Long Play Updates
LM Ericsson - ERIC - cls: 36.32 change: +0.63 stop: 33.95
ERIC turned in a strong session with a bullish breakout over short-term resistance near $36.00. This looks like another entry point for bullish positions. Our only complaint would be the below average volume. Our target is the $37.90-38.00 range. More aggressive traders may want to aim higher like the 200-dma or the $40 zone.
Picked on August 19 at $35.53
L.B.Foster Co. - FSTR - cls: 36.96 change: -0.03 stop: 34.59
Lack of follow through on FSTR's bearish reversal from Tuesday is a good sign. Yet at the same time FSTR failed to participate in today's rally, which is negative. We're not suggesting new positions at this time. We're not closing the play early because FSTR still has a bullish pattern of higher lows. We have two targets. Our first target is the $39.90-40.00 range. Our second target is the $42.00-42.50 zone.
Picked on August 14 at $37.33
Pediatrix - PDX - cls: 59.14 change: +0.14 stop: 55.90
This looks like another bullish entry point in PDX. Traders bought the dip near $58.00 and PDX looks poised to challenge the $60 level soon. Our target is the $64.50-65.00 range. More conservative traders may still want to wait for a rally past the April 2007 high at $60.35 as an entry point to avoid potential resistance at $60.00.
Picked on August 20 at $59.15
Patterson-UTI - PTEN - cls: 21.07 change: -0.06 stop: 20.74
The tug of war in PTEN should intensify. Another slide in crude oil futures weighed on the oil stocks. Yet PTEN held support at the $21.00 level. A bounce from here would be a technical buy signal. Readers may want to wait for a rise over today's high at $21.36 or a rise over $21.50 before considering new bullish positions. Investors should still keep an eye on the oil futures, which are likely to be weak short-term. This will continue to weigh on the energy stocks. Our first target is the $24.85-25.00 range.
Picked on August 12 at $22.36
Starbucks - SBUX - cls: 27.54 chg: +0.19 stop: 25.95
SBUX posted another gain but the stock under performed the S&P 500. The rebound might be looking a little tired. Don't be surprised to see a dip toward $27.00 soon. We're not suggesting new positions at this time. There is minor resistance at $27.50 and $28.00 before the stock hits our target in the $28.35-28.50 range. More aggressive traders may want to aim higher.
Picked on August 16 at $26.61
Tellabs - TLAB - cls: 10.20 change: +0.07 stop: 9.39
TLAB is still inching higher and today's close over the 10-dma is bullish. However, the intraday action doesn't look quite so bullish and shares may be poised for another dip into the $9.90-10.00 zone. More conservative traders may want to tighten their stops. Our target is the $10.90-11.00 range. This means we don't have a great risk/reward ratio so more conservative traders may want to pass on this one. Really aggressive traders may want to aim higher (maybe around $11.50).
Picked on August 19 at $10.00
Vertex Pharma - VRTX - cls: 36.96 change: -0.45 stop: 33.99
VRTX surprised us with some relative weakness on Wednesday. The stock lost 1.2% albeit on pretty low volume. At this point we'd look for a dip towards the $36.00 level soon. A bounce near $36.00 could be used as a new bullish entry point. More conservative traders may want to tighten their stops. The P&F chart is bullish with a $66 target. It would be tempting to aim for the $44-45 zone but we don't want to get greedy here.
Picked on August 19 at $36.87
XOMA Ltd. - XOMA - cls: 2.24 change: -0.035 stop: 1.99
Traders should be on their guard with XOMA. The stock failed to participate in the market's widespread rally today. A bounce near $2.15 or $2.20 could still be used as a new entry point but we're starting to think the better entry may be on a rise past $2.35. We want to remind readers that this is an aggressive, higher-risk play. We're using a wide stop and when trading a biotech there is always headline risk or some unexpected news event sending shares the opposite direction. Our target is the $2.70-2.75 under the 200-dma. Be aware that the 50-dma is falling fast and could be overhead resistance. FYI: The latest data shows that short interest is about 9% of the 95 million-share float. That's a high amount of short interest and raises the risk of a short squeeze, which of course would be good news for us!
Picked on August 19 at $ 2.25
Yahoo - YHOO - close: 23.23 change: +0.19 stop: 22.45
YHOO posted a gain but shares continued to under perform the broader market. The stock continues to look poised for a retest of support near $23.00 or $22.50. We are aiming for the $25.85-26.00 range but keep a wary eye on the falling 50-dma, which could be trouble for us. You can also see on the weekly chart that the $25.00 level may be tough resistance so we're setting a conservative target at the $24.95-25.00 range.
Picked on August 19 at $23.54
Short Play Updates
Akamai - AKAM - close: 31.89 change: +0.87 stop: 33.05
AKAM continues to bounce after hitting new lows for the year five days ago. The MACD on the daily chart has turned bullish. More conservative traders may want to exit early now to avoid any losses or tighten their stop toward the $32.65 region. AKAM appears to have short-term resistance in the $32.50-32.60 zone. We're not suggesting new positions at this time. Our target is the $28.00-27.50 zone. FYI: Traders should be aware that the latest (July) data put short interest at 6.5% of the 159 million-share float. That's a relatively high amount of short interest and increases the risk of a short squeeze.
Picked on August 14 at $32.35
Motorola - MOT - cls: 16.54 change: +0.10 stop: 17.26
MOT tried to rally today but struggled with some technical resistance near $16.70. Meanwhile after hours there was news that MOT was losing market share and the stock ticked lower toward $16.44 in after hours trading. We're not suggesting new positions at this time. If you're feeling really conservative you could tighten your stop toward $17.00 or breakeven at $16.95. Our target is the $15.10-14.50 range.
Picked on July 29 at $16.95
Closed Long Plays
BHP Billiton - BHP - cls: 59.59 change: +1.99 stop: 52.45
Target achieved. BHP reported strong earnings and the stock gapped open again in the U.S. markets. Shares opened at $59.54 and rallied to $59.93 closing just under resistance near $60.00. Our target was the $59.50-60.00 range.
Picked on August 20 at $56.35 *gap higher
Paychex - PAYX - cls: 43.97 change: -0.42 stop: 42.99
We are suggesting an early exit in PAYX. Overall we still like the trend and PAYX is still inside its narrow, rising channel. More aggressive traders may want to stick it out or instead of exiting now think about raising the stop loss to $43.49. Our concern is today's lack of participation in the market rally. PAYX produced yet another failed rally near $45 today. We're going to keep an eye on it for a breakout over $45.00 but in the mean time we're suggesting an exit to cut our losses early.
Picked on August 19 at $44.89
Closed Short Plays
Riverbed Tech. - RVBD - cls: 44.70 change: +2.80 stop: 43.05
RVBD rallied sharply today and broke through multiple levels of resistance with its 6.6% gain. The stock hit our stop loss at $43.05. One news article today suggested that a new analyst rating was the cause behind today's strength but the rating they are referring to was a "sector perform" opinion. This looks more like a short squeeze fueled by a strong market today.
Picked on August 05 at $41.79