Anadarko Petroleum - APC - cls: 78.20 chg: +2.10 stop: 72.45
Another new high in crude oil and a broker starting coverage on APC with a "buy" rating helped push shares of APC up another 2.75 percent on Friday. A reprint of Thursday's original play description follows:
Here we go again. It looks like the consolidation in the oil stocks over the last three to four weeks may be ending. Comments from Goldman Sachs and their forecast for triple-digit oil in the next few years could easily rekindle the fire under oil-related equities. There are plenty of oil stocks that are starting to look tempting for another trading rally but we're going to step carefully and only add one today. We will be looking at the holders, indices and ishares for potential plays this weekend. We like APC because the stock is producing a nice bounce from support near the $72.00 level (see chart). The bounce actually produced a hammer candlestick pattern and at the end of a bearish trend tends to signal a possible bullish reversal and today's gain was the follow through on that pattern. The stock has also broken through its three-week trendline of lower highs. The MACD indicator is suggesting a new buy signal soon and the RSI and stochastics are already turning positive. It is true that the P&F chart is bearish but the stock could trade up to the $81 level before producing a new buy signal. Our target is the $81.50 region - just under the early March resistance at $82.00. We will plan to exit this play before APC's late April earnings report.
BUY CALL MAY 75.00 APC-EO OI=4666 current ask $5.70
Picked on March 31 at $ 76.10
PalmOne - PLMO - close: 25.14 chg: -0.24 stop: 23.25
Over the last few days we have grown somewhat concerned that PLMO's bullish breakout would fail but so far the stock is holding above the $24.00-24.50 level. Plus, we see that bulls are defending the stock at the rising, simple 10-dma. More aggressive traders may want to use this pullback as a new bullish entry point. The P&F chart remains bullish with a $35.00 target. However, we suggest caution. With the broader market looking weak and a lack of follow through on the recent bounce we would hesitate to open new bullish plays. Wait for a move back over the $26.00 mark before considering new longs.
Picked on March 23 at $ 25.71
Red Robin Burger - RRGB - cls: 49.57 chg: -1.34 stop: 47.85*new*
The first thing you'll probably notice is that using the RRGB symbol to find news or charts doesn't work any more. Following the news out on Thursday about the NASDAQ notice of potential delisting for RRGB's delay on its 10-K filing the exchange changed the stock symbol to RRGBE. Investors responded negatively and the down market didn't help but RRGB(E) bounced from the $49.00 level intraday. The uptrend is still intact but we're going to turn conservative and adjust our stop loss higher. Our new stop will be $47.85 since the $48.00 level should act as support. Readers can choose to buy a bounce from the $49.00 level but we'd probably suggesting waiting for RRGBE to trade back above $50.00 or even $50.50 before going long. Plus, we would hesitate to go long if the major averages continue to sink.
BUY CALL JUN 45.00 QZR-FI OI= 49 current ask $8.40
Picked on March 10 at $ 48.00
Allergan - AGN - close: 69.47 chg: -0.00 stop: 72.51
Positive comments in a Barron's article about anti-aging stocks helped push Botox-producer AGN to an early high on Friday. Fortunately for the bears the rally quickly failed at its 10-dma and the stock closed unchanged. Shares remain within a couple of points of our $67.50 target. This is a tough spot to consider new bearish positions unless you believe AGN has farther to fall. The P&F chart does point to a $61 target. We are planning to exit at $67.50.
Picked on March 13 at $ 73.09
Beazer Homes - BZH - close: 50.39 chg: +0.53 stop: 53.01*new*
Hmmm... the DJUSHB home construction index was one of the best performing sectors on Friday. Yet the rally in the homebuilders still failed at its 40 and 50-dma's, which should be new overhead resistance. BZH also enjoyed an early morning rally and this lent some strength to its short-term oversold technical oscillators. We are cautious. The stock is somewhat oversold but BZH should have resistance at its own 50-dma near $52.85. We're going to lower our stop loss to $53.01 to reduce our risk. At this point in the game we're really not suggesting new bearish positions even though the P&F chart's sell signal points to a $39 target. Aggressive traders who believe BZH could trade to $45.00 might want to consider new put positions when the stock trades under $49.00 and/or its 100-dma.
on March 17 at $ 51.43
Google Inc - GOOG - close: 180.04 chg: -0.47 stop: 185.01
News that GOOG plans to increase the storage of its free gmail accounts from 1 gigabyte to 2 gigabytes did nothing for the stock price. Yet neither did news accounts that GOOG's plans for spending were going to rapidly rise as it plans to confront growing competition from MSFT and YHOO. Of course the higher capex comment was old news from Thursday. We also noticed that the INX Internet index was stronger on Friday morning but the index produced a failed rally at tough resistance with its simple 200-dma, exponential 200-dma and the 50-dma all converging near the 187 level. We would expect the INX to trend lower next week and that would be a positive for our GOOG put play. Remember that we're not suggesting new bearish positions in GOOG until shares trade back under the $177 mark. Our target remains the $165.00 region but we may adjust it considering our time frame. We plan to exit before GOOG's late April earnings report. The challenge is that the earnings date has not yet been confirmed. Currently GOOG is expected to report Q1 earnings on April 21st.
We are suggesting the April puts because we do not plan to hold over the April earnings report.
BUY PUT APR
185.00 GOU-PQ OI= 4451 current ask $8.00
Picked on March 10 at $179.49
Intl Bus. Mach. - IBM - close: 90.44 chg: -0.94 stop 92.15
Dow-component IBM was a factor in the DJIA's decline. The stock lost more than one percent with shares producing a failed rally near the exponential 200-dma under the $92.00 level. This looks like a new bearish entry point but we are still suggesting that readers wait for a drop under the simple 200-dma and the $90.00 mark. Our target, if IBM drops under $90.00, is still the $85.00 level. However, readers should be very careful. We are quickly running out of time. IBM's earnings report is coming up in a couple of weeks. Part of the risk here is that the earnings date is still yet to be confirmed. We will do all we can to make sure we exit before IBM announces.
BUY PUT APR 95.00 IBM-PS OI=24307 current ask $4.70
Picked on March 17 at $ 89.86
MGM Mirage - MGG - close: 70.38 chg: -0.44 stop: 72.51
Thus far we remain on the sidelines. MGG broke down through its bullish trend a few weeks ago but there has not yet been any follow through to the downside. Instead MGG is flirting with support at the $70.00 level and its 100-dma. The P&F chart is bearish and points to a $60.00 target. We are targeting a move to the early December lows and the exponential 200-dma near $62.00-62.50. However, we are using a TRIGGER at $68.75 to open the play. Until MGG trades at or below this mark we'll sit out. Fortunately, if the market continues to decline we would expect MGG to follow.
BUY PUT MAY 70.00 MGG-QN OI=652 current ask $3.20
Picked on March xx at $ xx.xx <-- see TRIGGER
Mcgraw Hill Cos - MHP - close: 86.03 chg: -1.22 stop: 88.51*new*
The market sell-off on Friday helped pull MHP to another 1.39 percent decline. The stock is nearing support and our target in the $85.00-84.00 range. Conservative traders may want to choose an early exit in the $85.50-85.25 region as MHP nears its exponential 200-dma. We are not suggesting new bearish positions. We are lowering the stop loss to $88.51.
Picked on March 15 at $ 88.40
Millipore - MIL - close: 42.84 chg: -0.56 stop: 45.05 *new*
The sell-off continues in shares of MIL. The recent failed rally under $45.00 and its 50-dma has now turned into a new short-term leg down. MIL lost 1.29 percent on Friday to close at a new eight-week low. Technical oscillators have turned negative again and the stock looks ready to test possible support at the $42.00 level soon. Our target remains the $40.00 region. We are lowering our stop loss to $45.05. Don't forget that we plan to exit before the April 21st earnings report.
BUY PUT APR 45.00 MIL-PI OI=338 current ask $2.35
Picked on March 16 at $ 43.95
Pacificare Health - PHS - cls: 56.35 chg: -0.57 stop: 60.05*new*
The market weakness on Friday also affected PHS, which lost exactly one percent to breakdown under technical support at its 100-dma. PHS is nearing our target in the $55.00-54.00 region. We are not suggesting new bearish positions at this time. We are lowering the stop loss to $60.05. Readers can prepare to exit.
Picked on March 20 at $ 59.04
Toll Brothers - TOL - close: 80.24 chg: +1.39 stop: 80.51
We have been expecting TOL to bounce back toward the $80.00 level, which should have acted as overhead resistance. Unfortunately the home construction sector was one of the best performing groups on Friday and TOL showed a little too much strength. The stock hit our stop loss at $80.51 early into Friday's session. We would be especially careful here. TOL appears to have produced a short-term bottom and if TOL breaks out over the $82.00 level it would not surprise us to see another rally attempt toward the $90.00 level.
Picked on March 17 at $ 76.81