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Sell-off Too Sharp for ETFs

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Play Editor's Note: Extremely early this morning in Jim's Intraday Blog he suggested a "sell-the-news" event in the market today. Readers of this column shouldn't be surprised since we have been expecting a pull back. Granted I wasn't expecting a one-day 500-point sell-off. There could be some follow through tomorrow. I'm still thinking we should buy the dips but wait for signs of a bounce first.


BULLISH Play Updates

Alcoa Inc. - AA - close: 11.80 change: -0.50 stop: 10.45

AA lost about 4% on Wednesday but it wasn't enough to hit our entry point in the $11.50-11.00 zone. That could happen tomorrow. We'll start with a stop loss at $10.45. If triggered our target is $14.85.

Picked on November xx at $xx.xx <-- see TRIGGER  
Change since picked:     + 0.00   			
Earnings Date          01/08/09 (unconfirmed)    
Average Daily Volume:      24.2 million     


American Express - AXP - close: 27.83 change: -1.99 stop: 24.75

Financial stocks were some of the worst performers today. Shares of AXP gave up 6.6% and hit an intraday low of $27.58. We recently adjusted our suggested entry point to buy AXP to $26.50-25.50. We'll stay with that strategy for now although you don't have to buy the first dip. Instead consider waiting and watching for a bounce first. Our target is $31.75.

Picked on November xx at $xx.xx <-- see TRIGGER
Change since picked:     + 0.00  			
Earnings Date          10/20/08 (confirmed) 	
Average Daily Volume:      19.4 million   


BB&T Corp. - BBT - close: 33.55 change: -2.60 stop: 31.75

BBT, which had been looking pretty strong, was really hammered hard today with a 7.19% drop. Shares fell through several moving averages and what should have been short-term support at $34.00. Our suggested entry point to buy BBT was the $34.00-33.75 zone so the play is now open. We are urging caution here as BBT was plunging lower into the closing bell. It looks like the stock could trade in the $33.00-32.50 zone tomorrow morning. Wait for a bounce first before considering new entry points. Our target is $39.90. FYI: Readers should note that BBT has been rumored to be a merger candidate in recent weeks.

Chart:
BBT

Picked on November 05 at $34.00 *triggered      	
Change since picked:     - 0.45 	  
Earnings Date          10/16/08 (confirmed) 
Average Daily Volume:      10.5 million  	


BHP Billiton - BHP - close: 40.36 change: -2.41 stop: 35.99

BHP spiked to $44.15 before reversing today. The stock remains extended from its late October bounce. We are only making one change to our strategy.

Our plan is suggesting readers buy BHP on a dip into the $37.75-37.00 zone with a stop loss at $36.45. Our one change is to move the stop loss to $35.99 so it's under the simple 10-dma. Our first target will become $44.00. The P&F chart's bullish target has risen from $63 to $72.

Picked on November xx at $xx.xx <-- see TRIGGER	 
Change since picked:     + 0.00	  
Earnings Date          10/30/08 (unconfirmed)
Average Daily Volume:       6.7 million  


Broadcom - BRCM - close: 17.06 change: -0.63 stop: 16.60 *new*

BRCM is still consolidating sideways but its momentum is definitely waning. More conservative traders will want to consider a tighter stop near $17.00 or just exiting altogether. We are upping our stop loss to $16.60. We're not suggesting new positions. Currently our target is $18.45 near the simple 50-dma.

Picked on October 24 at $16.10 *triggered 10/24 
Change since picked:    + 0.96 	  
Earnings Date         10/21/08 (confirmed) 
Average Daily Volume:       14 million 


CIENA Corp. - CIEN - close: 8.66 change: -0.51 stop: 8.49

CIEN continues to inch closer toward what should be short-term support around $8.50. Readers could use a bounce from the $8.50 region as a new entry point for longs but keep a tight stop loss. We don't see any changes from our previous comments.

We have two targets. The first target is $11.75. Our secondary target is $13.85. This play might take a few weeks to reach its conclusion. FYI: The P&F chart is bullish with a $15.00 target.

Picked on November 03 at $ 9.00 *triggered 11/03	
Change since picked:     - 0.34	  
Earnings Date          12/11/08 (unconfirmed) 	 
Average Daily Volume:       5.9 million 


Ingersoll-Rand - IR - close: 17.91 change: -0.81 stop: 16.99

IR actually rallied to a new two-week high this morning before succumbing to the market-wide profit taking. We are still tempted to buy the dip today but readers might want to raise their stop loss toward $17.50 instead. Our target is the $22.00 mark. More aggressive traders may want to aim higher, say the $25-26 zone.

Picked on October 31 at $18.65 	 
Change since picked:    - 0.74  	 
Earnings Date         10/24/08 (confirmed)
Average Daily Volume:      4.8 million     


Lam-Research - LRCX - close: 23.03 change: -1.74 stop: 19.95

LRCX was looking very short-term overbought so it's not surprising to see a 7% decline today. We don't see any changes from our previous comments.

Our plan is to buy a dip in the $22.00-21.00 zone. More conservative traders may want to use a stop loss closer to $21.00. We're adjusting the target to $25.85.

Picked on November xx at $xx.xx <-- see TRIGGER	
Change since picked:     + 0.00	  
Earnings Date          10/22/08 (confirmed)
Average Daily Volume:       4.0 million   


Nat. Oilwell - NOV - close: 29.92 change: -3.00 stop: 27.25

NOV completely erased yesterday's gains. The stock lost more than 9% today and closed under what should have been round-number support at $30.00. We're still waiting for NOV to hit our entry point, which is a dip in the $29.50-29.00 zone. You don't have to buy the first decline so consider waiting for signs of a bounce first.

If triggered our first target is $34.50. Our second target is $39.00. The Point & Figure chart has turned bullish with a $54 target.

Picked on November xx at $xx.xx <-- see TRIGGER  
Change since picked:     + 0.00   			
Earnings Date          02/05/09 (unconfirmed)    
Average Daily Volume:      13.5 million     


Nucor - NUE - close: 35.50 change: -4.16 stop: 33.75

There was a reason why we didn't want to chase NUE around $40. The stock got clobbered today and ended with a 10.5% loss. We wanted to buy the dip and shares hit our entry zone today.

The plan was to buy NUE in the $36.50-34.50 zone. Currently NUE is right in the middle of that range. If you haven't opened positions yet you might get a chance to buy NUE near $34.50 tomorrow. Now that the play is open we have two targets. Our first target is $41.00. Our second target is $44.75.

Chart:
NUE

Picked on November 05 at $36.50 *triggered     	
Change since picked:     - 1.00	  
Earnings Date          01/22/09 (unconfirmed) 
Average Daily Volume:       9.7 million   


Wal-Mart - WMT - close: 54.13 change: -2.00 stop: 53.90

Watch out! The action in WMT today doesn't bode well for the future. The stock only lost 3.5% versus a 5.2% drop in the S&P 500. Yet shares broke down under its 200-dma, exponential 200-dma and the $55.00 level. WMT is now testing what should be short-term support around $54.00 but I wouldn't put a lot of confidence in it. Expect to be stopped out tomorrow at $53.90.

Picked on October 29 at $56.25 *triggered 
Change since picked:    - 2.14	 
Earnings Date         11/13/08 (unconfirmed) 
Average Daily Volume:       25 million   


CLOSED BULLISH PLAYS

Ultra(Long) Real Estate - URE - cls: 9.99 change: -1.50 stop: 9.75

We were counting on URE's volatility to propel this ETF higher but shares were extremely weak late in the session and hit an intraday low of $9.11.

We recently changed our plan to buy a dip in the $10.50-10.00 zone. Previously it was buy a dip in the $10.00-9.75 zone. Today's decline opened the play but the sharp afternoon sell-off hit our adjusted stop loss at $9.75 closing it.

There appears to be some screwy numbers showing up around the closing bell. Most services are listing $9.99 as URE's closing price. An intraday chart shows URE closing around $9.25 and trading around $9.30 in after hours markets.

FYI: The URE is an exchange-traded fund (ETF) that typically moves twice the daily performance of the Dow Jones Real Estate index.

Chart:
URE

Picked on November 05 at $10.50 *triggered /stopped 9.75
Change since picked:     - 0.51	  
Earnings Date          00/00/00 	  
Average Daily Volume:       1.6 million  


Ultra Financials ProShares - UYG - cls: 9.37 chg: -1.57 stop: 9.25

The UYG is another volatile ETF and the equity proved it today. Financials were some of the worst performing stocks today and the UYG dove more than 14% albeit on low volume.

Our plan was to buy a dip in the $9.85-9.65 zone, which UYG hit this afternoon. Unfortunately, the UYG just kept falling and hit our stop loss at $9.25 before the day was over.

A rebound over $10.00 might be a bullish entry point but trade cautiously!

FYI: The Ultra Financials ProShares is an exchange traded fund (ETF) that typically moves twice the daily performance of the Dow Jones Financial index.

chart:
UYG

Picked on November 05 at $ 9.85 *triggered /stopped 9.25
Change since picked:     - 0.48   			
Earnings Date          00/00/00 
Average Daily Volume:       114 million     


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