Long Play Updates
Acuity Brands - AYI - cls: 46.48 chg: -0.69 stop: 44.59*new*
For the week AYI traded sideways, much like the S&P 500. However, the reversal of Thursday's new relative high is somewhat concerning. At the same time the bounce on Friday from the $45.00 level would normally be a positive signal. We are growing more cautious here. Upward momentum has definitely slowed. Some of the short-term oscillators are not looking healthy. Meanwhile the Point & Figure chart, which tends to weed out the intraday volatility is still bullish and points to a $62 target. We are suggesting readers raise their stop loss to $44.59. If you're feeling conservative you could try upping your stop closer to the $45 level. We would hesitate to open new bullish plays here. Our first target is the $49.50-50.00 zone. The $50 level will probably be round-number resistance compounded by the 200-dma still overhead. We would suggest exiting the majority of your position here. Our second, more aggressive target is the $54.00-55.00 range.
Picked on February 5 at $45.50 *triggered
FMC Corp. - FMC - close: 56.45 chg: +0.70 stop: 53.70 *new*
Shares of FMC held up very well on Friday. The stock traded sideways maintaining its weekly gains and was on the verge of breaking out higher into the closing bell. If FMC continues to show relative strength consider buying the stock above $56.60. We have two targets. Our short-term target is the $59.75-60.00 zone. Ours second, longer-term target is the $64.00-65.00 range. The Point & Figure chart is bullish with a triple-top breakout and a $66 target.
Picked on February 19 at $56.17 *triggered/gap open
Forest Labs - FRX - close: 41.08 change: +0.24 stop: 39.65
The sideways consolidation in FRX is narrowing and this normally suggests that a breakout is virtually imminent. We suspect that the breakout will be higher following FRX's move up from its multi-month $35-40 trading range. We are waiting for a breakout over $42.00. We're suggesting a trigger at $42.15. If triggered at $42.15 our target is the $47.50-50.00 range. We do expect resistance at $45.00. This is not going to be a quick trade but a more intermediate, multi-week trade. We will try and limit our risk with a stop loss at $39.65. However, we always consider trading anything biotech related as higher-risk. One never knows when a headline will come out about some FDA decision, or important clinical trial that could send the stock gapping one direction or the other.
Picked on February xx at $xx.xx <-- see TRIGGER
General Moly - GMO - close: 11.65 change: +0.20 stop: 9.49*new*
GMO posted another gain on Friday, adding 1.7% following its two-day breakout. The stock continues to look bullish but we wouldn't want to chase it here. If you missed our suggested entry point at $10.55 then wait for a dip. Please note we are adjusting our stop loss to $9.49. 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. FYI: GMO has relatively high short interest at 7.7% of the 33.7 million-share float, which is about 7 days worth of short interest.
Picked on February 20 at $10.55 *triggered
Time Warner - TWX - close: 16.49 chg: +0.17 stop 15.45
TWX was still sinking on Friday but investors bought the dip near its 50-dma. It's common for broken resistance to become new support. The afternoon rebound could be used as a new entry point but we are a little skeptical of the market's late day strength. We suggest waiting until at least Monday midday, maybe Tuesday before considering new bullish positions here. Our target is the $17.90-18.00 range. We're using a stop loss at $15.45. More conservative traders may want to place their stop closer to $16.00.
Picked on February 17 at $16.70
Short Play Updates
Brunswick - BC - close: 16.49 chg: +0.10 stop: 18.31
BC was hitting new lows for the month before finally bouncing into the green thanks to the market-wide spike higher on Friday afternoon. The trend is still very bearish. Wait and watch for a failed rally near $17.00 as a new entry point for shorts. More conservative traders might want to think about inching their stops down a little. Our target is the $15.05-14.55 zone near its January lows. The P&F chart is bearish with an $8.00 target. FYI: We are at risk for a short squeeze. The most recent data puts short interest at 11.2% of the 87.8 million-share float. That is about 7 days worth of short interest. The stock has already slipped a lot from last week's high, which is why we have a relatively wide (aggressive) stop loss.
Picked on February 19 at $16.75 *triggered
Cintas Corp. - CTAS - close: 29.80 chg: +0.57 stop: 31.15
CTAS was trading at new multi-year lows before the market's ABK-inspired short squeeze on Friday afternoon. CTAS should find resistance near $30.00. If not look for a failed rally near $31 as a potential entry point. 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
Dean Foods - DF - close: 24.43 chg: +0.54 stop: 25.05
Friday's bounce in DF back above $24.00 puts us back in short squeeze danger. If the broader market sees any sort of rally on Monday we could be stopped out at $25.05. We're not suggesting new positions at this time but a new relative low would change our minds. Our target is the $20.25-20.00 range. FYI: The move under $24.00 has produced a new quadruple bottom breakdown sell signal. The P&F chart target is $18.00. Our biggest risk is a short squeeze. The most recent data puts short interest at 7.7% of the 127 million-share float or about 9 days worth of short interest, which is significant.
Picked on February 20 at $23.95 *triggered
PACCAR - PCAR - close: 43.50 change: +0.13 stop: 44.05
PCAR continues to bounce sideways albeit under a bearish trend of lower highs. We are still waiting for a breakdown under support. We are suggesting a trigger to short PCAR at $41.95. If triggered our target is the $38.30-38.00 zone. The Point & Figure chart is bearish with a $26 target but it does show support near $38.00. FYI: On the daily chart the intraday low for January 23rd looks like $41.58 but that appears to be a bad tick. On the chart the 200-week moving average is nearing $38.20.
Picked on February xx at $xx.xx <-- see TRIGGER
Starbucks - SBUX - close: 18.25 chg: +0.42 stop: 18.76
Shares of SBUX continue to trade under a bearish trend of lower highs. That means aggressive traders can look for the future failed rally as a new entry point for shorts. We are waiting. We're suggesting readers short SBUX with a trigger to open positions at $17.49. If triggered our target is the $15.05-15.00 zone. More aggressive traders could aim lower since the P&F chart already points to a $3.00 target. FYI: The most recent data puts short interest at 3.4% of the 703 million-share float, which is about 2 days worth of short interest.
Picked on February xx at $xx.xx <-- see TRIGGER
Terra Nitrogen - TNH - cls: 127.83 chg: -0.94 stop: 135.05
Shares of TNH did produce a brief spike over short-term resistance at $130 on Friday morning but the strength quickly faded. The stock closed in the red but for the week it was essentially sideways. If you want to reduce your risk consider adjusting your stop loss toward $131.00 (Friday's high was $130.98). We are not suggesting new bearish plays at this time. However, a move over $135 (or better $140) would look like a bullish entry point. Currently we're suggesting readers cover their shorts (exit) at $117.50-115.00. Then our follow up play is to buy the dip near its rising 200-dma. We are suggesting entries in the $116.50-115.00 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: 71.89 chg: -0.01 stop: 74.05
UPS was breaking down on Friday and had pierced its 50-dma until shares reversed sharply thanks to the market's widespread short covering on Friday afternoon. At this point we suggest readers just wait and watch to see if and when the rally fails. Our target is the $66.00-65.00 zone.
Picked on February 10 at $70.58
Xerox Corp. - XRX - cls: 14.87 chg: +0.12 stop: 16.01
Like many stocks on our bearish list XRX was hitting new lows for the month until Friday afternoon. The trend is still bearish but readers can wait for another failed rally near its 50-dma (around $15.20) before considering new shorts. We are adjusting our stop loss to $15.66. 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. FYI: XRX is due to present at the Goldman Sachs conference on Thursday.
Picked on February 07 at $14.95 *triggered
Closed Long Plays
Expedia - EXPE - close: 24.42 chg: +0.06 stop; 23.85
The rally in EXPE is in serious jeopardy. Thursday's session was terrible and the weakness continued into Friday. EXPE broke down under what should have been support near $24.00 and hit our stop loss at $23.85 closing the play. Shares did bounce thanks to the market-wide spike in the last 30 minutes otherwise the stock probably would have closed under support at $24.00. The weekly chart has produced a bearish engulfing (reversal) candlestick pattern.
Picked on February 11 at $24.25 *triggered /stopped 23.85
Microsoft - MSFT - close: 27.68 change: -0.42 stop: 27.39
I am honestly surprised at the relative weakness in MSFT, especially on Friday. The stock was breaking down and the mover under $28.00 definitely looks bad. Shares of MSFT had been consolidating along two very long-term trendlines of support. Now shares are in very real danger of breaking those trendlines. The intraday low of $27.20 was enough to stop us out at $27.39. It would probably take a move over $29.10 before we considered new bullish positions - at least at this time.
Picked on February 10 at $28.56
Closed Short Plays
Home Depot - HD - close: 27.77 chg: +0.38 stop: 29.16
We have run out of time with HD as a short play. The company is due to report earnings on Tuesday morning and we do not want to hold over the announcement. We're suggesting an immediate exit.
Picked on February 15 at $27.24 *triggered