Long Play Updates
Cicso Systems - CSCO - cls: 28.69 chg: +0.44 stop: 27.89
Friday proved to be the second trading day in a row that traders bought the dip near $28.00. The rebound looks like a new bullish entry point to buy the stock. However, readers will want to seriously consider waiting for a rise past the 200-dma (near $28.80) or the $29.00 level first. Currently we have two targets. Our first target is the $31.85-32.00 range. Our second, more-aggressive target is the $33.50-34.00 zone. Our time frame is four to six weeks.
Picked on November 18 at $29.94
CVS Caremark - CVS - cls: 41.94 change: +1.12 stop: 39.85
CVS rallied back sharply on Friday with a 2.7% gain. We're not sure we should call it a rally. It was more of a short squeeze. On November 21st Reuters published an article showing the five stocks on the NYSE with the biggest increase in short interest. CVS topped the list. Short interest as of October 31st was 37.8 million shares. Short interest as of November 15th was 67.6 million shares. That is almost six days worth of short interest. There are a lot of people betting that CVS has topped out and any further strength, especially a new high, could produce a nice short squeeze! We would be tempted to buy Friday's bounce but considering the market's trend right now we would probably suggest waiting for a rise past $42.00 or a new high over 42.50 before initiating bullish positions. Our target is the $45.85-46.00 range. Our time frame is year-end.
Picked on November 07 at $42.15
Coca-Cola - KO - close: 62.30 change: +0.05 stop: 59.59
KO has traditionally been seen as a defensive stock. With the market showing so much weakness recently shares of KO have out performed. The stock hit new multi-year highs this past week. Readers can buy the stock now or try and time an entry on a dip near $61.00. Our end of year target is the $66.00-67.00 range. The bullish P&F chart suggests a $69 target.
Picked on November 15 at $61.95
UST Inc. - UST - close: 55.15 change: +0.45 stop: 51.99
UST experienced some profit taking midday on Friday but traders bought the dip again. The stock has been showing a lot of relative strength lately. The breakout over resistance near $54 and its 200-dma is bullish. Readers can choose to buy the stock here or try and jump in on a dip near $54.00, which should be short-term support. The P&F chart's buy signal has seen the target grow from $67 to $70 this past week. Our target is the $58.00-60.00 range. We would expect some short-term resistance near $56.00.
Picked on November 14 at $54.41
Short Play Updates
Amgen - AMGN - close: 53.76 change: +0.92 stop: 56.26
The larger trend in AMGN continues to be bearish but the bounce on Friday doesn't look like it's over yet. Watch for the rebound to struggle and failed in the $55-56 zone. A failed rally there can be used as a new bearish entry point. More aggressive traders may want to keep their stop above the 200-dma (around $57.02). Our target is the $50.15-50.00 mark. More aggressive traders could aim for the August lows. The Point & Figure chart is bearish with a $39 target. Any time you play a biotech company there is a higher level of risk. You never know when there will be a positive or negative press release about some drug, some clinical trial or some news from the FDA or a rival that could send shares of a biotech stock gapping either direction.
Picked on November 11 at $54.28
W.R. Berkley - BER - close: 29.03 chg: +0.22 stop: 30.55
BER has been trying to bounce for the last three days but has run into resistance near $29.00. That doesn't mean the bounce is over yet and we wouldn't be surprised to see BER trade up into the $29.50 region. Look for the rally to fail or a new decline under $28.45 before starting new bearish short positions. Our target is the $26.00-25.50 zone. The P&F chart points to a $14 target.
Picked on November 19 at $28.40
Cousins Properties - CUZ - close: 23.58 change: +0.70 stop: 25.51*new*
CUZ managed a +3% oversold bounce on Friday but we suspect it is nothing more than another opportunity for shorts. CUZ should have resistance near $24.00 and its 10-dma near 24.43. We are adjusting our stop loss to $25.51. Our target is the $20.25-20.00 range. The Point & Figure chart points to a $12 target. The latest data puts short interest at over 10% of the 36.8 million-share float, which raises the risk of a short squeeze, especially with the stock near support.
Picked on November 19 at $23.65
Medicis Pharma - MRX - close: 25.80 change: +0.33 stop: 28.05
MRX failed to close over the $26.00 level in spite of a widespread market rebound Friday. The trend remains bearish. We would consider shorts here or on a failed rally under its 10-dma near $26.60. More conservative traders may want to tighten their stops toward $27.00. Our target is the $23.00-22.50 zone. The P&F chart is bearish with a $19 target. FYI: Any time we play a biotech stock we're dealing with a high-risk situation. MRX seems to be more of a drug company but we're still at risk that some FDA decision or some clinical trial news could send the stock gapping one direction or the other. Furthermore the most recent data puts short interest at more than 23% of MRX's 49.2 million-share float. That is a high-degree of short interest and raises the risk for a short squeeze.
Picked on November 18 at $26.08
NVIDIA - NVDA - cls: 30.22 change: +0.51 stop: 33.51
NVDA is still trying to bounce around the $30 level and its exponential 200-dma. The stock and the sector are oversold and could both see more of an oversold bounce next week but the trend for both is bearish. A failed rally under the 10-dma for NVDA near $31.25 could be a new bearish entry point but if you launch a new position there we'd suggest a much tighter stop loss. Our target remains the simple 200-dma (currently near $27.69). We will exit if NVDA trades in the $27.75-27.60 zone.
Picked on November 12 at $32.45
Trimble Navigation - TRMB - cls: 35.49 chg: +0.64 stop: 38.26 *new*
There really aren't any surprises here. We warned readers to expect an oversold bounce near $35.00. TRMB added 1.8% on Friday. We would not be surprised to see the bounce continue early next week. Wait for a failed rally, probably under $37 or its 10-dma before considering new bearish positions. We are adjusting our stop loss to $38.26. Our target is the 200-dma and we're suggesting an exit in the $33.00-32.90 zone for now. The P&F chart is bearish with a $30.00 target. FYI: Short interest looks pretty low, which is surprising and may be out of date.
Picked on November 19 at $37.25
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