Long Play Updates
AMR Corp. - AMR - close: 10.08 change: -1.35 stop: *see details*
It was a volatile day of trading for oil but the commodity ended the session higher and that weighed on the airlines. AMR plunged almost 12% to the first level of support near $10.00. Kudos to any of our readers who were nimble enough to short AMR. The MACD on the daily chart has produced a new sell signal. Yesterday we suggested that aggressive traders may want to short AMR down to the $9 region instead of just waiting. Right now we're waiting for a dip into the $8.60-8.40 zone. 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.
Picked on August xx at $xx.xx <-- see TRIGGER
Esterline Tech. - ESL - close: 50.73 chg: -1.44 stop: 49.90
It was an ugly day for ESL. The stock sank throughout the session and closed under what should have been support at the 10-dma and more importantly at the 200-dma. ESL should still have some round-number support near $50.00 but we would definitely wait for a bounce before considering new positions. The two-day sell-off in ESL has erased several days of gains. It's probably not a coincidence that the rally on Friday stalled near ESL's 50% retracement of its June-July sell-off. More conservative traders may want to abandon ship right here. 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
Harley-Davidson - HOG - close: 40.17 chg: -2.27 stop: 39.75 *new*
Investors were quick to sell HOG during the market's weakness today. Shares lost more than 5% and closed right on support near $40.00 and its 200-dma. A bounce from here would technically be another bullish entry point but some of the short-term technical indicators are getting worse. We would hesitate to open new bullish positions at this time. Actually, I would strongly consider an early exit right here to cut my losses. We are bumping up the stop loss to $39.75. The recent lows were near $39.85. Our target remains the $47.50-50.00 zone. 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: 19.23 chg: -0.62 stop: 17.85
MNST is seeing a correction and shares lost 3% today with a breakdown under the 50-dma. If the broader market continues to decline there is no guarantee that MNST will bounce in the $18.50 region. Right now we're suggesting readers buy a dip in the $18.60-18.25 zone but we'd prefer to wait for a bounce from that zone. If triggered our target is the $21.75 mark.
Picked on August xx at $xx.xx <-- see TRIGGER
Short Play Updates
Bank of America - BAC - cls: 28.08 change: -1.22 stop: 31.55
As expected the financial sector continued to lead the market lower and BAC lost about 4%. Shares paused near support around $28.00 and its 50-dma. If the stock bounces from here look for a failed rally near $30 as a new entry point for shorts. Our target is $25.25. We're going to set a secondary target of $22.50 but strongly suggest readers take some money off the table at our first target.
Picked on August 18 at $29.30
Capital Trust - CT - close: 13.24 change: -0.96 stop: 15.15 *new*
Anything related to real estate or financials were hit hard today and CT lost more than 6.7%. The stock closed at a new multi-year low. We are adjusting our stop loss to $15.15. This remains an aggressive play because the stock is so volatile. 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: 23.82 change: -0.92 stop: 27.55
The broker-dealer stocks were hammered today thanks to Goldman Sachs (GS) cutting their estimates on the group. Shares of MER lost more than 3.7% and closed near its lows for the session. We don't see any changes from our previous comments. 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
Axsys Tech. - AXYS - cls: 70.50 change: -2.59 stop: 71.95
Tuesday's widespread market weakness was too much for shares of AXYS and the stock lost more than 3.5%. Shares broke down under the $70.00 level intraday before bouncing from its 30-dma. Our stop loss was $71.95 ending the play. Last week's failed rally at $80 and now today's breakdown is very bearish. More aggressive traders may want to consider bearish positions on AXYS now and target the 50-dma or the $60 region.
Picked on August 12 at $75.82 /stopped out at $71.95
Graham Corp. - GHM - cls: 101.12 chg: - 4.03 stop: 99.95
We knew GHM could be a volatile stock but these daily 4%-5% swings can be unnerving. The short-term technicals have turned bearish and it looks like GHM is poised to breakdown under the $100 level soon. We're hitting the eject button and suggest readers close this play early. Really aggressive traders might want to consider shorts on GHM under $100 with a target at $90.00 or the 50-dma. Don't forget about the extremely small float and the above average short interest.
Picked on August 12 at $106.52 /exiting early
Closed Short Plays