Good evening traders. The sell-off on Friday appears to be a thing a past as the indices have gained back most of their losses, but not all of them. Sellers are showing up and the indices are below the highs from last week. Apple may boost the markets tomorrow as they reported better than expected earnings, again! This is par for the course with Apple though and if the stock acts anything like other companies who have reported blockbuster earnings, then we may see some profit taking come in. I want to reiterate that being nimble with position management is paramount as the market is being driven by news which can create whipsaws in both directions. Be sure to protect profits.
BULLISH Play Updates
Excel Maritime Carriers Ltd. â€“ EXM â€“ close 6.74 change +0.19 stop 5.90
We initiated EXM in the portfolio at the open this morning as the futures were indicating higher prices. EXM quickly spiked and then retreated giving traders a second chance to enter. After the brief pullback EXM spent the remainder of the day adding to its gains. The stock ended the day closing 1 penny above its 200-day SMA at $6.34, +2.90%. EXM has some resistance around $6.89 which was the stock's high on April 15. I believe EXM will ultimately break through this level and retest its highs from January, which is near our target of $7.45. Readers who have not entered positions may do can do so on any weakness in the stock. On the intraday charts there is support at $6.65, $6.60, and $6.55. Our stop is below the 50-day SMA at $5.90 but we plan to raise it if the stock breaks above $6.89. Our time frame is several weeks.
Current Position: Long EXM stock @ $6.55
Entry on April 20 at $6.55
Earnings Date 05/19/10 (unconfirmed)
Average Daily Volume: 1.2 million
Listed on April 19th, 2010
Medicis Pharmaceutical Corp. â€“ MRX â€“ close: $25.75 change +0.63 stop: $23.95
MRX has rallied +$1.34 since yesterday's low of $24.40. This is a +5.50% rally in basically 2 trading days. Officially our position is up +3%. The stock has experienced resistance right $25.80 recently. Conservative traders may want to tighten stops to protect profits. I would not be surprised to see a bit of retracement prior to MRX moving higher. The stock has taken back its 20-day SMA which currently sits at $25.53. Our stop remains at $23.95, which is below the 50-day SMA. Our first target is $26.50 and our second target is $27.75, which is just below its 52-week high. I am not suggesting new positions at this time. Our time frame is a couple of weeks.
Current Position: MRX stock @ $25.00
Entry on April 14 at $25.00
Earnings Date 5/06/2010 (unconfirmed)
Average Daily Volume: 1.0 million
Listed on April 13th, 2010
Patterson Companies - PDCO - close: 32.23 change: +0.43 stop: 30.49
PDCO resumed its breakout today closing higher +1.35%. I am still suggesting readers be defensive here and consider selling into strength as PDCO is gaining momentum. In other words, I would rather be a seller of the stock into strength than a seller into weakness. There is good support at the $31.00 level but please don't let a winning trade turn into a losing one. A tighter stop could be placed at $31.40 which is just below the April 15 low. This stop is just below breakeven on the trade and should provide enough wiggle room if the stock has an intraday correction. The overall market direction will give you clues. It appears PDCO wants to test its highs from 2008 near $33.25 but if the indices can not break to new highs, PDCO may not be able to get the legs to follow through. The stock is also forming a bearish wedge pattern and if it breaks too far below $31.00 I don't want to be involved. Officially our stop is $30.49. I would like to lower our target to $32.50 and will gladly take profits should PDCO trade to this level. Conservative traders should consider taking profits or tightening stops on any strength in the stock. Our time frame is about a week.
Current Position: PDCO stock at $31.50
Entry on April 14th at $31.50
Earnings Date 05/17/10 (unconfirmed)
Average Daily Volume: 975 thousand
Listed on April 6th, 2010
Powershares UltraShort Real Estate - SRS - close: 28.03 change: -0.94 stop: 27.60
SRS was weak today (-3.24%) as the overall market rallied. There is resistance at $29.75 which is where SRS started to sell-off yesterday. The stock closed back below its 20-day SMA (currently at $29.64) which could pose more resistance. Our 1st target on SRS was hit on Friday. I moving our 2nd target down again to below the 20-day SMA at $28.50 and will gladly take profits if SRS trades to this level. A more aggressive 3rd target would be up to its 50-day SMA, currently at $32.90 but declining. If SRS trades to our new 2nd target of $28.50 I suggest selling positions or tighten stops to protect healthy profits. Our stop remains at $27.60, which will ensure a +5% gain if SRS reverses from here. Conservative traders should consider exiting positions now to lock in gains.
I want to remind readers that I consider this is a very aggressive trade so please use smaller position size to limit risk. *NOTE: Although this is listed as a long position in our portfolio, this is a bearish position on real estate stocks.*
Current Position: Long SRS @ $26.25
Entry on April 14th, 2010
Earnings Date Not Applicable
Average Daily Volume: 11.0 million
Listed on April 8, 2010
BEARISH Play Updates
Powershares QQQQ Trust - QQQQ - close: 49.75 change: +0.25 stop: 50.95
QQQQ lagged behind the S&P 500 today but still closed up +0.51%. The sell-off on Friday appears to be a thing a past as the indices have gained back most of their losses, but not all of them. Sellers are showing up and QQQQ experienced resistance at $49.80 most of the afternoon. Apple may boost QQQQ tomorrow as they reported better than expected earnings again. This is par for the course with Apple though and if the stock acts anything like other companies who have reported blockbuster earnings, then we may see some profit taking come in. I expect the NASDAQ to be volatile in the coming days as the markets are being driven by earnings and news. QQQQ has not touched its 20-day SMA (currently at $48.81) since February and it is overdue for a meaningful pullback. Should the stock trade down to this level I suggest readers tighten stops or just take a small profit. A more aggressive target is $47.00 but we will need to market get moving lower soon with some conviction to reach it. Our stop is $50.95.
Current Position: Short QQQQ at $49.05
Suggested Position: Buy PUT May $49.00, Ask at entry, $1.00
Entry on April 12th, 2010
Earnings Date Not Applicable
Average Daily Volume: 49.4 million
Listed on April 10, 2010