Friday's short squeeze knocked us out of our only short play. Fortunately the same squeeze benefited our longs.

Current Portfolio


BULLISH Play Updates

Ford Motor Co. - F - close: 13.00 change: +0.21 stop: 12.45 *NEW*

Another good day for Ford but the rally could be ending soon. Ford consolidated for nearly two months before breaking out over $12. Given that much consolidation and the recent good news it could have farther to go and our secondary target is just ahead at $13.40. With a positive market I believe we will see that target. I raised the stop again just in case.

The intraday spike to $12.50 on Tuesday hit our first exit target.

Our second, longer-term target is $13.40. Our time frame is several weeks.

Position: Ford stock @ $11.72

chart:

Entry on February 23 at $11.72 /gap higher entry
Earnings Date 04/22/10 (unconfirmed)
Average Daily Volume: 96 million
Listed on February 23, 2010


NUCOR - NUE - close: 44.56 change: +1.05 stop: 42.75 *NEW*

I am almost a believer in the NUE play. Five days of gains and Nucor is threatening to break over initial resistance at $45. Given the choppy chart and the weakness in late January I inherited this play with a negative personal bias. I am finally warming up to it.

I am still concerned about adding new positions on NUE. With the initial exit target only $2 above the current level and decent resistance at $45 I believe there are better places to put your money.

Our first target to take profits is at $46.75. Our second and final target is $49.85. Our time frame is about four to six weeks.

Position: NUE stock @ $42.98

chart:

Entry on February 16 at $42.98 (small positions)/gap higher entry
Earnings Date 04/22/10 (unconfirmed)
Average Daily Volume: 6.1 million
Listed on February 16, 2009


Raytheon Co - RTN - close: 57.11 change: +0.38 stop: 56.35

Even on a good day RTN managed only +38 cents. I am still worried that RTN is topping here but as long as the uptrend continues we will stick with it. RTN announced a new $1.6 billion contract with the Air Force at the close on Friday so maybe RTN will find some new buyers waiting on Monday morning.

Our stop loss is breakeven $56.20. Our target to exit is $59.50. Our time frame is four to six weeks.

Position: RTN stock @ $55.85

chart:

Entry on February 25 at $55.85
Earnings Date 04/22/10 (unconfirmed)
Average Daily Volume: 2.9 million
Listed on February 20, 2009


POWR - Powersecure Intl $7.73, Change +0.18, stop $7.45 *NEW*

The rising wedge from last week broke to the upside but with earnings only three days away there has not been a big run yet. I raised the stop slightly in case the market goes against us.

This is an earnings lottery play. POWR will report earnings on March 11th. They have already preannounced the backlog will be better than previously expected. The stock is currently $7.57 and the $7.50 March call is only 60-cents. I believe the company will announced decent earnings and move sharply higher. The chart already shows upside pressure building. A positive number could generate some additional short covering. With the cheap option already in the month it will not take much of a move to get a nice return.

Position: POWR stock with a stop at $7.45.

Option buyers:
Position: MARCH $7.50 CALL (POWR 10C0750) @ $.55

chart:

Entry on March 03 at $ 7.64
Earnings Date 03/11/10 (confirmed)
Average Daily Volume: 78K
Listed on March 2nd, 2010


FWLT - Foster Wheeler $25.85, change +0.93, stop $24.35 *NEW*

Nice little 3.7% gain on Friday took FWLT to the first resistance test at $26. Once over $26 the resistance at $28 should be our first exit target. FWLT will broadcast live its investor day session on March 17th. The investor day should give the stock a boost.

Why We Like It:
All of the construction and engineering stocks have reported earnings with a real mix of results. FWLT reported profits on 2/25 that fell -35% but they still beat the street. Foster dropped on a soft outlook. Several others in the group (MDR, FLR, SGR, URS, SHAW) also reported soft bookings but they all predicted stronger conditions as the year progressed. Each of the group had their volatility events on the announcements but all appear to be starting to trend higher again. Foster is a relatively cheap stock at $25 and that is strong support from last year. I am betting the worst is over and as the recovery signs begin increasing so will these stocks.

We have a tight stop on it at just under last week's low. That gives us about $1.50 in cushion. The first target will be resistance at $28 and we will set a second target as we close in on that level. I could see a return to $35 later this year but I doubt we want to hold it in the newsletter that long.

Position: FWLT @ $25.13 with a stop at $23.75.

Option buyers:
Position: APR $26.00 CALL (FWLT 10D2600) @ $1.10

chart:

Entry on March 04 at $25.13
Earnings Date N/A
Average Daily Volume: 4.5M
Listed on March 3rd, 2010


BEARISH Play Updates

*We currently do not have any bearish play updates*


CLOSED BEARISH PLAYS

Ameritrade - AMTD - close: 18.09 change: +0.85 stopped @ 17.51

So much for slow moves. After a week of slowly bleeding pennies every day AMTD rallied a full dollar, knocking us out of the position. I could find no news on any broker that accounted for the sharp spike that all saw. The Friday short squeeze on jobs simply gave everyone a reason not to be short any more. We did escape with a small profit of 37-cents so all was not lost.

chart:

Entry on January 28 at $17.88, exit $17.51, +0.37
Earnings Date 04/21/10 (unconfirmed)
Average Daily Volume: 6.1 million
Listed on January 28, 2009