Long Play Updates
Affymetrix - AFFX - cls: 25.11 chg: -0.20 stop: 23.95
The rebound in the BTK biotech index is rolling over and that's going to put pressure on AFFX. We suggested longs on the recent bounce from support near $24.00 but Friday's move looks like a short-term failed rally. The stock might see another dip toward the $24.00 level again. Wait and watch for another bounce near $24 as a new entry point to buy AFFX. Keep an eye on the BTK biotech index as well, which currently has support near the 740 level. Our AFFX target is the $26.85-27.00 range. More aggressive traders may want to aim higher.
Picked on August 1 at $24.37
JP Morgan - JPM - cls: 43.65 change: -0.94 stop: 42.95 *new*
Warning! The bounce in JPM is in real danger. Financial stocks were once again a dead weight around the markets dragging them lower. Negative comments from Bear Stearns (BSC) impacted the entire market. Shares of JPM produced a bearish failed rally pattern under its 10-dma. We strongly suggest that more conservative traders cut their losses right here! Odds are very good that JPM will breakdown to a new relative low on Monday and stop us out. We're actually raising our stop loss to $42.95 to reduce our exposure. We're not suggesting new positions.
Picked on July 30 at $43.70
Varian Inc. - VARI - cls: 59.55 chg: -1.23 stop: 57.90 *new*
While VARI has held up relatively well considering the market's turmoil recently the stock now looks vulnerable to more profit taking. The stock lost 2% and appears poised to drop toward $58.00. We're raising our stop loss to $57.90. Given the close under what should have been support near $60.00 more conservative traders may want to exit early and cut their losses now. We're not suggesting new positions at this time.
Picked on July 27 at $60.66
Short Play Updates
Agilent Tech - A - cls: 37.98 change: -0.64 stop: 39.05
Friday's 1.6% decline in A appears to confirm Thursday's failed rally pattern under $39.00. Volume came in pretty strong on Friday's drop, which is another bearish sign. This looks like a new entry point for shorts. However, traders should remember that we only have six trading days left before we plan to exit and avoid the company's earnings report. Our target is the $35.50-35.00 range. The rising 200-dma near $35.00 could be technical support.
Picked on July 29 at $37.64
Saul Centers - BFS - cls: 43.37 change: -0.53 stop: 45.05*new*
It looks like the oversold bounce in BFS is fading. Readers can use this as a new bearish entry point for shorts. Conservative traders could tighten their stops toward Thursday's high (44.55) if they felt the need. Our target is the $40.15-40.00 range. FYI: Readers should note that the latest June data put short interest at 4.8% of the company's 10.7 million-share float. That is relatively high short interest and a very small float, which could be a recipe for a short squeeze. Trade carefully!
Picked on July 25 at $43.76
Mattel - MAT - cls: 22.72 change: -0.46 stop: 24.68 *new*
MAT spent most of Friday bouncing around the $23.00-23.40 range but eventually turned lower with the market's collapse. The stock looks poised to fall toward $22.00. Please note that we're adjusting the stop loss to breakeven at $24.68. Our target is the $22.05-22.00 range. We're not suggesting new positions at this time.
Picked on July 22 at $24.68
Motorola - MOT - cls: 16.35 change: -0.54 stop: 17.55 *new*
MOT lost another 3.2% and closed near multi-year lows. Shares look very bearish following the late July breakdown from its trading range. Investors might be worried that MOT is losing to NOK. We are adjusting our stop loss to $17.55. If you are looking for a new entry point for shorts Friday's decline could work but you may want to use a tighter stop loss. Our target is the $15.10-14.50 range.
Picked on July 29 at $16.95
UnitedHealth - UNH - cls: 47.50 change: -0.86 stop: 50.26 *new*
UNH continues to show weakness. The stock produced a big failed rally pattern on Friday but the intraday high at $49.25 looks like a bad tick. Checking an intraday chart will show you that UNH struggled under $48.75 almost all day. The stock looks poised to continue lower on Monday. More conservative traders might want to consider an early exit near $46.00. Our target is the $45.25-45.00 range. The P&F chart is already bearish and points to a $46 target. FYI: Please note that we're adjusting the stop loss to $50.26.
Picked on July 26 at $49.95
Energy Sector SPDR - XLE - cls: 66.12 chg: -2.23 stop: 71.05 *new*
Oil and energy stocks continue to suffer on Friday. The OIX oil index lost 3.5%. The OSX oil services index broke down sharply losing 3.6%. The XLE followed suit with a 3.2% decline on big volume. If the XLE can trade under $66.00 it will produce a brand new triple-bottom breakdown sell signal on the P&F chart. We are not suggesting new positions but we are adjusting the stop loss to $71.05. Our target is the $65.25-65.00 range. We are adding a second, more aggressive target at $62.50, above the rising 200-dma. You may want to sell a large portion of your position at the first target and speculate on our second target.
Picked on July 26 at $69.75
Closed Long Plays
Gateway Inc. - GTW - cls: 1.24 change: -0.09 stop: 1.27
Our speculative play in GTW did not pan out very well. The post-earnings sell-off continued into Friday. Shares hit our stop loss at $1.27 before 10:00 a.m. Volume continues to be very high, which is bad news for shareholders.
Picked on August 2 at $ 1.35
Closed Short Plays
Steel Dynamics - STLD - cls: 39.94 change: -2.44 stop: 45.15
Target achieved (and exceeded). STLD plunged 5.7% on Friday breaking down from its recent sideways consolidation. Our target was the $40.50-40.00 range. Shares are now resting new potential round-number support near $40 and technical support at its rising 200-dma. This would be a good spot for a bounce.
Picked on July 25 at $44.93