Play Editor's Note: In spite of the sharp afternoon sell-off most of our plays held up reasonably well. Tomorrow's action will depend on how investors interpret the jobs data. Expectations are set for bad news so the market's move will depend on whether or not we see any surprises. Whatever the jobs report delivers we can expect another volatile session. Unfortunately, if the move is lower then we'll see most of our positions get stopped out.
Allegheny Energy - AYE - close: 31.87 change: -1.34 stop: 30.85
Our bullish play on AYE may be in trouble. The stock lost 4% and closed under its simple 10-dma. Shares have been unable to reverse the short-term trend of lower lows. We have a tight stop on this play and it wouldn't take much to take us out of it. More aggressive traders will want to consider placing their stop under round-number support at $30.00 just so AYE has some room to maneuver. We're going to keep our stop at $30.85.
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.
CIGNA - CI - close: 12.31 change: -0.13 stop: 11.49 *new*
CI showed a little relative strength with a 1% loss compared to the 2.9% drop in the S&P 500. More importantly the intraday chart will show you that CI is building on the bullish pattern of higher lows. If the market is positive tomorrow I would expect CI to do well. We are adjusting our stop loss to $11.49. More aggressive traders may want to leave their stop under the simple 10-dma at $11.20. Our target is $14.50.
EBAY Inc. - EBAY - close: 13.40 change: -0.20 stop: 12.79
Piper Jaffray cut their price target on EBAY to $12. The news failed to have much impact on the stock. EBAY didn't really move until the stock market began diving late in the session. On a positive note the bounce back in EBAY was pretty robust. If the market is positive tomorrow I would expect EBAY to do well. Our short-term target is $14.95.
Emergent BioSolutions - EBS - close: 21.92 change: -1.71 stop: 19.45
Profit taking in EBS continues after its topping pattern yesterday. Currently we're expecting EBS to find support near round-number support at $20.00. More conservative traders may just want to step back and wait for the bounce to appear first before trying to buy the dip.
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: 7.43 change: -0.27 stop: 6.95
EXPE held up pretty well today. The stock was consolidating sideways until the late-day market decline. This pushed EXPE to $7.22 but the stock was quick to bounce back. We did see one news article today that stated traffic to online travel sites was dropping as the economy got worse. That really isn't a surprise. The article came out on Dec. 2nd in Phoenix and hit the rest of the Internet today.
If the market is positive tomorrow I would buy a bounce in EXPE or you could wait for a rally over $7.75 or $7.80.
We have two targets. Our first target is $8.45. Our second target is $9.75. More aggressive traders may want to aim higher.
*We currently do not have any bearish play updates*
Cognizant Tech. - CTSH - close: 15.89 change: -2.88 stop: 17.19
Ouch! What happened to CTSH today? The stock was crushed for a 15% drop and on above average volume. There was no company specific news. The only thing we could find that might account for the drop were some negative comments from rival Infosys Technologies (INFY). INFY came out today and said they see the IT industry slowing from 30% growth to 15% growth as customers delay orders. The drop in CTSH sent the stock through our stop loss at $17.19 closing the play