Option Investor
Play Updates

A pull back could be our next entry point.

Printer friendly version

Play Editor's Note: The expectation this week is that the market will see some sort of profit taking after a 10% bounce in the market. More and more it looks like the lows are behind us at least for the next few weeks. November begins a traditionally bullish time of year for stocks but these seasonal trends may struggle as we face a global recession. Our short-term plan is to buy the dips. Our challenge will be stop loss placement. We want them to be tight but not too tight. I wouldn't be surprised if the market did nothing Monday and Tuesday as the nation waits to see who is elected President but many market pundits are already discounting an Obama win.

______________ BULLISH Play Updates ______________

Broadcom - BRCM - close: 17.08 change: -0.65 stop: 15.75

BRCM encountered some profit taking on Friday and settled with a 3.6% loss, under performing the rest of the market. The short-term trend remains bullish but if you're looking for a new bullish entry point consider waiting for a dip near its 10-dma around $16.00. Currently our target is $18.75 just under the simple 50-dma.

Annotated chart:

Picked on October 24 at $16.10 *triggered 10/24
Change since picked: + 0.98
Earnings Date 10/21/08 (confirmed)
Average Daily Volume: 14 million


Ingersoll-Rand - IR - close: 18.45 change: +0.24 stop: 16.99

Our new entry point to buy a breakout in IR at $18.65 has been hit. Shares traded to $19.10 on Friday before paring its gains. The short-term trend is up but we're concerned that the market might see some profit taking early this week. Broken resistance near $18.00 should offer some support. Look for a dip in the $18.00-17.50 zone as a new bullish entry point to buy the stock. Our target is the $22.00 mark. More aggressive traders may want to aim higher, say the $25-26 zone.

Annotated chart:

Picked on October 31 at $18.65
Change since picked: - 0.20
Earnings Date 10/24/08 (confirmed)
Average Daily Volume: 4.8 million


Nucor - NUE - close: 40.51 change: +1.61 stop: 33.75 *new*

On Thursday night we said that the $41.00-41.50 zone in addition to the 50-dma at $41.20 is likely resistance. So we don't want to buy NUE right here. Instead we are suggesting readers buy NUE on a pull back into the $36.50-34.50 zone. We'll change the stop loss to $33.75. If triggered our first target is $41.00. Our second target is $44.75.

Annotated chart:

Picked on November xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 01/22/09 (unconfirmed)
Average Daily Volume: 9.7 million


Wal-Mart - WMT - close: 55.81 change: +1.06 stop: 53.35

Shares of WMT were upgraded to a "buy" by one analyst firm on Friday but that wasn't enough to push the stock past resistance near $56.75-57.00. Closing above the $55.00 level and above its 200-dma can be considered bullish signals but WMT still has a tough road ahead. The 100-dma was very strong support for months and now it could be very tough resistance. Currently the 100-dma is near $57.65. We would use a dip in the $54.25-53.75 zone as a new bullish entry point. More conservative traders may want to inch up their stops toward $53.75. We're going to keep our stop under the 10-dma for now. In spite of likely resistance at the 100-dma we're aiming for the $59.95 mark. Our secondary target is $63.00 but that may be a little optimistic, especially with our time frame. We don't want to hold over the mid November earnings report.

Annotated chart:

Picked on October 29 at $56.25 *triggered
Change since picked: - 0.44
Earnings Date 11/13/08 (unconfirmed)
Average Daily Volume: 25 million


Premier Investor Play Update Archives