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Long Play Updates

Alon USA Energy - ALJ - cls: 10.89 chg: +0.36 stop: 9.75

ALJ finally broke out to a new relative high. Shares hit our trigger at $10.75 to open the play so our stop loss is now $9.75. It is encouraging to see ALJ out performing even as crude oil sank on Friday. That may not happen on Monday if oil keeps sliding lower. If you missed Friday's entry point look for a dip back toward the $10.50 region as another entry. Our target is the 100-dma or $12.50, whichever ALJ hits first. FYI: The Point & Figure chart is bullish with a $17 target.

Picked on August 22 at $10.75
Change since picked: + 0.14
Earnings Date 11/06/08 (unconfirmed)
Average Daily Volume: 604 thousand

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AMR Corp. - AMR - close: 10.52 change: +0.84 stop: *see details*

The sudden drop in crude oil on Friday powered a surge in the airline stocks. There has actually been a lot of talk about how investors can trade the airline stocks as a proxy for the moves in oil. Crude oil fell about 6% on Friday but AMR rallied 8.6%. This looks like a temporary bounce. We don't see any changes from our previous comments. We are suggesting readers wait for a dip into the $8.15-8.00 zone. If triggered at $8.15 we'll use a stop loss at $7.55. 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. We have also listed an alternative strategy for risk-averse traders. You can lower your risk with a collar on AMR. When you buy the stock sell an out of the money call option (per 100 shares of AMR that you own) and use this money from the call option to help pay for a put option to protect you should AMR suddenly plunge lower. It's not a perfect strategy. You limit your upside and will not see all the targets we listed but you also limit your downside, which may help some readers sleep better at night. Of course if you're having trouble sleeping over your trades you should focus more on money and position-size management.

FYI: Late Friday evening news crossed the wires that AMR had hired Merrill Lynch to sell another $300 million in stock in a secondary offering. This could weigh on shares come Monday.

Picked on August xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/15/2008 (unconfirmed)
Average Daily Volume: 24.6 million

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Carpenter Tech. - CRS - cls: 39.15 chg: -0.29 stop: 37.95

Nothing has changed from our original play description on CRS. The stock is still bouncing around the $38.00-40.00 trading range. It looks like shares are coiling for a bullish breakout higher but it's not guaranteed. Right now we're suggesting readers use a trigger to buy CRS at $40.25. If triggered our target is $44.75. Nimble traders may want to prepare for the opposite. If CRS breaks down under $38.00 considering bearish strategies. The $35.00 level looks like potential support.

Picked on August xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/30/08 (unconfirmed)
Average Daily Volume: 865 thousand

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CNX Gas - CXG - cls: 30.46 chg: -0.65 stop: 29.35

The natural gas stocks ran into some profit taking on Friday. CXG dipped to its 10-dma before bulls decided to buy it. We see this dip and late day bounce as another entry point to buy the stock. More conservative traders may want to use a tighter stop closer to Friday's low (29.83). Our target is the $34.00-35.00 zone.

Picked on August 21 at $31.05 *triggered
Change since picked: - 0.59
Earnings Date 10/23/08 (unconfirmed)
Average Daily Volume: 373 thousand

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Exterran Holdings - EXH - close: 47.50 change: -1.90 stop: 48.75

EXH was hit pretty hard by the profit taking in natural gas stocks. If shares close under $46.65 we'll drop it as a bullish candidate. Right now we're waiting for a breakout above resistance at $50.00. Our suggested entry point is $50.25. More nimble traders could try buying a bounce near $47.00 with a very tight stop loss! If triggered at $50.25 our target is the $54.00-55.00 zone. More aggressive traders may want to aim higher. There isn't any clear resistance until the $60 region. FYI: The latest data listed short interest at 8% of the 33 million-share float.

Picked on August xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/27/08 (unconfirmed)
Average Daily Volume: 1.2 million

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Petrohawk Energy - HK - close: 33.43 chg: -0.48 stop: 29.90

HK displayed some relative strength compared to the beating that most natural gas stocks received on Friday. Traders bought the dip near HK's 100-dma. This could be seen as a new bullish entry point but if you are jumping in now you'll want a much tighter stop loss and you'll want to aim for our second target. More conservative traders may want to raise their stop to breakeven or higher. We have two targets. Our first target is $34.85. Our second target is $38.50.

Picked on August 20 at $30.55 *triggered
Change since picked: + 2.88
Earnings Date 11/06/08 (unconfirmed)
Average Daily Volume: 10.3 million

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Monster Worldwide - MNST - cls: 19.51 chg: +0.50 stop: 18.45

Friday turned out to be a decent session for MNST bulls. The stock bounced for a 2.6% gain and closed over its 50-dma. This could be used as another bullish entry point but more conservative traders will want to keep a tight stop loss in place. Our short-term target is the $21.75 mark.

Picked on August 20 at $19.11
Change since picked: + 0.40
Earnings Date 10/23/08 (unconfirmed)
Average Daily Volume: 3.1 million

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Titanium Metals - TIE - cls: 12.19 change: -0.28 stop: 11.49

Entry point alert! We had suggested that readers buy a dip to $12.00 in TIE and the stock obliged us on Friday. TIE slipped to $12.01 and began to bounce ahead of the closing bell. We would jump in here. We are inching up our stop to $11.49. More conservative traders could tighten their stop losses even more. We are aiming for $14.50 but more conservative traders may want to exit at the descending 100-dma.

Picked on August 21 at $12.47
Change since picked: - 0.28
Earnings Date 10/30/08 (unconfirmed)
Average Daily Volume: 3.4 million
 

Short Play Updates

Bank of America - BAC - cls: 30.21 change: +1.17 stop: 31.55

Buy-out talk regarding LEH sparked some short covering in the financials. BAC rose 4% and closed above round-number resistance at $30.00. Shares actually look short-term bullish. Look for a failed rally near $31.50 or a new decline under $29.00 before considering new 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
Change since picked: + 0.91
Earnings Date 10/16/08 (unconfirmed)
Average Daily Volume: 90.8 million

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Cinci. Fincl. Corp. - CINF - cls: 28.20 change: +0.83 stop: 28.05

The strength in financials lifted CINF to a 3% gain and shares produced a bullish engulfing candlestick pattern. We are currently waiting for a breakdown under $27.00 with a trigger for shorts at $26.85. Nimble traders might want to consider shorts on a failed rally near the top of the trading range around $29.00. If triggered we have two targets. Our first target is $25.05. Our second target is $23.00.

Picked on August xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/29/08 (unconfirmed)
Average Daily Volume: 2.2 million

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Capital Trust - CT - close: 12.99 change: +0.24 stop: 14.38 *new*

CT only managed to bounce 1.8% versus a much stronger rebound in the financials. The trend is strongly bearish but the stock is also very oversold. We're not suggesting new positions at this time. Please note that we're adjusting our stop loss to breakeven at $14.38. CT has already exceeded our first target at $12.55. Our second target is $10.25. 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.

Picked on August 04 at $14.38 /1st target hit $12.55
Change since picked: - 1.39
Earnings Date 07/29/08 (confirmed)
Average Daily Volume: 278 thousand

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Merrill Lynch - MER - close: 25.22 change: -0.88 stop: 27.25

Takeover talk regarding LEH launched some short covering in the financials and MER was not immune. Shares rose 3.6% albeit on light volume. We would expect this bounce to fail. Wait for the reversal before considering new bearish positions. 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
Change since picked: - 0.88
Earnings Date 10/23/08 (unconfirmed)
Average Daily Volume: 42.2 million
 

Closed Long Plays

None
 

Closed Short Plays

SunTrust Banks - STI - close: 42.71 chg: +2.38 stop: 41.55

The LEH news on Friday powered some short covering in financials and STI was no exception. The stock added 5.9$% and hit our stop loss at $41.55 closing the play. Overall this looks like a temporary rebound and we would watch the 100-dma as potential resistance.

Picked on August 20 at $38.45 /stopped 41.55
Change since picked: + 1.88
Earnings Date 10/16/08 (unconfirmed)
Average Daily Volume: 10.4 million

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Financial SPDR - XLF - cls: 20.74 chg: +0.76 stop: 20.51

We are dropping the XLF as a short candidate for now. Friday's rally lifted the XLF by 3.8% and the bounce may not be over yet. Keep an eye on this financial sector ETF for a failed rally soon. Bears will get another chance to take a swipe at it. We were suggesting a trigger to short it at $19.49.

Picked on August xx at $xx.xx *never opened
Change since picked: + 0.00
Earnings Date 00/00/00
Average Daily Volume: 202 million
 

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