Long Play Updates
Acuity Brands - AYI - cls: 46.42 chg: +0.50 stop: 43.49
AYI displayed some strength on Friday after traders bought the dip near $45.00 again. This is a good sign following Thursday's short-term reversal lower. We suggested that a bounce near $45.00 was a new entry point. Our target is the $49.50-50.00 zone. The Point & Figure chart looks very bullish with a $62 target and a breakout over resistance.
Picked on February 5 at $45.50 *triggered
Expedia - EXPE - close: 25.59 chg: +0.60 stop; 23.39
Strength in shares of rival Priceline.com (PCLN) may have accounted for some of EXPE's rally on Friday. PCLN surged more than 21% to $123.86 following a better than expected earnings report on Thursday night. The stock (PCLN) was heavily shorted and they got squeezed on Friday. Shares of EXPE also have decent short interest (about 7 days worth of short interest) and Friday's solid close over $25.00 could spark more short covering in EXPE. We would still consider buying dips in the $25.00-24.75 zone. More conservative traders might want to consider a tighter stop near $24.00. Our target will be the $27.00-27.50 zone.
Picked on February 11 at $24.25 *triggered
General Moly - GMO - close: 9.95 change: -0.03 stop: 9.18
Speaking of stocks with short interest, GMO's short interest is about 9% of its 33.7 million share float or close to 7.5 days worth of short interest based on average volume. If the stock could breakout GMO could easily see some short covering. More aggressive traders might want to jump in early near $10.25. We still see some resistance at the 50-dma (10.49) so we're suggesting readers use a trigger at $10.55. If triggered we have two targets. Our first target is the $12.40-12.50 zone near its December highs. Our second, more aggressive target is the $13.90-14.00 range. We are starting with an aggressive (wide) stop. You may want to adjust yours.
Picked on February xx at $xx.xx <-- see TRIGGER
Microsoft - MSFT - close: 28.42 change: -0.08 stop: 27.39
I think the only reason that MSFT hasn't performed better this past week is the cloud surround the MSFT-YHOO deal. There is a large and vocal camp of investors and industry insiders who believe that MSFT will eventually raise their bid for YHOO into the $33-34-35 zone and that all the drama this past week is just YHOO stalling and playing hard to get so that MSFT will raise its bid. Yet the market doesn't know for certain that MSFT will raise the bid or how much they will raise the bid so shares of MSFT have been trading sideways. Part of the risk for us, if you're holding MSFT shareholders, is an intraday spike lower, some sort of knee-jerk reaction that stops us out, if and when MSFT does bid higher for YHOO. We would remain buyers here in the $27.50-29.50 region. We have two targets. Our four to six week target is the $31.85-32.00 range. We are considering a longer-term target in the $34 region.
Picked on February 10 at $28.56
Short Play Updates
Cintas Corp. - CTAS - close: 29.78 chg: -0.22 stop: 31.15
Weakness in shares of CTAS continued on Friday. The stock broke down under support near $30.00 to hit new multi-year lows. We were suggesting a trigger for shorts at $29.75 so the play is now open. Our short-term target is the $27.00-26.00 range. The P&F chart is bearish with a $24 target. FYI: The most recent data puts short interest at 1.7% of the 131 million-share float. That is a short ratio of 1.5 (about 1.5 days worth of average volume to cover).
Picked on February 15 at $29.75 *triggered
Home Depot - HD - close: 27.52 chg: +0.01 stop: 29.16
Friday's session saw shares of HD breakdown under short-term support at $27.50 and its 50-dma. The stock quickly hit our suggested trigger to short it at $27.24. Unfortunately for the bears there wasn't much follow through. Traders bought the dip at $27.00 and the stock closed almost exactly at the $27.50 strike price for option expiration. We would watch for a bounce from here and a failed rally in the $28.00-28.15 zone can be used as a new entry point for shorts. Our target is the $25.10-25.00 zone. You could aim for $24.00. The P&F chart is bearish and points to a $21 target. FYI: We don't have much time. There is less than two full weeks before HD reports earnings. We do not want to hold over the announcement. The most recent data puts short interest at 4.3% of the 1.67 billion-share float. That happens to be about 4 days worth of short interest.
Picked on February 15 at $27.24 *triggered
Terra Nitrogen - TNH - cls: 124.29 chg: -3.05 stop: 135.05*new*
TNH continues to under perform its peers. The stock lost another 2.3% on Friday. Although it is worth noting that shares were on the rebound Friday afternoon. We would not be surprised to see a bounce back toward $127-129. We are going to adjust our stop loss to $135.05. More conservative traders may want to use a tighter stop but remember TNH and the whole sector can be very volatile with some huge intraday swings. Currently we're suggesting readers cover their shorts (exit) at $117.50-115.00. Then we're suggesting readers buy the dip near its 200-dma in the $116.00-114.00 zone. We have two bullish targets on the bounce. One at $129 and then at $139, which is an adjustment to our previous targets. Once the bullish play begins our stop loss will be $109.45. Meanwhile the latest data puts short interest at 3% of the very (VERY) small float of 4.8 million share. A 3% short interest is not normally that worrisome but that is a very small float and raises the risk of a short squeeze.
Picked on February 07 at $129.40
United Parcel Ser. - UPS - cls: 72.42 chg: +0.08 stop: 74.05
UPS' two trends are colliding. The stock's longer-term bearish trend of lower highs is running into the stock's more short-term bullish trend of higher lows. Right now we're seeing the battle back and forth in the $70-74 zone. Friday's intraday breakdown under $72.00 was not very convincing. Look for a new drop under $71.50 before considering new shorts. Our target is the $66.00-65.00 zone.
Picked on February 10 at $70.58
Xerox Corp. - XRX - cls: 14.92 chg: -0.09 stop: 16.01
Weakness on Friday morning sent XRX to $14.75. The new drop under $14.90 was our suggestion for new bearish positions. We would still consider new shorts here under $15.00. We are seriously considering an adjustment to our stop loss to $15.55 but we'll leave it at $16.01 for now. Our short-term target is the $13.55 mark. XRX's Point & Figure chart is bearish with a $10.50 target. The most recent data listed short interest at just 0.6% of the float.
Picked on February 07 at $14.95 *triggered
Closed Long Plays
Varian Semi. - VSEA - close: 33.74 change: -1.30 stop: 33.45
Semiconductor stocks under performed the market on Friday and VSEA helped lead the group lower with a 3.7% sell-off. We could not find any specific news to account for the sharp decline in VSEA on Friday morning but traders did buy the dip at $33.00. Unfortunately, we had set our stop loss at $33.45. The play was triggered on Wednesday with the bullish breakout over the 50-dma but the stock and the sector has reversed sharply since then.
Picked on February 13 at $35.75 *triggered /stopped 33.45
Closed Short Plays