Long Play Updates
Adaptec - ADPT - close: 3.20 change: -0.12 stop: 3.09
It proved to be a volatile day for ADPT. The stock spiked to $3.40 Friday morning and then reversed the remainder of the day closing with a 3.6% loss, which is a 5.8% decline from its intraday high. Shares are back to its short-term trendline of support. We are not suggesting new positions and more conservative traders might want to consider a stop loss around $3.13-3.14 instead of ours at $3.09. Our target is 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
Axsys Tech. - AXYS - close: 62.01 change: -0.59 stop: 57.39
AXYS continues to show relative strength. The stock only lost 0.9% versus the S&P 500's 3% sell-off. Shares are holding above broken resistance near $60.00. While we are encouraged by AXYS' strength we're not suggesting new bullish positions. Our target is the top of the channel in the 64.00-65.00 range.
Picked on June 01 at $59.16
BJ Services - BJS - close: 31.63 change: -0.18 stop: 29.89 *new*
Oil service stock BJS initially spiked to a new six-week high at $32.59 but then reversed course. The oil sector stocks eventually succumbed to the painful selling in the market. This does look like a short-term top and we would expect a dip back toward $31.00 in BJS. Look for a bounce near $31.00 as a potential entry point. We are raising our stop loss to $29.89. 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
AM Castle & Co - CAS - close: 31.64 change: -1.29 stop: 30.95
CAS, like most of the market, reversed most of yesterday's gains. The stock looks poised to retest the $31.00 level soon. Given the market's new posture of weakness, at least for the S&P 500, more conservative traders might want to exit early. We're going to stick with CAS for now since the bullish trend has not been broken. Wait for a bounce from $31.00 before considering new positions. An alternative would be to wait for a breakout over resistance near $33.00. Our target is the $36.50-37.00 zone, which is just under its all-time highs.
Picked on June 01 at $32.83
Mercury General - MCY - close: 51.30 change: -1.34 stop: 49.99
After MCY's rally to new five-month highs we are surprised that the stock did not see more profit taking on Friday. Shares gave back 2.5% and failed to hit its average daily volume, which is a good sign for the bulls. We remain positive on the stock but you may want to wait for a dip or bounce near $51.00 or the $50.50 area as a new entry point. 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
United States Cellular - USM - cls: 62.87 chg: -1.63 stop: 59.95
USM gapped down on Friday morning around $62.70 and tagged $62.60 before paring its losses. USM endured the market's sell-off better than most. Readers can choose to buy this dip or wait for a potential pull back toward $62.00 and buy it there. Our target is the recent highs in the $67.00-67.50 zone. More aggressive traders could aim for $70 or its 200-ema. The P&F chart is bullish with an $85 target. Bear in mind that while USM is showing some relative strength this is not a great market to be opening bullish positions. You may just want to pass.
Picked on June 01 at $62.63
Williams Cos. - WMB - close: 39.18 change: -0.19 stop: 37.75 *new*
Another new high in natural gas was overshadowed by the massive surge in crude oil. Shares of WMB was boosted by both strength in gas and a positive article by Barron's online suggesting that WMB is undervalued. Yet even these factors couldn't keep WMB's gains afloat. The stock reversed after hitting $40.58. This looks like a short-term top and we do expect a dip toward $38.50-38.00. We are raising our stop loss to $37.75. 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: 58.37 change: -1.43 stop: 56.49
A day after surging to new multi-year highs WMT suffered a 2.39% loss. This really shouldn't be a surprise and we warned readers on Thursday to wait for a dip back toward $58.00 as a potential entry point. Near $58.00 WMT should fill the gap from Thursday morning. This past month WMT has produced what appears to be a big bull flag pattern (see chart) so we remain longer-term bullish. Yet even WMT, with its relative strength, may not be able to withstand a full fledged rout in the stock market. Wait for a bounce in the $58.00-57.50 region before considering new positions. WMT has already surpassed our early target at $59.00. The Point & Figure chart points to a $68 target. We have a second, more aggressive target at $62.00.
Picked on May 22 at $56.05 /1st target exceeded
Short Play Updates
McDonald's - MCD - close: 56.95 change: -1.10 stop: 59.32 *new*
Dow-component MCD lost another 1.89% on Friday, which wasn't bad considering the 394-point sell-off in the DJIA. Shares of MCD did trade to a new relative low and the stock looks poised to dip toward its 200-dma around 56.45. We are targeting the 200-dma so we're adjusting our exit range to $56.55-56.40. More aggressive traders may want to aim lower. We are adjusting our stop loss to $59.32 (breakeven). We're not suggesting new shorts at this time.
Picked on June 01 at $59.32
Paychex Inc. - PAYX - close: 33.17 change: -0.83 stop: 35.25*new*
PAYX continues to slip lower with a bearish trend of lower highs and lower lows. We're inching our stop loss down to $35.25. More conservative traders may want to use a tighter stop loss. We're not suggesting new positions in PAYX at this time. Our target is the $31.00-30.00 zone. 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
Patterson Cos. - PDCO - close: 33.27 change: -0.84 stop: 34.51
PDCO rolled over under the top of its trading range with a 2.4% decline on Friday. This looks like a new entry point for shorts. However, PDCO does have potential support in the $33.20 zone, where it bounced on Friday. More conservative traders may want to see a new relative low under $33.00 before initiating positions. We are adjusting our stop loss down to $34.21, just above resistance near $34.20. Our target is the $30.50-30.00 zone. The P&F chart is bearish with a $28 target. FYI: The most recent data listed short interest at about 11% of the 98 million-share float. That is a relatively high degree of short interest for this stock.
Picked on June 03 at $33.42
Closed Long Plays
Holly Corp. - HOC - close: 43.72 change: -2.00 stop: 43.99
Ouch! On Thursday night I went out on a limb to buy the oil refiners. That limb splintered under the weight of $138 oil. Thursday's $5.00 rise in oil was a record-setting surge. I did not expect a $10.00+ rally again on Friday. Higher oil puts pressure on margins for the refiners and HOC's bounce from support on Thursday was quickly squashed. The stock hit our stop loss at $43.99.
Picked on June 05 at $45.72 /stopped out 43.99
Sonoco Products - SON - close: 33.16 change: -1.44 stop: 32.99
We are giving up on SON. The stock has produced its second failed rally in a week. Friday's loss was 4.1% and the stock looks poised to retest support near $32.00 and its 50-dma. We would rather cut our losses now.
Picked on June 01 at $34.62 /exiting early
WMS Industries - WMS - close: 37.04 change: -0.99 stop: 34.25
We are suggesting an early exit in WMS. The stock has struggled with resistance near $38.00 for a week and Friday's session has produced a bearish engulfing (reversal) candlestick pattern. Shares could retrace back toward technical support at its rising 200-dma near $34.90. We might want to try again on a bounce near $35.00.
Picked on May 28 at $36.05 /exiting early
Closed Short Plays