Good evening. We closed two long trades and one short trade today which were all winners. The closed trades are listed below. I do not have any updates on open positions as everything was relatively flat today. I am expecting our revised targets to be hit on our short positions when the market gives back some its recent move. We may need to be patient with these positions until after OPEX. Please email me with any questions.
CLOSED BULLISH PLAYS
PowerShares DB Agriculture Fund - DBA - close 24.99 change +0.29 stop 24.28
Target(s): 24.60 (hit), 24.95 (hit)
Key Support/Resistance Areas: 25.00, 24.70, 24.40, 23.55, 23.40
Final Gain/Loss: +4.39%
Time Frame: Several weeks
New Positions: No
7/14: DBA hit our final target so we are flat for a +4.39% gain. DBA may have a little more room to run but I suggest protecting profits as I believe there will be a pullback prior to the stock moving higher. A new stop could be placed below today's low at $24.75 to see if the position can move higher.
7/13: DBA is getting close to hitting our target which may happen tomorrow. If it does we will close the positions. We will keep our current stop in place to give DBA room to work.
7/12: DBA is forming a bull flag and I am expecting the ETF to break higher. Call activity has been picking up in the ETF with 2,000 August contracts purchased today. This bodes well for our bullish position and I am looking for our final target of $24.95 to be hit, possibly this week. $24.60 is still a valid target that was hit last week and we have a relatively tight stop to protect against reversal.
Closed Position: Long DBA stock at $24.95, entry was $23.90
Entry on July 7, 2010
Earnings Date N/A (unconfirmed)
Average Daily Volume: 792,000
Listed on 7/6/10
Suntech Power Holdings - STP - close 10.92 change +.07 stop 10.29
Target(s): 10.73 (hit), 10.93 (hit), 11.35, 11.90, 12.15
Key Support/Resistance Areas: 10.50, 9.90
Final Gain/Loss: +2.54%
Time Frame: Several weeks
New Positions: No
7/14: STP popped higher again today and hit our target of $10.93. Considering the circumstances and the overbought broader market I do not want to push our luck on this trade so we are flat on the position for a +2.54% gain. For readers who still have positions I suggest keeping the current stop in place to limit losses if STP reverses lower. I also suggest selling into strength or trailing up stops to protect gains.
7/13: STP popped higher this morning and made a double on the intraday chart at $10.80 and that's all we got. Our target of $10.73 was hit and it remains a valid target. Today's pullback was on lighter volume than the recent advances. I think we may get a $10.93 print tomorrow which is where I suggest tightening stops or talking profits. I've tightened the stop to $10.29 which is below yesterday's low.
7/12: STP retraced the gains I was looking for which triggered our entry for long positions at $10.65. This morning Citigroup initiated coverage in STP with a sell rating while at the same time initiating TSL with a buy and YGE with a hold. This appears to be the main reason the stock sold off -7% today. There have been a slew of other downgrades from analysts in recent weeks which has beaten down STP so let's just say Citi is late to the party. I don't necessarily mind that because when the selling ends opportunities for long positions begin to surface as sellers wane and buyers appear. In other words STP has already taken the medicine from the previous downgrades and the most recent from Citi may begin to exhaust sellers again. From a technical perspective the bullish case remains intact as STP closed above its break out resistance level of $10.50. And if the market continues to bounce STP should see buyers step in. However, in lieu of today's news it is prudent to begin looking for an exit on this trade. I am going to raise the stop to $10.09 which is just below the 50-day SMA and I have also tightened the targets. $10.73 and $10.93 are intraday support/resistance levels and are good places to consider tightening stops or taking profits. Conservative traders should consider simply exiting positions. Going forward I plan to tighten the stops daily to see if we can turn this into a winning trade. NOTE: STP is a volatile stock and I view this as a speculative play. Please use proper position size to limit risk.
Current Position: Long STP stock at $10.73, entry was at $10.65
Entry on July 12, 2010
Earnings Date 8/19/10 (unconfirmed)
Average Daily Volume: 3.5 million
Listed on 7/10/10
CLOSED BEARISH PLAYS
Sherwin-Williams - SHW - close 71.64 change -1.58 stop 76.70
Target(s): 71.90 (hit), 71.15 (hit), 70.50 (hit), 69.25
Key Support/Resistance Areas: 75.90, 73.50, 71.10, 69.00, 68.00, 66.50
Final Gain/Loss: +3.09%
Time Frame: 1 to 2 weeks
New Positions: Closed
7/14: SHW gapped lower this morning and quickly sold off to our target of $70.50. We are flat the position for a +3.09% gain. The stock recovered but still has overhead resistance. If the market is weak in the coming days SHW should move lower but I am content with a quick gain on this one. I suggest lowering stops to protect gains.
7/13: SHW remains below a key resistance level near at $73.50. If we get some selling in the broader market SHW should go lower relatively quick. I've narrowed the targets and suggest tightening stops or exiting on weakness.
7/12: SHW pulled a repeat of Friday in that the stock opened higher and drifted lower the entire day. Any market weakness should send this stock lower towards our targets. I want to offer another target of $70.50 which is just above the resistance highs (which may now act as support) from 7/1 to 7/6. This level will give us a +3% gain and is an area to consider tightening stops to protect profits.
Closed Position: Short SHW stock at $70.50, entry was at $72.75
Entry on July 9, 2010
Earnings 7/22/10 (unconfirmed)
Average Daily Volume: 1.48 million
Listed on July 8, 2010