Long Play Updates
Gold Miner ETF - GDX - close: 52.39 change: -2.58 stop: 49.45*new*
We knew gold was likely to correct near $1,000 an ounce, which was why we were at first looking for a dip near $50 in the GDX. When gold and the GDX broke out past resistance we adjusted our suggested entry in the GDX to $53.50-52.50. That level was hit today but I'm going to suggest that we may have been too eager to adjust our entry point. The GDX could have support near $51.50-52.00 in addition to technical support at its rising 50-dma around $51.00 but odds look good the GDX will dip to $50.00 anyway. I am going to suggest the following. If you do not want to endure another 5% drop in the GDX then exit immediately (assuming you entered today) and just wait for that bounce near $50 like we originally planned. Our stop loss at $49.90 may actually be too tight since the current market environment tends to see equities overreact. If you're going to stick with this play we're going to get more aggressive and put the stop at $49.45 instead. Our target is the $59.00-60.00 zone. FYI: The Point & Figure chart for the GDX is sporting a bullish triangle breakout with a $79 target.
Picked on March 18 at $53.50 *triggered
Pengrowth Energy Trust - PGH - cls: 19.11 chg: +0.35 stop: 17.89
PGH is not a very "exciting" stock and it was ignored for all the big movers in today's market rally. Shares posted a 1.8% gain. We remain bullish on the oil sector and PGH continues to look attractive here. More conservative traders might want to consider a stop loss near $18.40-18.50. The stock should be defensive given the big dividend. This trust has a dividend in excess of 14% a year and pays out every month. There is potential resistance near $20.00 but we anticipate holding this stock for a while. Our target is the $21.85-22.00 zone.
Picked on March 09 at $18.85
Short Play Updates
Akamai Tech - AKAM - close: 31.40 chg: +1.71 stop: 32.55 *new*
We do think the market has put in a short-term bottom here. I would seriously consider abandoning this short in AKAM right here and cut your losses early. However, the stock has resistance near $32.00 so we're adjusting our stop loss to $32.55 instead. We are not suggesting new bearish positions. We have two targets. Our first target is the $27.75-27.50 zone. Our second target is the $25.50-25.50 range. FYI: Traders need to know that the most recent data puts short interest in AKAM at more than 12% of the 161.6 million-share float. That is an above average amount of short interest and raises our risk for a short squeeze!
Picked on March 16 at $31.19
Cintas Corp. - CTAS - close: 28.53 chg: +0.54 stop: 29.75
Wednesday is our last day for the CTAS short. We are planning to exit at the closing bell to avoid holding over earnings. Given the bounce today readers may want to exit early tomorrow morning instead. Wall Street is looking for a profit of 54 cents a share.
Picked on February 15 at $29.75 *triggered
Group 1 Auto - GPI - close: 23.87 chg: +1.43 stop: 24.51
Most of today's 6% gain in GPI is probably short covering. Volume behind today's move was very low, which does not suggest a lot of power behind the move. While we are going to keep the play open our market bias has changed and more conservative traders may want to cut their losses early right here. FYI: It is very important that readers note the high short interest in GPI. The most recent data lists short interest at more than 21% of the 20.8 million-share float. That's a high amount of short interest and a small float, which significant raises our risk for a short squeeze.
Picked on March 16 at $22.92
Starbucks - SBUX - close: 18.24 chg: +0.98 stop: 18.55
We still believe that the recession story is going to push SBUX to new lows this year but short term we are in danger of being stopped out at $18.55 on additional short covering. Today's close over $18.00 is a bad sign for the bears even though SBUX is still stuck in a trend of lower highs. Volume behind today's move was above average, which is another warning sign for the bears (and a positive sign for the bulls). We are not suggesting new shorts. More conservative traders may want to exit early right here! 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 March 07 at $17.49 *triggered
Safeway Inc. - SWY - close: 28.27 change: -0.79 stop: 30.26*new*
Our market bias has changed but SWY remains in a very bearish pattern. We're not suggesting new shorts but we are moving the stop down to $30.26. There appears to be some support near $26.00 so we are suggesting a target in the $26.50-26.00 zone. The P&F chart is bearish with a $22.00 target. FYI: The latest data puts short interest at 3.9% of the 437 million-share float, which is about 4 days worth of short interest.
Picked on February 29 at $28.74
Closed Long Plays
Closed Short Plays
Coach Inc. - COH - close: 28.62 chg: +1.69 stop: 31.31
We are suggesting an early exit in COH. I still think COH is going to see lower lows this year. If we are in a consumer-lead recession then a luxury good retailer like COH is going to have a hard time. However, short-term the stock will probably rise on short covering. More aggressive traders could stick it out and just watch potential resistance levels near $29.00 and again near $30.00. We will be watching for another play in COH down the road.
Picked on March 09 at $28.46 /exiting early 28.62
eBay Inc. - EBAY - cls: 27.55 chg: +1.78 stop: 28.15
We do think the market has put in a short-term bottom. While that probably won't help EBAY's auction business it has spooked the shorts. The stock rallied almost 7% today and broke through some minor resistance levels. Shares are now challenging the 50-dma. We are suggesting an early exit now to cut our losses and get out.
Picked on March 09 at $25.78 /exiting early 27.55
SanDisk - SNDK - close: 22.59 change: +0.99 stop: 24.01
We are suggesting an early exit in SNDK. We'd rather readers exit now and still try to pocket some sort of gain than see it all vanish as the rebound continues. SNDK has built a potential (short-term) bullish double-bottom near $21 and the stock looks poised to bounce higher even if it's just a correction before rolling over again. It could be a correction back to $25 and we'd rather get out now and look for new shorts down the road.
Picked on February 29 at $23.99 *triggered /exiting early 22.59