Hartford Financial - HIG - cls: 71.95 chg: -0.95 stop: 69.95
News that NY Attorney General Spitzer is widening his probe into insurance giant AIG sent the insurance sector lower. Shares of AIG fell 2.2 percent and broke down under several key moving averages including the 50-dma, simple 200 and exponential 200-dma's. Volume was above average on the drop and AIG looks poised for further losses. This is bad news for the rest of the group. AIG is a huge insurance company and its breakdown will put pressure on HIG. Readers have to decide if they're going to hold on and see if HIG will bounce at support again near the $70 mark or consider an exit now to minimize any losses. We're going to hold on for another day and see what happens tomorrow before we make any decisions.
Picked on February 06 at $ 71.17
KLA-Tencor - KLAC - close: 49.41 chg: -1.40 stop: 47.75
Uh-oh! Readers need to be careful here. The SOX index was trading higher early in Monday's session but the overall weakness quickly pulled the group lower. This effectively negates the marginal breakout over long-term resistance at the 200-week moving average on Friday. The bad news for us is that KLAC traded high enough to trigger our play at $51.11 before turning lower. This might be seen as a failed rally and with the SOX not seeing any follow through we would be very hesitant to consider new bullish positions. Readers can look for a bounce near the $48.00 level in KLAC but we'd prefer to wait for another move over the $51 level before considering new bullish positions!
Picked on February 28 at $ 51.11
Loews Corp - LTR - close: 71.28 chg: -0.96 stop: 69.95
Readers need to be careful here with LTR as well. If you didn't read the HIG update in this newsletter then we encourage you to do so. The breakdown in AIG is going to pressure the entire sector. Now LTR did manage a small bounce from its rising 20-dma but it doesn't look very strong. This weakness doesn't look healthy for LTR. Conservative traders may want to exit early. We're going to stick it out another day before considering an exit as LTR still has round-number support at the $70 level.
Picked on February 15 at $ 74.15
PACCAR - PCAR - close: 75.26 chg: +0.26 stop: 71.99
As expected PCAR broke out over resistance at the $75.00 level. The stock actually traded toward the $76 mark before pulling back with the market's weakness today. The good news is that traders bought the dip near $74.00 establishing this level as support. If you missed the bullish entry point this morning this still looks like a bullish entry point now but it may be prudent to confirm market direction first (a.k.a. don't go long if the market is going down). We have been triggered at $75.25.
Picked on February 28 at $ 75.25
Bear Stearns - BSC - close: 99.50 chg: +0.89 stop: 102.51
You can thank Wachovia for BSC's strength this morning. The stock gapped higher and raced to $100.65 before fading after the firm upgraded BSC to an "out perform" this morning. While we are encouraged that BSC could not hold the $100 level the stock still managed to close over its rising 100-dma. We were cautious on Sunday and we're still cautious today. BSC does look like it could be trading in a descending channel. A failure near the $102.50 level would support the descending channel pattern. Plan your strategy accordingly.
Picked on February 20 at $ 97.84