Long Play Updates
Granite Construction - GVA - cls: 38.36 chg: -2.76 stop: 37.85
Ouch! GVA completely erased Friday's gain with a 6.7% decline on Monday. We were suggesting readers buy a pull back near $40.00 with a suggested entry point in the $40.15-39.00 zone. The stock pulled back and kept right on going with a dip toward stronger support around $38.00. Our short-term risk is that GVA spikes under $38.00 intraday and then bounces back but we're reluctant to move our stop loss. Traders could certainly try and buy this dip now since our stop loss is relatively close. Others may want to wait for signs of a bounce with a move back over $39.00 or $40.00 as your entry point. Our target is the $44.85-45.00 range. If you consider the length of GVA's base it just finished building in the $30-40 zone the stock could be setting up for a much larger rally higher. Aggressive traders could aim for the $50 region. The Point & Figure chart is forecasting a $59 target.
Picked on September 22 at $40.15 *triggered 9/22
Hovnanian - HOV - close: 8.46 change: -0.59 stop: 7.85
Homebuilders were crushed on Monday as investors expressed doubts over the government's latest rescue plan and how it will help the ailing housing market. The DJUSHB home construction index lost more than 12%. Shares of HOV plunged to $8.07 before a very late day rebound. We were suggesting readers buy a dip in the $8.55-8.00 zone. If you were able to buy the dip near $8.00 then things look pretty good. The play is open for us but readers may want to hold back on opening new positions. If stocks continue to fall then HOV could easily retest the $8.00 region again. If stocks bounce then wait for HOV to clear $8.75 or $8.80 before initiating positions. We have two targets. Our first target is $9.99. Our second target is $11.50. Trades should be aware that there is a big homebuilding conference this week and comments coming out of this conference could move the sector. FYI: The latest data listed short interest at 49% of HOV's 51.4 million-share float. This definitely makes it susceptible to a short squeeze.
Picked on September 22 at $ 8.55 *triggered 9/22
Intl. Flavor & Fragrance - IFF - cls: 42.89 chg: -1.58 stop: 41.75
The pull back in IFF was pretty close to what we expected. Shares dipped toward technical support at its simple and exponential 200-dma. Our suggested entry point was to buy the stock in the $43.25-43.00 zone. The pull back may not be over yet so I wouldn't rush out to buy IFF if you haven't already. Shares could dip toward what looks like stronger support around $42.00. Wait for signs of a bounce before jumping in. Our target is $46.85. The Point & Figure chart is bullish with a $60 target.
Picked on September 22 at $43.25 *triggered Monday
Short Play Updates
Closed Long Plays
Ryland Group - RYL - cls: 25.33 change: -3.67 stop: 25.95
Shares of RYL were upgraded to a "strong buy" this morning but that didn't stop the stock from being beaten into a 12% decline on Monday. Investors displayed little faith in the government's latest details on the bailout for financials. In the wake of last week's big bounce the financial stocks and homebuilders were crushed for double-digit declines today. RYL plunged right past technical support at its 200-dma and fell through price support near $26.50. We were suggesting readers buy RYL in the $27.25-26.50 zone. If you did we were quickly stopped out at $25.95.
Picked on September 22 at $27.25 *triggered and stopped same day
Closed Short Plays