Long Play Updates
Avis Budget Group - CAR - close: 13.74 chg: -0.63 stop: 12.99
CAR continues to skid lower. The stock lost another 4.3% on Friday but shares did not trade low enough to hit our trigger. It came close. The intraday low was $13.57. Our suggested trigger to buy CAR is in the $13.55-13.25 zone. At this point we would definitely opt for patience and try to wait for a dip near the bottom of that range (13.25) but the newsletter will consider $13.55 to be our entry point. CAR is down more than 11% from its recent highs so we're expecting a bounce soon. If triggered our target is the $15.50-16.00 range or the 200-dma, which ever comes first. The Point & Figure chart is very bullish with a $22 target.
Picked on May xx at $xx.xx <-- see TRIGGER
Celanese Corp. - CE - close: 48.71 change: +0.94 stop: 46.35 *new*
We are suggesting that readers turn more defensive on CE. The stock produced a bearish engulfing candlestick pattern on Friday and broke down under short-term support at recent trendline of higher lows. The three-month trend is still very bullish and remains intact. More aggressive traders may want to keep their stop loss under $46.00, which as broken resistance should be new support. Because we are turning more cautious we're upping our stop loss to breakeven at $46.35. If you're feeling more cautious you could place yours closer to $46.50. We're not suggesting new positions at this time. Our target is the $49.90-50.00 range. More aggressive traders may want to aim higher. The P&F chart is forecasting a long-term target of $74.
Picked on May 11 at $46.35
Perdigao - PDA - close: 58.46 change: -0.49 stop: 54.95
The trading last week has painted an ominous red candle on PDA's weekly chart. It might be compared to a "dark cloud cover" pattern but it didn't quite close low enough to really be considered a minor reversal. We suggest caution here but we're going to keep the play open. PDA's intermediate trend is still a positive one. More conservative traders may want to raise their stop loss toward the $56.00 level. If PDA doesn't rebound back above $60.00 relatively soon (a day or two) we're going to consider an early exit. Our target is $64.00.
Picked on May 13 at $57.74
Williams Cos. - WMB - close: 37.84 change: -0.56 stop: 36.99
Both crude oil and natural gas posted gains on Friday and yet the energy stocks were unable to avoid market weakness. Shares of WMB lost another 1.4% and hit an intraday low of $37.51. Our thoughts on WMB remain the same. The general trend is positive and the breakout two weeks ago was very bullish. Unfortunately it looks like WMB is going to retrace most of its move. We would wait and watch for a dip into the $37.30-37.20 zone as a new bullish entry point. More conservative traders may just want to abandon this play and take a step back to wait since the stock did not bounce as expected. Our target is the $42.00-42.50 zone. More aggressive traders may want to aim higher. The Point & Figure chart points to $56.
Picked on May 22 at $38.40
Wal-Mart - WMT - close: 55.75 change: -0.30 stop: 54.95
WMT's lack of follow through from Thursday's bounce is not a good sign for the bulls. The short-term trend remains bearish and the very short-term technicals are still suggesting further weakness ahead. At this point we suggest readers either look for a dip and bounce in the $55.15-55.00 zone or wait for a new rise past $56.25 before initiating new long positions. Our short-term target is the $59.00 level near its recent highs. More aggressive traders may want to aim higher. The Point & Figure chart points to a $68 target. We are going to tentatively set a secondary, aggressive target at $62.50 but we suggest readers take some money off the table at $59.00.
Picked on May 22 at $56.05
Short Play Updates
Paychex Inc. - PAYX - close: 34.11 change: -0.76 stop: 36.16 *new*
PAYX crumbled again on Friday with another decline. The stock lost 2.1% and came to settle on its 100-dma. The stock is arguably very short-term oversold and due for a bounce. Look for a failed rally near $35.00 or $36.00 as a potential entry point since either level could act as overhead resistance. We are adjusting our stop loss to $36.16. Our target is the $31.00-30.00 zone. The P&F chart is actually still bullish at least for now. FYI: The most recent data listed short interest at 5% of the 320 million-share float. That's several days worth of short interest.
Picked on May 22 at $34.87
Closed Long Plays
Agribusiness ETF - MOO - close: 61.55 chg: -0.60 stop: 60.75
It was a relatively volatile week for the MOO and some panic selling on Friday morning sent this agri-business ETF to an intraday low of $60.50. That was enough to stop us out at $60.75. The long-term trend still appears to be up but the momentum indicators are fading in almost every time frame. We'll keep the MOO on our watch list for another entry point down the road.
Picked on May 08 at $61.79 / stopped out 60.75
Sterlite Ind. - SLT - close: 21 29 chg: -0.82 stop: 20.95
The Indian stock market was down more than 1.5% on Friday and when trading opened here in the U.S. shares of SLT gapped open lower to adjust. We warned readers this was a risk. Unfortunately, the intraday low was $20.93 and hit our stop loss at $20.95 before rebounding from its worst levels of the day. We would still be tempted to buy this dip with a stop loss under Friday's low. However, for us this play has been closed. Fundamentally SLT seems like it's in the right sector at the right time so keep an eye on it.
Picked on May 19 at $22.25 *stopped out 20.95
Closed Short Plays