Long Play Updates
AMR Corp. - AMR - close: 10.33 change: +0.17 stop: *see details*
We've been waiting and watching AMR for a couple of weeks now. Shares have been moving lower but this past week saw a strong bounce from the $9.00 region. This week might be pivotal for the group. The impact or lack of one by the hurricanes on the price of oil could shape the short-term trends for the airlines. If AMR does not hit our suggested trigger to buy the stock by the end of this week we'll drop it as a bullish candidate. Please note that we are adjusting the entry point again to $8.15-7.85. If triggered our stop loss is $7.45. We're setting two targets. Our first target will be $9.90. Our second target will be $11.90. 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 but you also limit your downside, which may help some readers sleep better at night. Readers should consider this an aggressive play because the airlines have been so volatile.
Picked on August xx at $xx.xx <-- see TRIGGER
Basic Energy Services - BAS - cls: 29.23 chg: -0.27 stop: 27.59*new*
A lot of the oil and oil service stocks hit some heavy profit taking on Friday. Shares of BAS have been showing some relative strength by resisting any serious attempts at selling. The short-term trend remains bullish but we're not suggesting new positions at current levels. Look for a dip or a bounce near $28.00 or $28.50 to buy the stock. Please note that we're adjusting our stop loss to $27.59, just under the rising 100-dma. Our target on BAS is $31.50. FYI: The most recent data listed short interest at 7% of the small 21.7 million-share float.
Picked on August 26 at $28.34
CNX Gas - CXG - cls: 30.34 chg: -0.71 stop: 29.90
CXG was unable to escape the profit taking that has hit natural gas and many of the natural gas stocks on Friday. CXG did manage to hold on to round-number support at $30.00. A bounce from here would be a new bullish entry point. The short-term future for CXG and natural gas will be determined by the hurricanes nearing the U.S. and the market's reaction to those storms. Our target is the $34.00-35.00 zone.
Picked on August 21 at $31.05 *triggered
Hornbeck Offshore - HOS - cls: 44.06 change: -0.25 stop: 41.45*new*
HOS is expected to benefit if the hurricanes do much damage to the oil installations in the Gulf of Mexico. The stock has been slowly creeping higher with traders buying the dips. Right now the stock is challenging resistance near $45.00. We are going to adjust our stop loss to $41.45. If HOS sees any profit taking watch for the 10-dma (near 42.50) to act as short-term support. There is plenty of overhead resistance so this could be a tough ride higher. Our target is the $48.00 mark.
Picked on August 26 at $43.10
Kansas City South - KSU - close: 51.43 change: +0.02 stop: 49.45
Railroad stock, KSU, bucked the general trend on Friday but eventually gave back its intraday gains. It certainly looks like the stock wants to go higher. The Dow Jones Railroad index (DJUSRR) traded near its all-time highs on Friday and is close to a breakout. Of course the bears will look at it and see the DJUSRR near overhead resistance and due for a correction lower. At this point in time we would look for a dip near $50.50 or $50.00 as a new bullish entry point. Conservative traders will want to wait for signs of a bounce first before jumping on board. More conservative traders could place their stop closer to $50.00 while aggressive traders could place theirs under $49.00. Our target is the $54.90-56.00 range. FYI: The P&F chart is still bearish from the August correction. Calendar note: KSU is due to present at an investor conference on September 4th.
Picked on August 28 at $51.41
Monster Worldwide - MNST - cls: 19.54 chg: -0.31 stop: 18.94
MNST has not made much progress the last couple of weeks but the short-term trend has been up. The longer-term trend remains very bearish but that doesn't mean MNST can't rally to our targets before reversing again. Nimble traders might want to try buying dips again near $19.00. We are not suggesting new positions. The technical picture is actually mixed and not much help at the moment. We do have two targets. Our first target is $20.80, just under the August resistance. Our second target is $21.75.
Picked on August 20 at $19.11
Short Play Updates
NYSE Euronext - NYX - cls: 40.59 chg: -0.13 stop: 41.51
Shares of NYX continue to trade in a pivotal area of support/resistance. On a very short-term basis it looks like NYX wants to breakout over the $41.00 level. Yet longer-term the NYX has several levels of overhead resistance and the stock remains in a long-term bearish trend. We face a very real risk of being stopped out on an intraday spike only to see shares move lower. More conservative traders might want to inch their stops down to $41.05. We're leaving our stop at $41.51 for now. If the financials continue higher we would expect to be stopped out. We would wait for a new decline under $39.40 or $39.00 before considering new shorts. We have two targets set at $35.50 and $31.00. FYI: Readers should note that the most recent data listed short interest at 6.1% of the 257 million-share float. That's about three days worth of short interest.
Picked on August 25 at $39.41
Closed Long Plays
Petrohawk Energy - HK - close: 34.61 chg: -0.45 stop: 31.89
HK was a big winner the last couple of weeks with a strong rally up to $37.45. The rally stalled at technical resistance near its 50-dma. The stock looks vulnerable to more profit taking and we suggested an exit if HK closed under $35.00. Our first target was $34.85 (hit 08/26/08). Our second target was $38.50. Keep an eye on HK as it might provide another bullish entry point in the near future.
Picked on August 20 at $30.55 */1st target exceeded (37.45 hi)
Closed Short Plays