
Cal-Maine Foods - CALM - cls: 16.38 chg: +0.28 stop: 14.90
CALM continues to show relative strength. The stock rose more than 1.7% on Friday with volume coming in pretty strong. Traders bought the dip near $16 late in the day. We are reiterating our previous suggestions for conservative traders to exit near $16.50 (or right here) to lock in a gain. This remains an aggressive play and CALM is short-term overbought and due for a correction although looking at Friday's action CALM looks poised to challenge $17 soon. Our target is the $17.40-17.50 range.
Picked on June 17 at $14.80
China Netcom - CN - cls: 55.75 chg: +0.04 stop: 54.90 *new*
The Chinese markets turned south on Friday with the Shanghai index plunging 2.3%. We are growing a bit more cautious on the Chinese stocks since the Shanghai index might have produced a bearish double top pattern. However, we would still be tempted to buy CN if shares bounced back above $56.10-56.25, especially now that we're raising the stop loss. Please note that our new stop is at $54.90. More aggressive traders may want to keep a wide stop since the $54.00 level should also be support. The P&F chart points to a $73 target. We're aiming for the $59.50-60.00 range. More aggressive traders could aim for the highs near $62.50.
Picked on June 17 at $55.60
Columbia Sportswear - COLM - cls: 68.68 chg: -0.17 stop: 65.95
COLM provided a rise past $69.50 but it turned into what now looks like a failed rally under $70.00. The overall trend in COLM remains bullish but short-term direction will likely be determined by what happens in the markets next week. We see different entry points depending on your trading style. You could wait for a rise past $70.00, buy another bounce over $69.00 or look for a dip back towards the rising 50-dma around $66.50. Our target is the $73.50-75.00 range. The P&F chart is very bullish with an $89 target.
Picked on June 17 at $68.54
EMC Corp. - EMC - close: 18.10 change: +0.27 stop: 17.19 *new*
EMC displayed relative strength on Friday with a 1.5% gain and a close over resistance near $18.00. We reiterate our previous suggestion that more conservative traders may want to exit now to lock in a gain. We are raising our stop loss to $17.19, just under last week's low. Our target is the $18.50-20.00 range.
Picked on May 27 at $16.46
Verasun Energy - VSE - cls: 14.48 chg: +0.74 stop: 12.89
Ethanol-related stocks were trading higher on Friday. Shares of VSE soared 5.3% and did so on strong volume. Actually volume has been strong two days in a row suggesting some strength behind this bounce. We were suggesting a trigger to buy the stock at $14.21 so the play is now open. We are using a wide (aggressive) stop loss under $13.00. We also have an aggressive target since the recent congressional energy bills have been pro-ethanol and could fuel a significant move in the sector. Our target is the $17.75-18.00 range, just under the simple 200-dma. We'll be watching the 50-dma and 100-dma as potential resistance. FYI: The P&F chart is still bearish.
Picked on June 29 at $14.21
Short Play Updates
Broadcom - BRCM - cls: 29.25 change: -0.35 stop: 31.05 *new*
Even though BRCM is winning the patent dispute versus QCOM if you compare the two stock charts it appears the markets are betting on QCOM. Shares of BRCM have broken down from a multi-week trading range near $30.00. Technicals have turned bearish. We are suggesting shorts with BRCM under $30.00. More conservative traders may want to tighten their stops toward the $30.50 level. We're going to adjust our stop to $31.05. Our target is the $27.00-26.00 range. The P&F chart has turned bearish with a $24 target. FYI: One of the larger risks with shorting BRCM will be any sort of headline-making news events in the legal battle between BRCM and QCOM.
Picked on June 25 at $29.75
Continental Airlines - CAL - cls: 33.87 chg: -0.22 stop: 35.26
There was no follow through on Thursday's upgrade-induced rally in CAL. Airlines turned lower thanks in part to a rally in crude oil. Unfortunately, we cannot comfortably suggest new shorts here since CAL bounced on Friday after it "filled the gap" from Thursday morning. The six-month trend in CAL is still bearish but short-term the bears are having a hard time reasserting control. Resistance at the $35.00 level has been holding for the last couple of weeks and conservative traders may want to inch their stops even closer to the $35 level. Another failed rally pattern under $35 could be used as an entry point. Our target is the $30.50-30.00 range. We do not want to hold over the mid July earnings report.
Picked on June 12 at $34.10
Healthcare REIT - HCN - cls: 40.36 chg: +0.19 stop: 42.01
After three weeks of declines HCN was due for a bounce. The question is whether Friday's failed rally pattern under $41.00 was the end of that bounce. Short-term technicals are trying to look positive given this past week's rebound but the trend is still bearish. Another drop under $40.00 would look like a new entry point for shorts. More conservative types may want to tighten their stops toward $41.00 or at least to breakeven. Our target is the $38.50-38.00 range. The P&F chart points to a $32 target.
Picked on June 11 at $ 41.73
Staples Inc. - SPLS - cls: 23.73 chg: -0.45 stop: 25.15
Negative comments from Office Depot about their same-store sales falling four to five percent undermined the industry. Shares of SPLS gapped down and closed near their lows for the session. Friday's decline under $23.85 looks like a new entry point for shorts. Readers may want to tighten their stops. Our target is the $22.00 mark.
Picked on May 27 at $24.40
Closed Long Plays
Closed Short Plays
U S T Inc. - UST - close: 53.71 chg: +0.61 stop: 54.51
We are giving up on UST. If you look at the weekly chart for UST the stock has produced a bullish reversal style engulfing candlestick pattern. The daily chart also shows a bullish breakout over its bearish trend of lower highs. More aggressive traders may want to ride it out since UST will probably have resistance at its 50-dma near $54.65 but this would require an adjustment to your stop loss placement. UST hit our conservative target in the $52.60-52.50 range weeks ago. Our aggressive target was the $50.50-50.00 zone.
Picked on May 23 at $54.96