Chemed Corp. - CHE - close: 40.29 change: +0.36 stop: 42.55
CHE bucked the trend in the markets on Monday but the trading was still bearish. Shares rallied to $41.27, just above its 200-dma, before rolling over again. Even though CHE closed up 0.9% we would still consider new shorts here. We don't see any changes from our weekend comments.
We are suggesting a stop loss at $42.55, just above Friday's high. We have two targets. Our first target is $35.25. Our second target is $31.50.
FYI: It is important for traders to note that CHE's short interest is about 9.5% of the 21.4 million-share float. That is a relatively high amount of interest and a very small float. Together they raise the risk of a short squeeze. Consider this a higher-risk play.
iShares Germany - EWG - close: 16.35 change: -0.36 stop: 18.01
Hmmmm.... maybe we should add a short on Japan. Last week it was announced that Europe had officially slid into recession. Today Japan had officially moved into a recession. The EWG Germany ETF continued lower. The midday rally failed under support/resistance at $17.00. We don't see any changes from our weekend comments.
More conservative traders may want to use a tighter stop. The October low was $14.75. We're aiming for $15.05. More aggressive traders may want to aim lower.
iShares S&P SmallCap 600 - IJR - close: 40.00 chg: -0.35 stop: 43.55
Bears do not want to see relative strength in the small caps. If mutual funds start to turn bullish then we'll see buying pick up in the small cap names. The Russell 2000 and its associated ETFs all out performed the S&P 500 index. The IJR only lost 0.8%. This sort of "strength" might encourage more conservative traders to inch down their stop loss. Overall the trading action was still bearish and until the trend changes we're going to stay with it.
Our target is $35.50. The Point & Figure chart is bearish with a $17.00 target.
J.C.Penney - JCP - close: 16.72 change: -0.55 stop: 20.01
Surprise, surprise... the outlook for JCP, a retailer, is negative. What world are the ratings agencies living in? Fitch just announced today that they lowered their outlook on JCP to negative thanks to weaker sales. In the last ten weeks the stock has been crushed from $43 to $17 and the stock was trading around $85 less than two years ago.
We do not see any changes from our weekend comments. We have two targets. Our first target is $15.05 since the $15.00 mark might offer some psychological support. Our second, much more aggressive target is $11.00. Again, the $10.00 level could offer round-number support. The weekly chart suggests some support near $14.00-14.50. The Point & Figure chart is bearish and forecasting an $8.00 target.
Juniper Networks - JNPR - close: 14.72 change: -0.31 stop: 16.15
The sell-off in JNPR continues. The intraday rally attempt failed and JNPR is building on its trend of lower highs. We don't see any changes from our weekend comments. Technicals are bearish and the P&F chart is forecasting a drop toward $10.00.
Given the stock's recent action this does look like an entry point for shorts. We're suggesting a stop loss at $16.15, just above Thursday's high. Our target is only $11.00.
Northrop Grumman - NOC - close: 39.68 change: -0.66 stop: 43.01
Defense stocks performed better than the broader market and NOC only lost 1.6% versus the S&P 500's 2.5% drop. Yet the action in NOC remains very bearish and today marked its first close under the $40.00 level in years. The Point & Figure chart is forecasting a drop toward $29.00.
We're suggesting a stop loss at $43.01. Our target is $35.50. More aggressive traders may want to aim lower.
Pitney Bowes Inc. - PBI - close: 23.26 change: -0.11 stop: 24.75
PBI did not see a lot of follow through lower today but the trading action was still negative. The early morning rally failed at its trend of lower highs. The stock closed near its lows for the session and its MACD is nearing a new sell signal. We don't see any changes from our weekend comments. The Point & Figure chart is extremely bearish with a $6.00 target.
We're suggesting bearish positions now with a stop loss at $24.75. Our first target is $21.00 and we suggest that readers exit the majority of their position here. We are setting an aggressive, secondary target at $18.00.
Market Vectors Steel ETF- SLX - cls: 26.67 change: -0.72 stop: 30.05
The SLX steel industry ETF continues to drift lower. Shares closed down 2.6% after bouncing back above the $28.00 level early on. We don't see any changes from our weekend comments and would continue to short the SLX here. More conservative traders may want to wait for the SLX to trade under $25.00 before initiating positions.
We're suggesting a stop loss at $30.05. Our target is $21.00. The P&F chart is bearish with an $18.00 target.
Staples Inc. - SPLS - close: 16.48 change: -0.61 stop: 18.51
SPLS gave up another 3.5% as traders continue to sell into any strength. There was a midday spike over $17.00 but it didn't last long. We would still consider new bearish positions here.
We're suggesting a stop loss at $18.51, just above Friday's high. More conservative trades may want to try a slightly tighter stop loss. Our target is $14.00. The October lows were near $13.60.