Editor's Note:

The markets broke down from their recent trading range. While this is clearly short-term bearish the longer-term trend is still up. I would hesitate to launch new bullish positions. Honestly, more conservative traders may want to abandon ship and just wait for the correction to play out before considering bullish positions again.


BULLISH Play Updates

Bank of America - BAC - close: 15.47 change: -1.02 stop: 15.79

It was an ugly day for the banking stocks as investors reacted to Obama's new proposed regulations. Shares of BAC plunged through a cloud of moving averages, which should have been support. This is a very bearish breakdown. Since we're still on the sidelines I'm willing to watch and see what happens tomorrow before dropping BAC as a candidate. Our trigger to buy the stock is unchanged at $16.80. Our first target is $17.95. Our time frame is several weeks.

Entry on   January xx at $xx.xx <-- TRIGGER @ 16.80
Change since picked:     + 0.00 (small positions)
Earnings Date          01/20/10 (confirmed)    
Average Daily Volume:       161 million 
Listed on   January 20, 2009    


CVR Energy - CVI - close: 8.51 change: +0.19 stop: 7.50

CVI displayed relative strength with a surge to new relative highs while the rest of the market was falling. CVI rallied to and hit technical resistance at its 200-dma before paring its gains to close up 2.2%. Now that CVI has tagged the 200-dma and in combination with the market's weakness I would not be surprised to see shares retest the $8.00 level again. More conservative traders may want to up their stop loss closer to $8.00. Our target long-term target is $12.50. CVI has to push past resistance at the 200-dma (near $8.74) and the $10.00 level first.

Entry on   January 19 at $ 8.20 
Change since picked:     + 0.31 
Earnings Date          03/10/10 (confirmed)         
Average Daily Volume:       411 thousand     
Listed on   January 17, 2009    


Home Depot - HD - close: 28.48 change: -0.18 stop: 27.95

HD held up reasonably well. Shares failed at $29.00 this morning but the selling pressure didn't make much progress. I remain very cautious here and more conservative traders will want to consider an early exit given the market's new weakness. I'm not suggesting new positions.

Our first target is $30.60. Our second target is $32.45. We'll plan to exit ahead of the February earnings report. FYI: The P&F chart is very bullish with a $44 target.

Entry on  December 14 at $28.82 *gap higher entry 
Change since picked:     - 0.34   			 
Earnings Date          02/23/10 (unconfirmed)     
Average Daily Volume:      15.7 million      
Listed on  December 12, 2009    


Hologic Inc. - HOLX - close: 15.80 change: +0.17 stop: 14.75

HOLX displayed some relative strength with a 1.0% gain versus the S&P 500's 1.8% decline. While this is encouraging I would not launch new positions here. Our first target to take profits is at $16.45. Our second target is $17.25.

Entry on   January 13 at $15.15   (small positions)
Change since picked:     + 0.65   			  
Earnings Date          02/01/10 (unconfirmed)      
Average Daily Volume:       2.7 million      
Listed on   January 04, 2009    


North American Palladium - PAL - close: 4.16 change: -0.44 stop: 3.85

The China story is finally starting to weigh on PAL. Yesterday metals and miners started to breakdown. That continued on Thursday and PAL participated in the decline with a 9.5% drop. More conservative traders will want to seriously consider an early exit right now. PAL has broken the narrow trend higher although logically the stock was overbought and due for a correction. A normal 38.2% Fibonacci retracement would bring it down toward $4.00. Nimble traders could try buying the stock on a bounce near $4.00. Consider keeping your position size small to limit your risk. Our first target is $7.00.

Entry on   January 19 at $4.50 
Change since picked:    - 0.34   			
Earnings Date         02/22/10 (unconfirmed)   
Average Daily Volume:      1.4 million 
Listed on   January 17, 2009    


ParkerVision Inc. - PRKR - close: 1.90 change: -0.10 stop: 1.79

PRKR gave up 5% but shares are still trading inside their new trading range with technical support at the 50-dma. Conservative traders may still want to abandon ship given the market's weakness. I'm suggesting readers wait for a move over $2.05 before launching new positions.

I suspect that PRKR could see a short squeeze. The most recent data listed short interest at more than 16% of the very small 28 million-share float.

We want to keep positions small to limit our risk. Our first target to take profits is at $2.45. Our second target is $2.75. We do not want to hold over the mid March earnings report.

Entry on   January 19 at $ 2.01 (small positions)
Change since picked:     - 0.11   			
Earnings Date          03/15/10 (unconfirmed)    
Average Daily Volume:       183 thousand
Listed on   January 19, 2009    


Renolds American - RAI - close: 53.41 change: -0.62 stop: 52.85

Uh-oh! RAI is in jeopardy of reversing. Suddenly Tuesday's breakout higher looks like a bull-trap pattern. I'm not suggesting new positions at this time.

We have two positions. The plan is to exit our first position at $55.90. The target on our second position is $59.50.

1st Trade
Entry on  November 14 at $50.32  
Change since picked:     + 3.09  
                       /sell half @ 53.15 (+5.6%) 
2nd Trade
Entry on   January 19 at $54.60 (small positions)
Change since picked:     - 1.19  
 
Earnings Date          02/11/10 (unconfirmed)     
Average Daily Volume:       1.6 million      
Listed on  November 14, 2009    


Sigma Designs - SIGM - close: 11.35 change: -0.13 stop: 10.95

SIGM temporarily broke down through technical support at its 30-dma and 50-dma today. Traders bought the dip but shares could be headed lower. More conservative traders may want to raise their stops toward $11.15. The low today was $11.17. I'm not suggesting new positions at this time. Our first target to take profits is at $12.95.

Entry on   January 15 at $11.30 
Change since picked:     + 0.05   			  
Earnings Date          03/04/10 (unconfirmed)      
Average Daily Volume:       392 thousand  
Listed on   January 09, 2009    


Vishay Intertechnology - VSH - close: 8.80 change: -0.57 stop: 8.45

We're seeing lots of volatility in VSH. Shares completely erased yesterday's 55-cent gain. The two-day move looks like a bearish reversal. I am not suggesting new bullish positions at this time. Our target is $9.95. The plan was to keep positions small to limit our risk.

Entry on   January 08 at $ 8.85 (small positions)
Change since picked:     - 0.05   			
Earnings Date          02/09/10 (unconfirmed)    
Average Daily Volume:       1.1 million 
Listed on   January 05, 2009    


Wright Express Corp. - WXS - close: 32.19 change: -0.42 stop: 30.95

WXS gave up 1.2% and looks like it could be headed toward short-term support near $31.50 or its 50-dma. Wait for a bounce. I'm not suggesting new positions at this time.

Our first target is $35.90. I'm setting a longer-term target at $39.50 but we want to sell the majority of our position at $35.90. We will plan to exit ahead of the February earnings report.

Entry on  December 21 at $32.30   
Change since picked:     - 0.11   
Earnings Date          02/10/10 (unconfirmed)
Average Daily Volume:       209 thousand   
Listed on  December 19, 2009    


BEARISH Play Updates

Best Buy - BBY - close: 38.17 change: -0.60 stop: 41.26

BBY has broken down and closed under significant technical support at its simple and exponential 200-dma. Readers could use this as a new bearish entry point. Our first target is $35.25.

Entry on   January 12 at $38.95 (small positions)
Change since picked:     - 0.78   			
Earnings Date          03/25/10 (unconfirmed)    
Average Daily Volume:       8.0 million      
Listed on   January 02, 2009    


CLOSED BULLISH PLAYS

Cisco Systems Inc. - CSCO - close: 24.41 change: -0.44 stop: 23.95

The selling pressure was pretty widespread this morning and CSCO hit $23.86 by lunchtime. Our stop loss was hit at $23.95 closing this trade. If CSCO breaks down under its 100-dma readers may want to consider short-term bearish positions.

chart:

Entry on   January 14 at $25.05 (small positions)   
Change since picked:     - 1.10 <-- stopped @ 23.95 (-4.3%)
Earnings Date          02/03/10 (confirmed)         
Average Daily Volume:        34 million      
Listed on   January 09, 2009    


Diana Shipping Inc. - DSX - close: 14.79 change: -0.29 stop: 14.95

The correction in shares of DSX continues and the stock hit our stop loss at $14.95 after breaking down through round-number support at $15.00 and its exponential 200-dma. Now shares are testing their 100-dma and the simple 200-dma around $14.60.

chart:

Entry on   January 09 at $16.44 /gap higher entry
Change since picked:     - 1.49 (small positions)<-stopped (-9.0%)
Earnings Date          02/18/10 (unconfirmed)    
Average Daily Volume:       1.5 million       
Listed on   January 09, 2009    


Potlatch Corp. - PCH - close: 31.25 change: -1.07 stop: 31.70 *new*

The market's widespread sell-off sent PCH to a 3.3% decline and shares broke down from their trading range. The stock hit our stop loss at $31.70 closing this trade.

chart:

Entry on  November 16 at $30.30 
Change since picked:     + 1.40 <-- stopped @ 31.70 (+4.6%)
Earnings Date          02/11/10 (unconfirmed) 
Average Daily Volume:       503 thousand     
Listed on  November 11, 2009