Good evening. We closed two more plays today which were both winners. Long BRCD hit our raised stop for a +5.22% gain, while short DECK hit our 2nd target for +6.41% gain. These closed plays are listed after the model portfolio snapshot below which is current. I do not have specific updates on open positions other than the following comments:
NE - We got hit on NE today as the stock closed -2.5% on the day. This stock is still in a bull flag on the daily chart and I'm not too concerned about the pullback. In fact, I think it presents a decent buying opportunity, especially on any further weakness.
VXX - Volatility is perking up and I suggest we stick with this play. VXX is in an uptrend on its intraday charts and I'm expecting more to come. Readers may want to consider $18.10 as a possible exit target which could come as quick as tomorrow. My primary targets are $18.45 (a gap fill) and $19.25 which I think we will see in the coming days. If the market sells off hard our final target of $20.40 could get hit fast. I'm sticking with no stop for now.
ATI - The stock sold off today and I'm expecting more. Our gain is currently +4.21%.
SF - We are short as of the open today and currently have a +1.26% gain.
Our model portfolio has narrowed quite a bit in recent days as we have closed several positions with the majority of them being winners. I'll release plays daily to get positions built back up but it could take a few days. Please email me with any questions.
CLOSED BULLISH PLAYS
Brocade Communications - BRCD - close 6.03 change -0.22 stop 6.05 *NEW*
Target(s): 5.95 (hit), 6.20 (hit), 6.37, 6.50
Key Support/Resistance Areas: 6.60, 6.20, 6.00, 5.75, 5.40, 5.00
Current Gain/Loss: +5.22%
Time Frame: 1 to 3 weeks
New Positions: No
9/23: We got stopped out of BRCD at our new stop of $6.05 which was raised yesterday to protect profits. It looks like $6.20 was probably the right place to take profits but we gave ourselves a chance to see if the momentum would continue into today which it did not. Nonetheless, we'll take the +5.2% gain to the bank. My comments below remain valid for those that still have positions.
9/22: Wow! The takeover chatter has regained steam in BRCD and the stock exploded +10.80% higher today. This is one of the reasons I released the trade and it is time to protect profits, or at least take some of them off the table. The chatter today came from IBM as an interested party at $7.50 per share, however, I have nothing to confirm this other than news sources I use. We can not count on this so I suggest we move the stop up to $6.05 and begin to trail it up if BRCD continues to break out. I've added a target of $6.37 which is near today's highs and a place where traders may consider a double top play. I highly suggest taking half or more of your position off the table and see how much more you can get out of the remaining position.
9/18 & 9/20: I am concerned about BRCD per my 9/15 comments. However, the stock has held its ground and remains in a bull flag. It could just as easily break higher or lower. If a breakout occurs before a pullback I suggest readers begin to look for an exit or tighten stops to protect profits. $5.95 and $6.20 are the primary targets.
Current Position: Long BRCD stock, entry was at $5.75
Options Traders: Long October $6 CALL
Entry on September 10, 2010
Earnings 11/23/10 (unconfirmed)
Average Daily Volume: 12.7 million
Listed on September 4, 2010
CLOSED BEARISH PLAYS
Deckers Outdoor Corp - DECK - close 46.25 change -0.27 stop 47.10 *NEW*
Target(s): 47.40 (hit), 46.15 (hit), 45.25
Key Support/Resistance Areas: 50.25, 45.00, 43.50
Final Gain/Loss: +6.41%
Time Frame: 1 to 2 weeks
New Positions: Closed
9/23: I'm inclined to take profits here on DECK as the stock has lost -6.4% from our entry in three days. There could be more downside but I don't want to get too greedy. The new stop is in the right place as DECK reversed just below it this afternoon. For readers who still have positions protect profits if DECK heads lower from here.
9/22: The sell-off in DECK continued today as the stock lost -3%. We came within 2 pennies of our $46.10 target so this has been raised 5 cents. If DECK trades down to $46.15 take profits or tighten stops to protect them as this could be construed as a double bottom set-up by some traders. I've also added another target of $45.25 which could get hit if the broader market weakness picks up. Regardless, we need to protect profits so I've lowered the stop all the way down to $47.10 which guarantees up a nice profit.
9/21: We are short DECK as of the today's open. The stock proceeded to sell-off -2.50% today and looks headed towards our targets just below. My comments from the play release below remain the same.
9/20: The retail sector has experienced an impressive string of consecutive advances and is due for pullback with the broader market. DECK has overhead resistance and is sitting just below a downtrend line that began with its 52-week highs in June. I suggest readers initiate short positions at current levels and play for -4% to -6.5% pullback. Our stop will be above the downtrend line and it will be adjusted after we are in the trade.
Closed Position: Short DECK stock at $46.15, entry was at $49.31
Entry on September 21, 2010
Earnings: 10/21/2010 (unconfirmed)
Average Daily Volume: 859,000
Listed on September 20, 2010