Google - GOOG - close: 390.70 chg: -0.30 stop: 384.50
The market bounce stalled on Friday and shares of GOOG remain under resistance near $395.00, the 50-dma (394.60) and the $400.00 mark. Shares traded in a relatively narrow range for GOOG on Friday with buyers defending the stock at $388.00. Since our market view is not very optimistic we're going to stick to our strategy with a trigger to buy calls at $401.00. One thing to be aware of is GOOG's upcoming earnings report in the second half of July. If GOOG doesn't break out soon we won't have enough time for shares to rise toward our target in the $440-445.00 range. FYI: the P&F chart points to $444.
Picked on June xx at $ xx.xx <-- see TRIGGER
Manpower - MAN - close: 64.30 change: -0.97 stop: 64.45
Friday produced zero follow through on Thursday's breakout above MAN's trendline of resistance. We remain on the sidelines with a trigger to buy calls at $66.05. We don't see any change from Thursday's new play description so we're reposting it here:
We are cautiously adding new bullish call candidates to the play list. The major market indices are bouncing and bouncing strongly but they remain inside their bearish trends for now. This could be nothing more than a correction on the way down. Therefore traders entering new call plays will probably want to keep their finger ready to hit the sell button and exit quickly. MAN looks like a decent bullish candidate. The consolidation appears to be ending. Shares have produced a double-bottom (bullish pattern) in the last couple of weeks and now shares have broken out above its trendline of lower highs (see chart). We want to see some confirmation so we're suggesting a trigger at $66.05 to buy calls. If triggered then we'll target the $69.85-70.00 range, under what appears to be resistance near $70.00. This is somewhat aggressive since MAN is still showing a bearish Point & Figure chart with a $55.00 target. We do not want to hold over the mid-July earnings report.
BUY CALL JUL 65.00 MAN-GM open interest=104 current ask $2.45
Picked on June xx at $ xx.xx <-- see TRIGGER
Reynolds American - RAI - cls: 110.95 chg: -0.20 stop: 107.45
RAI spent Friday's session bouncing around the $110-111.50 range. The only new development is a new buy signal for the MACD indicator. We do not see any changes from the Thursday night new play description so we're reposting it here:
RAI looks like another attractive bullish candidate but again we want to caution traders about opening call positions. The two-day bounce in the markets may be just a bounce. RAI looks tempting because the short-term technical oscillators like the RSI and stochastics are turning positive. Plus, the MACD indicator is nearing a new buy signal. Meanwhile the P&F chart is very bullish with a $148.00 target. The daily chart also shows RAI bouncing from technical support at its rising 100-dma (twice in the last couple of weeks). Thursday's rally also appears to be a breakout above its five-week trendline of lower highs (resistance). We're going to suggest calls with RAI above $110. We're going to suggest two targets. Our conservative target is $115.00. Our aggressive target is $119.00. We would keep a wary eye on larger rival Altria (MO), which has a bearish chart. A breakdown in MO would probably weigh on shares of RAI. The P&F chart for MO is bearish and points to $62.00.
BUY CALL JUL 110.00 RAI-GB open interest=634 current ask $4.60
CALL AUG 110.00 RAI-HB open interest=1521 current ask $6.10
Picked on June 15 at $111.15
United Tech. - UTX - close: 61.75 chg: +0.94 stop: 58.75
UTX continued to see some follow through on Thursday's rebound. Shares added another 1.5% on Friday with volume coming in above average supporting the move. The stock appears to have broken out through the top of its short-term bearish channel but the rally stalled under resistance at $62.00 and its 50-dma. We warned readers that UTX would probably encounter some resistance in the $62.00-50-dma region. Our market view is still not very optimistic but money is likely to rotate into large-cap blue chip stocks like UTX for the liquidity. We'd look for a dip back toward $61.00-60.00 as a new entry point for calls on UTX. Our target remains the $64.00-65.00 range.
Picked on June 08 at $ 60.13
Amgen Inc. - AMGN - close: 66.82 chg: -0.62 stop: 69.05 *new*
Good news. On Friday there was no follow through with the market bounce and AMGN continues to trade under resistance at its descending 50-dma and trend of lower highs. Given the lack of follow through in the markets we remain somewhat bearish here, especially with the BTK biotech index's failed rally under the 660 level and its 50-dma and exponential 200-dma. We would still consider buying puts on AMGN right here but traders are probably better off waiting for a decline under $66.40 or $66.25 as their entry point. Our target is the $62.65-62.25 range. Please note that AMGN is due to hold an investor conference call on Monday, June 19th. This is a risk that the company might say something positive and move the stock price. We are going to tighten our stop loss to $69.05. We do not want to hold over the mid July earnings report.
BUY PUT JUL 70.00 YAA-SN open interest=8454 current ask $3.80
Picked on June 05 at $ 67.48
Barr Pharma - BRL - close: 51.05 chg: -0.89 stop: 53.05
Lack of follow through on the bounce is good news for the bears in BRL. The stock lost 1.7% on Friday and looks headed back toward the $50.00 level. Now that the DRG drug index has produced a failed rally and new lower high we might see BRL actually break down under the $50 level next week. Our target is the $48.00-47.50 range. More conservative traders might want to adjust their stop toward Thursday's high (52.61).
BUY PUT JUL 50.00 BRL-SJ open interest=1209 current ask $1.55
BUY PUT AUG 50.00 BRL-TJ open interest=1400 current ask $2.30
Picked on June 05 at $ 52.20
Express Scripts - ESRX - cls: 68.08 chg: +1.42 stop: 70.10
ESRX continues to bounce. We warned readers on Thursday that it looked like the stock would rally towards the 10-dma or the $70.00 level. It looks like the 10-dma is holding as short-term overhead resistance. Wait for signs that the rally is failing before considering new put plays on ESRX. Our conservative target at $65.25 has already been hit so we're now aiming for the $60.50 level. The P&F chart is bearish and points to a $52.00 target. We do not want to hold over the late July earnings report.
Picked on June 08 at $ 69.59
Group 1 Auto - GPI - close: 57.50 chg: -1.15 stop: 60.15
The oversold bounce in GPI is stalling and this looks like a new entry point to buy puts. The stock has produced another new lower high and failed to test the $60 level. The weekly indicators are starting to roll over into bearish signals while the daily chart shows a double-top type pattern. We would suggest new puts with GPI under $58.50. Our target is the $51.50-50.00 range. The P&F chart points to a $50 target. Our stop is at $60.15 but more aggressive traders may want to leave their stop above $60.50, which was resistance several days ago.
BUY PUT JUL 60.00 GPI-SL open interest= 457 current ask $4.60
Picked on June 11 at $ 58.46
Intl. Bus. Mach. - IBM - cls: 77.95 chg: -0.61 stop: 80.05
The breakout in IBM did not last very long. The stock spent most of the last several days trying to breakout over the $78 level. It managed a breakout on Thursday's big market rally. Unfortunately for shareholders IBM turnaround and closed under $78 again on Friday. Volume came in above average on Friday's decline and that's good news for us. The MACD on the daily chart is looking oversold and acting like it wants to produce a buy signal but the rest of the technicals don't look so hot. The P&F chart is bearish and points to a $73 target. If you look at the weekly chart it's easy to see a bearish H&S pattern and IBM's broken support. We are suggesting new put plays with IBM under $79.00. Our target is the $73.50-73.00 range. Please note that we will be running into a time crunch soon. We don't want to hold over the mid-July earnings report.
BUY PUT JUL 80.00 IBM-SP open interest=28621 current ask $2.95
Picked on June 06 at $ 78.75
IDEXX Labs - IDXX - close: 77.49 chg: -0.12 stop: 80.05
This looks like a new entry point to buy puts on IDXX. The BTK biotech index has produced a failed rally and lower high under its 50-dma and exponential 200-dma. Meanwhile IDXX has produced a failed rally under broken support at $78.00. We would suggest new puts here or more conservative traders can wait for a decline under $77.00 before initiating plays. IDXX does appear to have minor support at $76 and $75 and probably again at the 200-dma but the overall trend is bearish with the breakdown of its longer-term bullish channel. The P&F chart is bearish and points to a $64.00 target. We have two targets. A conservative target at $75.25 and a more aggressive target at $72.00. IDXX should have overhead resistance at $78.00, the $80.00 level and its 50 and 100-dma's near $80.
BUY PUT JUL 80.00 UID-SP open interest=244 current ask $3.70
Picked on June 12 at
Oshkosh Truck - OSK - close: 49.63 chg: -0.40 stop: 52.05
The action in OSK on Friday looks like a failed rally near its 10-dma, exponential 200-dma and the $50.50 ($50.00) region. At face value this looks like a new entry point to buy puts on OSK but we're not sure the bounce is over yet. The stock may still try and rally toward the $52 level. We are suggesting new puts here but traders may want to take a wait and see approach before opening new positions. Our target is the $45.50-45.00 range. The P&F chart looks pretty bearish with a $34.00 target. Please note that the weekly chart, which its various trendlines, is showing a potential danger zone with regards to buying puts.
PUT JUL 50.00 OSK-SJ open interest=1144 current ask $2.15
Picked on June 13 at $ 49.49