Long Play Updates
Adaptec - ADPT - close: 3.23 change: +0.02 stop: 2.99
ADPT is holding up relatively well. The stock is still flirting with its 200-dma but at least it's above it and not below it. The trend is still positive and we would still open new positions here or on a dip near $3.15. More conservative traders may want to consider a stop loss closer to $3.05. More conservative traders might also want to wait for a rally over $3.30 as an entry point. Our target is the December 2007 highs. We'll try to exit in the $3.65-3.70 zone. The stock can be somewhat volatile so we do consider this a higher-risk play. Our time frame is several weeks. FYI: The most recent data listed short interest at more than 7% of the 118 million-share float. Based on ADPT's average daily volume that is a lot of short interest and the stock could see a short squeeze.
Picked on May 28 at $ 3.25
BJ Services - BJS - close: 30.20 change: +0.56 stop: 28.95
Bulls haven't given up on BJS yet. There was no follow through on Wednesday's rebound but investors did buy the dip on Friday. BJS seems to have found new overhead resistance at its 10-dma. Thus readers might want to wait for a new rise over $30.45 or $30.50 before initiating positions. Keep a close eye on crude oil. Even though BJS is an oil service stock if oil collapses then the entire energy sector will probably see heavy profit taking. Our initial target is the $33.00-34.00 range. The P&F chart is bullish with a $52 target.
Picked on May 28 at $30.45
Avis Budget Group - CAR - close: 13.92 chg: -0.12 stop: 13.35
CAR gave us a bit of a scare on Friday morning. The stock spiked lower for no apparent reason. We looked at news on rivals DTG and HTZ and couldn't see anything that might account for weakness in CAR. Fortunately, traders bought the dip at $13.41 and CAR rebounded throughout the remainder of the session. This intraday bounce can be used as a new bullish entry point. Or if you're feeling conservative then wait for a rise over the 10-dma near $14.28. CAR and most of the industry will be participating at a Goldman Sachs conference this week. CAR presents on June 3rd. Our target is the $15.50-16.00 range or the 200-dma, whichever comes first.
Picked on May 27 at $13.55 *triggered
Celanese Corp. - CE - close: 48.70 change: +0.93 stop: 46.85 *new*
Our patience in CE might pay off. We have been growing more and more cautious on CE but Friday's 1.9% gain is encouraging. We are adjusting our stop and adding a second target. Our new stop loss is $46.85. Last week's low was $47.19. Our first target is $49.90-50.00. Our secondary, more aggressive target is the $52.50 mark. The P&F chart is forecasting a long-term target of $74. If you are looking for a new entry point use a dip to $48.00 or a new high over $49.30.
Picked on May 11 at $46.35
Copa Holdings - CPA - close: 33.47 change: -0.56 stop: 31.40
After Thursday's big gain it's only natural to see some profit taking on Friday. The airlines were some of last week's best performers thanks to a drop in crude oil. If crude continues to slip then CPA should have no trouble hitting our target in the $34.50-35.00 zone. If oil bounces then expect CPA to hit our stop loss at $31.40. We're not suggesting new positions at this time. FYI: More aggressive traders may want to aim for $36.00 or its 200-dma near 38.45.
Picked on May 27 at $31.40
Corning Inc. - GLW - close: 27.34 chg: -0.10 stop: 26.45
Hmmm... GLW under performed on Friday. The 10-cent loss isn't that significant but shares did post what appears to be a little bearish engulfing candlestick pattern. We would expect a dip toward the $27.00 or $26.75 zone. Wait for signs of a bounce before considering new positions. Our target is the 2006 high at $29.60. FYI: The P&F chart is bullish with a $45 target.
Picked on May 27 at $27.27
General Motors - GM - close: 17.10 chg: -0.28 stop: 16.84
GM's failure to rebound on Friday is a warning sign for the bulls. We are dangerously trying to pick a short-term bottom and GM isn't cooperating. At this point we suggest more conservative traders consider an early exit to cut your losses or tighten your stop loss closer to $17.00. We'd wait for a new move over Friday's high (17.65) before considering new bullish positions. Our target is the $19.50 mark. The most recent data listed short interest at more than 17% of the 530 million-share float.
Picked on May 27 at $17.42
Mercury General - MCY - close: 50.86 change: -0.19 stop: 49.65
MCY is still out performing its peers in the insurance sector. Friday's little dip looks like a new entry point to buy the stock. Our short-term target is the $54.00-55.00 zone. The P&F chart is a lot more bullish with a $68 target.
Picked on May 28 at $50.92 *triggered/gap higher entry
Williams Cos. - WMB - close: 38.04 change: +0.29 stop: 37.25 *new*
Traders bought the dip on Friday. WMB has been able to maintain its bullish trend of higher lows. However, if you study the intraday chart we're seeing a real tug of war between the bulls and bears. WMB is a natural gas play and unfortunately natural gas will probably follow crude oil up or down this coming week. Thursday's high was $38.60. We'd wait for a rise over $38.60 before considering new positions. In an effort to reduce our risk we're raising our stop loss to $37.25. 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
WMS Industries - WMS - close: 37.04 change: +0.34 stop: 34.25 *new*
WMS dealt a strong performance with a 5% gain last week. Traders continue to buy the recent bounce from support near its rising 200-dma. We remain bullish but if you're looking for a new entry point wait for a dip. A pull back around $36 might work. Our target is the $39.50-40.00 zone. Note that we are adjusting our stop loss to $34.25.
Picked on May 28 at $36.05
Wal-Mart - WMT - close: 57.74 change: -0.34 stop: 55.85 *new*
After a strong week shares of WMT felt some profit taking on Friday. It wasn't much but it may not be over yet. It looks like shares might dip back toward $57.00 before moving higher. We are adjusting our stop loss to $55.85, just under the 50-dma. 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 $62.00 (not 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
Expeditor's Intl. - EXPD - close: 47.08 chg: +0.02 stop: 47.51
EXPD is still trading in dangerous territory for us. It looks like the rally might be running out of steam. However, if crude oil sinks again this week then we would expect EXPD to hit our stop loss at $47.51. We're not suggesting new positions at this time but a drop under $46.00 would look like a potential entry point for new shorts. We have two targets. Our first, short-term target is $42.50. Our secondary target is the $40.25 mark. The P&F chart is bearish with a $38 target. FYI: The most recent data listed short interest at 6% of the 209 million-share float.
Picked on May 28 at $45.65 *triggered
Paychex Inc. - PAYX - close: 34.55 change: -0.46 stop: 36.16
It looks like the bounce in PAYX is failing sooner than we expected. Shares are rolling over under its 10-dma. This looks like a new entry point for shorts. If you really wanted to be conservative you could put your stop loss above Thursday's high (around 35.36) but we think that's probably too close. 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
Closed Short Plays
General Motors - GM - close: 17.10 chg: -0.28 stop: 20.26
We added GM as a potential short candidate a few days ago with the expectation that we could short a bounce/failed-rally under $20.00. Thus far GM has not bounced. We still believe there might be an opportunity there for shorts under $20.00 but we're going to drop GM as a bearish candidate from the newsletter for now and just keep it on our watch list. Readers should note that we currently have a bullish play in GM as we try and capture any bounce toward the $20 area. (Why just watch it bounce toward $20 so we decided to try and capture a slice of the rebound, which hasn't happened yet.)
Picked on May xx at $xx.xx *never opened