Bucyrus - BUCY - close: 53.18 chg: +0.29 stop: 47.69
The markets posted a five-day winning streak and shares of BUCY followed with a four-day surge of its own. This past week saw BUCY breakout over significant resistance in the $50-51 region. Volume was strong on the breakout, which is usually a bullish sign. The move posted a new triple-top breakout buy signal on its Point & Figure chart that now points to a $68 target. Technicals on both the daily and weekly chart are already bullish or quickly moving toward bullish signals. We remain positive but would probably not consider new positions right here. The markets, and BUCY, look short-term overbought and due for a dip. So far BUCY has found short-term support at the $52 level. Traders can look for another dip to $52 or better yet a dip back towards $51 as a new entry point to buy calls. Our target is the $57.50-60.00 range.
Picked on August 16 at $ 51.87
Goldman Sachs - GS - close: 154.68 chg: +0.23 stop: 149.40
The three-month consolidation in the XBD broker-dealer index looks like it's nearing an end. The sector index has been testing resistance near the 220 level and its bullish pattern of higher lows suggests the next move is probably a breakout higher. That would be good news for GS, which has a similar pattern of higher lows and is already testing new three-month highs this past week. The trading in GS on Friday saw traders buy the dip near $153.00, which also happens to be relatively close to its simple 100-dma and its 10-dma. We remain optimistic and would consider new call plays here. However, traders should note that the major market indices all look a little short-term overbought after their five-day winning streak so the markets could be due for a dip. If you prefer consider waiting for a dip towards $152 before initiating positions. Our conservative target is $160.00. Our secondary target is the $164.50 level. Consider selling half your position at $160 and the rest at $164.50. We do not want to hold over the late September earnings report. FYI: The P&F chart points to a $190 target.
BUY CALL SEP 150.00 GPY-IJ open interest=1598 current ask $7.70
Picked on August 16 at $154.99
MicroStrategy - MSTR - close: 93.18 chg: +1.88 stop: 85.99
Shares of software company MSTR produced another round of strength on Friday. Traders bought the dip on Friday morning around $89.60 and the stock broke out (again) over its 200-dma. The stock also closed over the August highs, which is bullish. Another positive sign was a new buy signal on the Point & Figure chart, which currently points to a $106 target. We have to be honest. The GSO software index produced a huge breakout last week and looks overbought and due for some consolidation. We like MSTR because shares look less extended and the breakout in MSTR is also a break through resistance at its descending bearish channel. However, a pull back in the GSO software index could hinder any advance in MSTR. More conservative traders might want to consider a tighter stop loss but remember that MSTR tends to be volatile and you might get stopped out on an intraday move. The move on Friday in MSTR looks like a new entry point to buy calls. Yet bear in mind that the 100-dma, directly overhead, might act as resistance. Our target is the $98.75-99.00 range.
BUY CALL SEP 90.00 EOU-IR open interest=405 current ask $6.10
BUY CALL OCT 90.00 EOU-JR open interest=462 current ask $8.50
Picked on August 16 at $ 92.05
Boeing - BA - close: 77.62 change: -0.97 stop: 80.45
There were a lot of headlines for BA on Friday. The earliest news was a deal that BA would buy C-map, a producer of digital maritime cartography. No financials were disclosed on the acquisition. Another headline was news that Monarch Airlines had ordered six of BA's new 787 dreamliner jets. Plus, there was a lot of commentary and articles on the potential end of the C17 military cargo planes that we reported on Thursday night. None of the news helped BA's share price. The stock lost 1.2% in a display of relative weakness. The three-day candlestick pattern looks like a bearish reversal for BA. We remain bearish given the stock's pattern of lower highs. Aggressive traders may want to open positions here while conservative traders might still want to wait for a breakdown under support at $75.00 first. Our target is the $70.50-70.00 range. The P&F chart currently points to a $70 target.
BUY PUT SEP 80.00 BA-UP open interest=3073 current ask $3.20
Picked on August 10 at $ 75.75
Burlington Nor.SantaFe - BNI - cls: 68.45 chg: -0.43 stop: 70.25
The oversold bounce in the Dow transportation index has stalled under its simple 200-dma. Meanwhile the rebound in the Dow Jones Railroad index was stopped at its exponential 200-dma. In a similar manner shares of BNI saw its rally stop cold at round-number resistance near $70, which also happened to be near the top of its bearish channel. This is a tough spot for traders. The transportation index and BNI could really go either way. It could see a bullish breakout over resistance and a potential change in trend or it could see the bounce fade and resume the bearish pattern. We're going to have to stick with the old market maxim that the trend is your friend - so we remain bearish. However, we would hesitate to open new put plays right here. Our target remains the $62.50-60.00 range. The P&F chart currently points to a $49 target. FYI: We would keep an eye on crude oil, which might see more of an oversold bounce from the $70 level and that would put negative pressure on the transports.
Picked on August 08 at $ 68.06
Chipotle Mex Grill - CMG - close: 51.81 chg: -1.27 stop: 54.01
The rally is fading in shares of CMG and the weakness on Friday looks like a new entry point to buy puts. Last week we told readers to expect a bounce into the $52-53 region. The stock shot past our bounce expectations and traded near $54 on the strength in the broader market. Fortunately, CMG failed to breakout past its trendline of lower highs. CMG appears to have moved from its initial bullish channel into a bearish channel over the last couple of months. The Point & Figure chart points to a $39 target. We are targeting a decline into the $45.50-45.00 range.
BUY PUT SEP 55.00 CMG-UK open interest=305 current ask $4.30
Picked on August 09 at $ 50.28
Intuitive Surgical - ISRG - cls: 96.76 chg: -0.24 stop: 101.55
The normally volatile shares of ISRG have been strangely trading in a very non-volatile fashion. The stock has been churning in a relatively narrow range the last few sessions. You may recall the stock plunged lower in late July after reporting its second quarter earnings. We thought the oversold bounce's failed rally near $100 looked like a new entry point to buy puts but we wanted to see confirmation so we suggested a trigger to buy puts at $94.90, under short-term support at $95.00. We were quickly triggered but then the market rallied higher on the tame inflation data. We were surprised to see ISRG fail to truly participate in the market's broad-based rally last week. At this time we're suggesting that traders wait for another decline under $95.00 before considering new put plays. This remains an aggressive, higher-risk play due to ISRG's volatility. Our target is the $87.75-87.50 range. The P&F chart currently points to a $60 target but a move over $101-102 would produce a new buy signal.
BUY PUT SEP 100.0 AXQ-UT open interest=493 current ask $6.30
Picked on August 10 at $ 94.90
NII Holdings - NIHD - close: 51.20 chg: -0.60 stop: 52.51
There was no bullish follow through for NIHD on Friday but the stock remains above round-number support at the $50.00 level. More conservative traders may want to consider an early exit since the major indices have appeared to reverse course into a new bullish trend and this may lead to a breakout higher in NIHD. We're going to keep NIHD as a bearish candidate since the markets do look a little overbought and in need of a pull back. We would not consider new put positions in NIHD until shares traded back under $49.90 again. The P&F chart is still bearish and points to a $41 target. Our target is the $45.50-45.00 range.
Picked on August 07 at $ 49.90
Transocean Inc. - RIG - cls: 68.03 chg: +0.95 stop: 70.25
A bounce in crude oil futures from round-number support near $70 a barrel helped fuel a decent rebound in the oil stocks. RIG actually spiked higher on Friday morning only to pull back and then see traders buy the dip again. The overall pattern is bearish but we've been warning readers to expect a bounce back towards the $70 level, which as broken support should now act as new resistance. We're not suggesting new put plays at this time. The stock has already hit our conservative target at $65.25. Our secondary, aggressive target is the $61 level. Currently the P&F chart points to a $49 target.
Picked on August 07 at $ 69.49
Autozone Inc. - AZO - close: 89.35 chg: +1.16 stop: 90.05
We are just not having any luck with our put plays this past week. Shares of AZO gapped open higher on Friday morning to open at $89.50 and then rally to $90.20 before paring its gains. The move was fueled by some analyst talk that Sears might be looking for an acquisition in the auto parts market and AZO could be a prime candidate. The move on Friday stopped us out at $90.05. Traders might want to keep an eye on AZO. A move over $91 or its 100-dma, currently at 91.17, could be used as a new bullish entry point to buy calls. Alternatively a drop under $88 (87.75) could be used as a new entry point to buy puts.
Picked on August 08 at $ 87.73
Bausch Lomb - BOL - close: 46.39 change: -0.35 stop: n/a
Our strangle on BOL, using August options, has expired. The stock failed to produce any decisive breakouts and the company never announced any second quarter earnings results. Our estimated cost for the strangle was $2.15.
Picked on July 23 at $ 47.40
3M Co. - MMM - close: 71.21 change: +0.01 stop: n/a
Our strangle on MMM, using August options, has expired. In spite of being poised for a big move either direction shares of MMM never traded farther than $2.00 from the $70.00 level except for a brief two-day drop after its earnings report. Our estimated cost was $0.75.
Picked on July 23 at $ 70.72