Option Investor
Play Updates

In Play Updates and Reviews

Printer friendly version

Long Play Updates

UltraShort Dow30 - DXD - cls: 66.57 chg: +5.31 stop: 61.20*new*

It was a dramatic day on Wall Street. The Dow Jones Industrial Average ended the session off 500 points. This produced an 8.6% gain for the DXD. The move today is "bullish" for the DXD but traders should remain cautious and be quick to pull the exit trigger. Today's market sell-off sent the volatility index (VIX) to a reading over 30. Normally levels above 30 on the VIX forecast a near-term market bottom. That doesn't mean that the VIX can't climb higher but the market is poised to bounce very soon, which is obviously bad news for the DXD. We are raising our stop loss to $61.20. More conservative traders may want to put their stop under today's low (63.40). Our target is the $69.75-70.00 zone.

Picked on September 09 at $63.62
Change since picked: + 2.95
Earnings Date 00/00/00
Average Daily Volume: 7.7 million


JB Hunt Transport - JBHT - close: 38.62 chg: +0.68 stop: 35.49

Market weakness also pushed shares of JBHT lower this morning but the stock found support near $36.00. New relative lows for crude oil helped fuel a rebound. JBHT ended the session up 1.8% and on relatively strong volume. Our first target will be $39.95. Our second target is $42.50.

Picked on September 14 at $37.94
Change since picked: + 0.68
Earnings Date 10/13/08 (unconfirmed)
Average Daily Volume: 2.6 million


Kellogg - K - close: 55.68 change: -0.53 stop: 54.89

Kellogg weathered the stock market storm today relatively well. Shares dipped to $55.18 before bouncing back. Unfortunately, the bounce stalled under $56.50, which only reinforces that level as resistance. Some of the short-term technical indicators are just starting to roll over into bearish signals. K may try and dip toward $55.00 again. We would hesitate to open new bullish positions in this market. Our target is $59.95.

Picked on September 14 at $56.21
Change since picked: - 0.53
Earnings Date 10/29/08 (unconfirmed)
Average Daily Volume: 2.1 million

Short Play Updates

Axis Capital - AXS - close: 31.48 change: -0.52 stop: 33.11 *new*

It was an extremely volatile day for the insurance stocks. Wall Street hates uncertainty and they were desperate for good news, any news today. Shares of AXS gapped open lower at $30.01, bounced to $33.08 and then plunged again. At least that is what it LOOKS like if you just look at the quote screen. The "trade" at $30.01 was a bad tick. We don't see any trades under $31.45 today. Our suggested entry point for shorts was $31.40. Thus we're still sitting on the sidelines with the play unopened. Readers have a significant choice to make. Play the strategy as is with a trigger to open bearish positions at $31.40 or toss AXS as a candidate altogether. Our new worry for bearish positions is the VIX. The Volatility index rose past the 30.00 level today. Normally readings above 30 indicate a market bottom very soon. We think there is more distress ahead for the financials so we're keeping AXS on the play list but we're adjusting the stop loss to $33.11. Our target is $28.50.

Picked on September xx at $xx.xx <-- see trigger
Change since picked: + 0.00
Earnings Date 11/13/08 (unconfirmed)
Average Daily Volume: 923 thousand


EMC Corp. - EMC - close: 13.28 change: -0.82 stop: 14.15 *new*

Shares of EMC were weak throughout the session. We're not suggesting new bearish positions with the VIX so high. Our stop loss is adjusted to $14.15. Our target is the July lows at $12.15. The Point & Figure chart is bearish with a $6.00 target.

Picked on September 09 at $13.67
Change since picked: - 0.39
Earnings Date 10/22/08 (unconfirmed)
Average Daily Volume: 30.7 million


Endurance Specialty - ENH - cls: 31.00 chg: -0.55 stop: 32.55

Insurance stocks continued to weaken as expected. ENH broke down under support near $31.50 and its 50-dma. Our trigger to short ENH was $30.99, which was hit this afternoon. Our target is the $28.00 level. We have a second target at $26.50.

Picked on September 15 at $30.99 /triggered 9/15/08
Change since picked: + 0.01
Earnings Date 10/30/08 (unconfirmed)
Average Daily Volume: 589 thousand


Expedia - EXPE - close: 15.71 change: -1.31 stop: 18.41

EXPE collapsed to new 52-week lows with today's 7.7% loss. We are adjusting our stop loss to $18.05. We are not suggesting new bearish positions with the VIX this high. We have two targets. Our first target is $15.00. Our second target is $13.50. The Point & Figure chart is bearish and forecasts a $9.00 target.

Picked on September 10 at $16.75 *triggered
Change since picked: - 1.04
Earnings Date 11/06/08 (unconfirmed)
Average Daily Volume: 4.2 million


Infosys Tech. - INFY - cls: 34.80 chg: -2.44 stop: 38.05 *new*

Target achieved. INFY under performed on Monday. The stock gapped lower and fell to $34.19 intraday before settling with a 6.5% loss. Our first target was $35.05. We are adjusting our stop loss to $38.05. We're not suggesting new positions at this time. Our second target is $33.00.

Picked on September 09 at $38.45 /1st target hit 35.05 (34.19low)
Change since picked: - 3.65
Earnings Date 10/09/08 (unconfirmed)
Average Daily Volume: 3.0 million


Merck - MRK - close: 32.72 change: -1.10 stop: 35.67 *new*

Drug stocks failed to be any sort of safe haven today. The DRG index lost almost 2% and MRK lost 3.25%. The stock could hit our target at $32.00 soon. More aggressive traders may want to aim for $30.00. The P&F chart is bearish and points to a $23 target. We are adjusting our stop loss to $35.67.

Picked on August 31 at $35.67
Change since picked: - 2.95
Earnings Date 10/22/08 (unconfirmed)
Average Daily Volume: 17.8 million

Closed Long Plays

HJ Heinz - HNZ - close: 51.88 chg: -0.73 stop: 51.45

Over the weekend we added HNZ to our play list as a bullish candidate thanks to the stock's relative strength. That strength temporarily failed this morning. Shares spiked to $51.01 before bouncing. Our suggested stop loss was $51.45. You could argue that our stop was too tight but we didn't want to take too much risk in this environment.

Picked on September 14 at $52.61 /stopped out 51.45.
Change since picked: - 0.73
Earnings Date 11/28/08 (unconfirmed)
Average Daily Volume: 2.7 million

Closed Short Plays

Expeditors Intl. - EXPD - close: 36.35 chg: +0.94 stop: 36.05

A sharp drop in oil prices lifted some of the transportation stocks and EXPD rallied above the $36.00 level. Our stop loss was $36.05. Chart readers could argue that EXPD may have produced a double bottom now with the lows in August and September.

Picked on September 09 at $34.76 *stopped out 36.05
Change since picked: + 1.59
Earnings Date 11/04/08 (unconfirmed)
Average Daily Volume: 3.1 million


Genuine Parts - GPC - cls: 41.76 chg: -0.43 stop: 44.01

Investor sentiment is terrible right now and yet GPC can't build up any momentum to the down side. Shares just aren't going anywhere and traders bought the dip again this morning. We're dropping the stock as a play and suggesting an early exit immediately.

Picked on August 31 at $42.42 /early exit
Change since picked: - 0.66
Earnings Date 10/17/08 (unconfirmed)
Average Daily Volume: 1.1 million

Premier Investor Play Update Archives