Long Play Updates
AMR Corp. - AMR - close: 9.95 change: -0.13 stop: *see details*
Oil looks like it's setting up for a rebound and that will put pressure on the airlines. We don't see any changes from our previous comments on AMR. 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: 51.01 chg: +0.28 stop: 49.90
After a painful two-day sell-off shares of ESL bounced at $50.23 near its 20-dma. Volume remains very low so it's hard to put much emphasis behind these moves. We are tempted to buy this bounce but readers may want to wait for a new move over $51.50 before initiating new bullish plays. 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
Petrohawk Energy - HK - close: 32.01 chg: +2.49 stop: 28.45*new*
Many of the natural gas stocks exploded higher today. HK was one of them with an 8.4% gain and a breakout over round-number resistance at $30.00 and technical resistance at the 100-dma. Volume was above average on today's rally, which is a good sign for the bulls. If you missed the initial breakout this morning HK dipped back to the $30.40 zone providing another entry point before rushing higher again. We are adjusting our stop loss to $28.45. More conservative traders might want to use a tighter stop. We have two targets. Our first target is $34.85. Our second target is $38.50. We strongly suggest readers take some money off the table at our first target.
Picked on August 20 at $30.55 *triggered
Monster Worldwide - MNST - cls: 19.11 chg: -0.12 stop: 17.99*new*
We have been waiting for MNST to dip into the $18.60-18.25 zone. Shares traded lower today and move into the $18.70-18.65 region several times but never actually hit our trigger point. We're going to adjust our entry point and suggest readers buy today's dip and the close at $19.11. You might want to wait for a stronger bounce and look for a move over $19.50 or $20.00 before initiating positions. If you do wait you'll want to use a tighter stop. Due to our new and higher than planned entry point we're moving the stop loss up just a bit to $17.99. Our short-term target is the $21.75 mark.
Picked on August 20 at $19.11
Short Play Updates
Bank of America - BAC - cls: 29.29 change: +1.21 stop: 31.55
The banking sector made an impressive recovery today in spite of ongoing worries for FNM and FRE. Both stocks plunged more than 20% each and yet the BKX banking index rallied 2.2%. Shares of BAC performed even better with a 4.3% gain, which erased yesterday's losses. Wait and watch for a failed rally near $30.00 or BAC's 10-dma before considering new bearish positions. 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: 13.25 change: +0.01 stop: 15.01 *new*
Target achieved! We hope readers rang the cash register today and took some profits. CT dipped to $12.32 intraday. Our first target was $12.55. The big intraday bounce back is reminiscent of the early August reversal candlestick. That should but the bears on a cautious stance and expect a bounce probably back to the 10-dma and potentially to the $15 level and beyond. We are not suggesting new bearish positions at this time. We are inching our stop loss down to $15.01. 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 second target is $10.25.
Picked on August 04 at $14.38 /1st target hit $12.55
Merrill Lynch - MER - close: 24.41 change: +0.59 stop: 27.25 *new*
Traders bought the dip twice near $23.25 in MER today. That could be a caution sign that shares are due for another oversold bounce. The overall trend remains very bearish but the bounces can be super sharp. We're adjusting the stop loss to $27.25. More conservative traders may want to use a tighter stop. 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
SunTrust Banks - STI - close: 40.48 chg: +1.24 stop: 41.55
Warning! We are now in danger of a sharp snapback rally in the banks. STI dipped early this morning under support at its 50-dma and hit an intraday low of $38.17. Our suggested trigger for shorts was $38.45. Our play is now open. Unfortunately, STI may rally past our stop loss at $41.55 before rolling over again. We are not suggesting new bearish positions until STI trades under $39.00 again. Our target is $32.50. FYI: The Point & Figure chart is bearish with a $30 target.
Picked on August 20 at $38.45 *triggered
Closed Long Plays
Harley-Davidson - HOG - close: 39.31 chg: -0.86 stop: 39.75
HOG under performed the market on Wednesday. Shares spiked lower on no specific news and the stock traded near $38.00 and its 50-dma before a late day bounce back. Our stop loss was hit at $39.75 ending this play. The recent weakness has pushed the daily MACD indicator into a new sell signal.
Picked on August 11 at $42.55 */stopped out 39.75
Closed Short Plays