Long Play Updates
AMR Corp. - AMR - close: 11.43 change: +0.31 stop: *see details*
There is a good possibility that the airline stocks will see a correction before moving higher again. Right now we're suggesting readers wait for a dip back into the $8.60-8.40 zone to buy the stock. If you don't want to wait that long then really aggressive traders look for a breakdown in the current AMR up trend and short the stock down past the $9.00 level. Cover your short and then look for a dip to buy it. If we are triggered to buy AMR at $8.60 we're starting the play with a wide, and aggressive stop loss at $7.60. More conservative traders may want to use a tighter stop closer to $8.00. We're setting several targets. Our first target will be $9.90. Our second target will be $11.90. Our third target will be $14.90. Over the weekend we suggested that risk-averse traders consider a collar on this play. If you buy 100 shares of AMR then sell an out of the money call and then use the money from the call to pay for most of your purchase of a put contract to protect you. Example: If we are triggered at $8.60 you could then sell the $10 call and use the money to buy an $8.00 put. You may have to come up with more cash to buy the protective put position. In our example we would then have a covered call. If AMR rises over $10.00 you'll probably get called out and the put will be worthless. You'll make the difference between what you entered at, the $10.00 mark, and any thing extra to buy the put option. If AMR crashes lower you're partially protected with the put. In summary we are suggesting readers buy AMR at $8.60. If you're a nimble trader then use the breakdown from the current up trend to short AMR to under $9.00. Cover your short and look for bullish entry points.
Picked on August xx at $xx.xx <-- see TRIGGER
Axsys Tech. - AXYS - cls: 73.09 change: -0.38 stop: 71.95
AXYS continues to show relative strength. The stock only lost 0.5% versus a 1.5% drop in the S&P 500. The stock has been resistant to profit taking, which is bullish. Given this market environment and some of the waning technical indicators on AXYS we are not suggesting new bullish positions at this time. Wait for a new move over today's or Friday's high before considering new bullish positions. Our first target is $79.95. Our second target is $84.00. FYI: The most recent data available listed short interest at 8.8% of the small 9.1 million-share float.
Picked on August 12 at $75.82
Esterline Tech. - ESL - close: 52.17 chg: -1.41 stop: 49.90
It was not a good day for ESL. The stock has been showing relative strength last week but shares reversed quickly today and ended the session down 2.6%. We are not suggesting new bullish positions at this time and more conservative traders may want to consider an early exit right now or a tighter stop loss near today's low (51.71). We have a very aggressive target at $57.00 and we plan to exit ahead of the August 28th earnings report. FYI: The latest data put short interest at more than 9% of the small 29 million-share float. The stock could see a short squeeze ahead of earnings.
Picked on August 12 at $52.30
Graham Corp. - GHM - cls: 105.15 chg: + 4.28 stop: 99.95
Friday's drop in GHM was dangerous but bulls defended the stock near $100 and its rising 10-dma. Shares managed a bounce today but it was an "inside" day as the stock traded within the range of yesterday's candlestick body. Normally an inside day suggests indecision. My concern is that with the market rolling over and financials poised to fall again more conservative traders will want to strongly consider an early exit right here! We're going to keep our stop under support at $100 but we're not suggesting new bullish positions. Our target is $114.50. GHM remains a strong candidate for a short squeeze. This stock has an extremely small float of just 4.5 million shares. The short interest is over 10% of the float.
Picked on August 12 at $106.52
Harley-Davidson - HOG - close: 42.44 chg: -0.12 stop: 39.45
Traders bought the dip near $40.00 twice last week and now HOG is trying to keep the bounce and the breakout alive. Right now last week's breakout is starting to feel like a trap. We remain bullish on HOG with the stock above $40.00 and today's session did see some relative strength with a minor loss. Short-term indicators are mixed. The broader market looks weak and if the S&P 500 turns lower HOG will likely follow. Readers may want to wait for yet another dip and/or bounce in the $41.00-40.00 zone before considering new positions. Our target remains the $47.50-50.00 zone, and we suggest that traders begin to lock in profits as the lower edge of that target zone is reached. The latest data lists short interest at 12% of HOG's 232 million-share float. The P&F chart is bullish with a new buy signal.
Picked on August 11 at $42.55 *triggered
Monster Worldwide - MNST - cls: 19.85 chg: -0.47 stop: 17.85
We don't see any changes from our weekend comments. MNST is still trading sideways and we're still waiting for an entry point. Currently the plan is to buy a dip in MNST in the $18.60-18.25 zone. If triggered our target is the $21.75 mark. Keep in mind that I would be hesitant to open new positions if the major market indices are careening lower.
Picked on August xx at $xx.xx <-- see TRIGGER
Short Play Updates
Capital Trust - CT - close: 14.20 change: +0.34 stop: 16.01 *new*
The path of least resistance still appears to be lower for CT. The stock remains volatile but shares have failed to bounce back above the $15.00 level the last few days. We are adjusting the stop loss to $16.01. More conservative traders may want to place their stop closer to the $15.00 region. Another failed rally under $15.00 would look like a new bearish entry point. The most recent data listed short interest at almost 28% of the small 19 million-share float. That definitely raises our risk for a short squeeze. Our first target is $12.55. Readers should definitely consider locking in partial profits as that first target is hit. Our second target is $10.25.
Picked on August 04 at $14.38
Merrill Lynch - MER - close: 24.74 change: -1.55 stop: 27.55*new*
Financials were leading the market lower on Monday and MER was no exception. The stock gave up almost 6% and closed near its lows for the day. We are going to inch the stop loss down to $27.55. More conservative traders may want to adjust their stop closer to $27.00. Our first target is $22.50. Our second target is $20.25. The Point & Figure chart is bearish with a $7.00 target.
Picked on August 07 at $26.10
Closed Long Plays
Cal-Maine Foods - CALM - close: 47.65 change: +1.82 stop: 39.75
CALM continues to surge higher and more aggressive traders may want to let it ride. We are suggesting an early exit right here. The intraday high today was $48.80. Our second target was $49.00. That is close enough and given the market's weakness today CALM is going to look like a target for profit taking. Our first target was $44.90.
Picked on August 04 at $40.75 *early exit, 1st target exceeded
Juniper Networks - JNPR - close: 26.42 chg: -0.55 stop: 25.99
Warning! The three-day candlestick pattern in JNPR looks like a bearish reversal pattern. Thursday had a strong rally. Friday saw the stock spike higher and reverse. Today saw the selling continue. It just so happens that Friday's intraday rise was enough to break through resistance near $27.00 and its 200-dma. We were triggered at $27.55. Now that bullish breakout looks like a bull trap. We're suggesting an early exit now to cut our losses early. It's possible we're being too cautious and more aggressive traders may want to stick with it, especially since JNPR is still developing a bullish trend of higher lows. You could always exit now and re-enter on a new relative high.
Picked on August 15 at $27.55 *triggered
Closed Short Plays