Play Editor's Note: We were expecting a correction in the stock market. However, to be honest, I was not expecting such a violent move down and all in one day. The market's dive lower pushed a number of our bullish candidates over the edge. Readers need to tighten their seatbelts. Volatility appears to be increasing again.
Both the DJIA and the S&P 500 have completed a 50% retracement of last week's gains. If bulls are going to buy the dip they need to do it soon. Otherwise we might need to plan on new lows for the year. Wait for signs of a bounce before considering new positions and I would use tight stops on any new entries.
Allegheny Energy - AYE - close: 32.08 change: -3.17 stop: 29.95
Utilities were also sold hard during Monday's market carnage. Shares of AYE lost almost 9% and hit our trigger buy it in the $32.00-31.00 zone. Even though the play is now open we would wait on new positions. Readers may get a much better entry point near $31.00 or possibly near $30.00. Look for a bounce!
We have two targets. Our first target is $34.95. Our second target is $38.50. The Point & Figure chart has turned bullish with a $52.00 target.
Emergent BioSolutions - EBS - close: 22.37 change: -0.25 stop: 19.45
It was an impressive show of strength. EBS managed to hit another new high before finally settling with a 1% loss on a very bad day for stocks. I still expect a correction. We're suggesting readers buy EBS on a pull back into the $20.50-20.00 zone with a stop loss at $19.45. We have two targets. Our first target is $22.50. Our second target is $24.50. FYI: The Point & Figure chart is bullish with a $35 target.
Expedia Inc. - EXPE - close: 7.85 change: -0.55 stop: 6.85
The trading in EXPE was a little odd today. The stock fell lower in the first 30 minutes of trading and then consolidated sideways in a 10-cent range for the rest of the day. I don't see any changes from our previous comments. Our plan is to buy EXPE on a pull back into the $7.50-7.25 zone with a stop loss at $6.85. If triggered we have two targets. Our first target is $8.45. Our second target is $9.75. More aggressive traders may want to aim higher.
Molson Coors Brewing - TAP - close: 42.23 change: -2.24 stop: 41.90*new*
Our position in TAP has turned negative. The stock lost 5% but it failed to break the trend of higher lows and it failed to break the 50-dma. Momentum is definitely waning so we're inching our stop loss up to $41.90. We're not suggesting new positions. More conservative traders will want to strongly consider just exiting the play right here.
Our target is the $49.50 mark. However, we have to point out that the 100-dma and the exponential 200-dma could be overhead resistance. Currently the Point & Figure chart is bullish with a $56.00 target.
*We currently do not have any bearish play updates*
AptarGroup Inc. - ATR - close: 29.99 change: -3.45 stop: 29.95
Ouch! Today's drop in ATR was painful. This went from a winning position to a loser in one day. ATR erased more than half of last week's gains with a 10.3% decline. The stock hit our stop loss at $29.95 very late in the session.
Broadcom - BRCM - close: 14.12 change: -1.19 stop: 14.24
The NASDAQ Composite was a real weak spot with the tech heavy index off 8.9%. Shares of BRCM tried to keep pace but only lost 7.6%. That was still enough for BRCM to hit our stop loss at $14.24 and close the play. The next stop looks like its lows near $13.30ish.
Ultra Dow30 ProShares - DDM - close: 27.97 change: -4.94 stop: 28.45
Monday turned out to be a very violent day in the markets and it was worse for the leveraged ETFs like the DDM. As the DJIA plunged to a 7.7% drop the DDM fell 15%. Our plan was to buy it in the $30.10-29.00 zone but the DDM kept falling and hit our stop loss at $28.45.
F5 Networks - FFIV - close: 22.53 change: -2.37 stop: 23.49
Tech stocks were real under performers today and FFIV was no exception. The stock spiked lower very quickly and hit our stop loss at 23.49 ending our play. Shares eventually fell toward their 50-dma near $22.50.
Marshall & Ilsley - MI - close: 12.05 change: -3.40 stop: 13.95
The financial sector got crushed today. The BIX index was down 17%. The BKX index was also down 17%. Even the XBD broker-dealer index lost 17%. Not to be left out of the crowd, MI rushed lower to end the day off 22%. Over the weekend we had raised our stop loss to $13.95 after strongly suggesting readers take profits.
NetApp Inc. - NTAP - close: 12.21 change: -1.29 stop: 12.34
NTAP is another tech stock that was sold hard today. Shares ended the session down 9.5%. The stock hit our stop loss at $12.34 closing the play.