Cymer Inc. - CYMI - close: 44.00 chg: +0.05 stop: 39.95
The markets, if you're watching the Dow Industrials, the NASDAQ Composite and the S&P 500, turned in a pretty strong week. Yet sadly the SOX and shares of CYMI posted a failed rally on Friday. The SOX looks worse with a definite pull back from its highs on Friday. Meanwhile CYMI tagged round-number resistance near $45.00 Friday morning and then pulled back to spend the rest of the day trading sideways. Some of the short-term technical indicators are also suggesting this might be a short-term top for CYMI. We are not suggesting new positions at this time. Something to keep in mind is that while the first two weeks of September bucked the historical trend of weakness the next four weeks have a very strong history of weakness for stocks. More conservative traders may want to exit early or tighten their stop loss on CYMI.
Picked on September 06 at $ 42.55
Hartford Finc. - HIG - close: 87.04 chg: +1.16 stop: 82.99
We are growing more wary of the current rally in stocks that's not stopping shares of HIG from showing relative strength. The bounce from the $86.00 level is a new entry point to buy calls. The rally this past week has produced a new MACD buy signal on the weekly chart and daily chart technicals are already bullish. The Point & Figure chart is already bullish with a triple-top breakout buy signal with a $102 target. Our target is the $91.50-92.00 range, near its May highs. However, we do expect some resistance in the $89-90 region. We do not want to hold over the early November earnings report.
BUY CALL OCT 85.00 HIG-JQ open interest=686 current ask $3.40
Picked on September 12 at $ 86.29
Manpower - MAN - close: 60.90 chg: -0.62 stop: 57.99
MAN produced a powerful rally and bullish breakout midweek last week. The move was strong enough to push shares of MAN through resistance at its 50-dma and at the $60.00 level. The surge higher also reversed the P&F chart from a sell signal into a new buy signal with a $77 target. Unfortunately, the rally has struggled to make it past the $62.50 level and its 100-dma. We have been suggesting that readers look for a dip to or a bounce from the $60.00 level as a new entry point to buy calls. The $60.00 mark is broken resistance so it should offer some support. However, we're cautious on the market's strength so more conservative traders may want to tighten their stops (suggestions are 59.45 or $58.99). We're leaving our stop at $57.99 for now. Currently our target is the $65.00-66.00 range.
Picked on September 12 at $ 60.28
Mettler Toledo - MTD - close: 65.43 chg: +0.75 stop: 59.99
Another day, another gain for this technical instrument maker. The stock has really seen a very strong rally since the bounce from technical support at its 200-dma about two weeks ago and the bullish breakout over resistance three to four days ago. Volume has been rising on the rally, which is a good sign for the bulls. The P&F chart has produced a triple-top breakout buy signal with a $78 target. The rally this past week has produced a new MACD buy signal on the weekly chart. Overall everything looks great for the bulls except now we need to prepare for some profit taking since MTD is starting to look short-term overbought. The consolidation may not happen on Monday but it could be soon. Friday's close at its high for the day is actually another bullish signal for Monday. We're not suggesting new positions at this time. Our target is the $68-69 range. Please note that we normally try to avoid playing stocks with average volume this low so traders may want to consider this a higher-risk play. We do not want to hold over the late October earnings report.
Picked on September 13 at $ 63.66
Omnicom - OMC - close: 92.32 chg: -0.05 stop: 88.84
Overall the pattern for OMC remains bullish but short-term the upward momentum has stalled. Short-term technical indicators are pointing lower and we've been suggesting that readers wait for a dip back toward the 10-dma (90.80) or even the $90 region. Broken resistance in the $90.00-90.50 range should now offer some support. The weekly chart's MACD has a new buy signal and the P&F chart is very optimistic with a $131 target. Our target is the $96.00-96.50 range. We would definitely wait for the pull back and signs of a bounce before considering new call positions. We do not want to hold over the late October earnings report.
Picked on September 10 at $ 90.97
United Ind. - UIC - close: 54.90 change: +1.14 stop: 51.45*new*
Defense related stocks are still showing some strength. The DFI index has just spent the last two weeks consolidating sideways after a bullish breakout over resistance near the 1100 level. This is one of the few sector indices that actually looks like it could begin a new leg higher. Meanwhile the bounce in UIC continues. The stock's consolidation ended after four days of profit taking and now UIC is once again hitting our initial target in the $54.75-55.00 range. Short-term technical indicators are bullish again. The P&F chart remains bullish and points to a $64 target although we see resistance on the P&F chart near $59. Our suggested strategy was to sell all or part of the position at the first target and then sell the rest at our secondary target of $57.50. We're going to adjust our stop loss to $51.45, which is under the September 6th low. UIC's next hurdle is the high two weeks ago near $55.50.
Picked on August 27 at $ 51.77
EOG Resources - EOG - close: 59.84 chg: +1.12 stop: 64.15
Crude oil futures marked another loss on Friday but they rebounded from their lows. The commodity is looking pretty oversold and due for a bounce. In a similar manner EOG managed a bounce from its lows and produced a 1.9% gain. The lack of follow through on yesterday's drop suggests that EOG may be due for more of a rebound. We are not suggesting new put positions at this time. Instead it's probably a good idea to lock in some profits here. We would look for a bounce back toward the 10-dma (near $62) and potentially back toward the $63.00-63.50 region. A failed rally at either level could be used as a new entry point but keep an eye on crude futures. We're still worried that the Iran issue might flare up again. Our target is the $57.50-55.00 range. The P&F chart points to a $48 target.
Picked on September 06 at $ 63.85
Express Scripts - ESRX - close: 82.68 chg: -0.19 stop: 82.51
We are still sitting on the sidelines waiting for a breakout in ESRX. The stock has been trading sideways in the $80-85 range for six weeks. Friday's failed rally near $85 saw an increase in volume and the short-term technicals are suggesting that the next move is down. Taking into account that the next four weeks are usually a very bearish time period for stocks odds are definitely growing in favor of a breakdown. We're suggesting a trigger to buy puts at $79.85. If triggered our target is the $75.50-75.00 range.
BUY PUT OCT 85.00 XTQ-VQ open interest=258 current ask $4.00
BUY PUT NOV 80.00 XTQ-WP open interest=590 current ask $3.10
Picked on September xx at $ xx.xx <-- see TRIGGER
Johnson Controls - JCI - close: 71.86 chg: -1.09 stop: 74.16
It looks like the Ford (F) news on Friday undermined the rally in anything auto-related. Shares of JCI produced a bearish engulfing candlestick (bearish reversal) with Friday's 1.49% loss. We had been growing more worried that JCI would stop us out so the reversal is a welcome event. Friday's reversal can be used as a new entry point to buy puts. Conservative traders could tighten their stop loss toward Friday's high. Our target remains the $68.50-67.50 range. The P&F chart is more bearish with a $56 target.
BUY PUT OCT 75.00 JCI-VO open interest=442 current ask $4.30
Picked on August 22 at $ 72.96
Fluor - FLR - close: 77.91 change: -1.08 stop: 84.05
Target achieved. FLR continued to show relative weakness on Friday morning with a spike down to $75.01 before bouncing back from round-number support. Volume on the move was pretty high. Our target was the $75.50-75.00 range. We could not find any specific news to account for the spike lower. Given the sharp intraday bounce we would expect the rebound to continue until FLR hits $80 or broken support/resistance near $82.00. Readers can keep an eye on FLR for a failed rally under either level as a potential entry point for new put plays.
Picked on September 10 at $ 81.74