CNOOC Ltd - CEO - close: 86.62 change: +2.51 stop: 82.89
The Chinese stock market (the Shanghai Composite) surged to a new relative high on Thursday. The market strength and another surge in crude oil futures (+2%) helped CEO breakout over resistance at the $85.00 level. We were suggesting a trigger to buy calls at $85.25. Unfortunately, the stock gapped open at $85.52, which would have immediately opened the play for us. The stock continued to rally and closed up 2.98% on strong volume. Now that the play is open our target is the $89.50-90.00 range.
Picked on November 09 at $ 85.52 *gap higher*
Cerner Corp. - CERN - close: 49.27 chg: -0.58 stop: 46.90
We are a little disappointed that the big rally in networking giant CSCO failed to rub off on shares of CERN. The overall pattern in CERN is bullish given the breakout over $48.00 but momentum is fading and that's affecting the short-term technical indicators. A bounce from the 10-dma or the $48.00 level could be used as a new entry point but we'd be cautious about opening new plays here. Our target is the $52.00-52.50 range.
Picked on October 30 at $ 48.05
Deere & Co. - DE - close: 86.60 change: -0.85 stop: 83.99
After three days of gains the major market indices hit some profit taking. Shares of DE lost 0.9%. The pull back can be used as a new entry point to buy calls although more conservative traders may want to wait for signs of a bounce first. We suspect that DE will rally into its November 21st earnings report. There is probably some resistance at its October high (90.47) but shares have more significant resistance near $92.00-92.50 from last May. We'll use a $91.50-92.00 target. We do not want to hold over the November earnings report.
Picked on November 08 at $ 87.45
Fomento Econo. - FMX - close: 100.83 chg: -1.26 stop: 97.99
FMX failed to breakout over the $102.60 level and Tuesday's high. We remain bullish with the stock above $100 and would use the pull back as a new entry point but more conservative traders may want to wait for a new relative high before opening positions. The MACD on the daily chart just produced a new buy signal. We're going to start the play with a stop loss at $97.99 but more conservative traders may want to stick their stop under Wednesday's low (99.12). Our target is the $107.00-110.00 range.
Picked on November 08 at $102.09
GlobalSantaFe - GSF - close: 54.55 chg: -0.84 stop: 49.39
Caution! The trading in GSF on Thursday looks like a short-term bearish reversal. Shares traded to $56.44 and then plunged back under its simple 200-dma. Optimistically we'd like to see a bounce from broken resistance and what should be support near $54.00. More conservative traders may want to tighten their stops. Our target is the $57.50-58.00 range.
Picked on November 05 at $ 52.39
Holly Corp. - HOC - close: 50.95 change: +1.07 stop: 47.95
Crude oil futures rallied to a 2% gain and closed back over $61 a barrel on Thursday. This lifted the oil sector and shares of HOC added 2.1%. The rebound in HOC looks like another entry point to buy calls. Our target is the $54.90-55.00 range.
Picked on November 05 at $ 50.75
Petroleo Brasileiro - PBR - cls: 92.27 chg: +0.31 stop: 85.65
PBR joined most of the oil sector and traded higher on Thursday but shares closed off their best levels of the session. Readers may want to wait and watch for another dip or bounce near $90 as a new entry point. Our target is the $95.00-96.00 range. FYI: PBR is a Brasilian stock traded as an ADR here in the U.S. One risk traders are facing is the company's earnings report. We cannot find a specific date or even a history of recent earnings reports. The risk is that they announce a negative report while we're trading them.
Picked on November 06 at $ 90.05
FreightCar Amer. - RAIL - close: 54.82 change: -1.26 stop: 53.49
The markets snapped a three-day winning streak and the transports were unable to avoid the profit taking. Shares of RAIL lost 2.2% and gave back much of yesterday's gains. Aggressive traders can buy this dip. We would wait for a new move over $55.00 or $55.50 before considering new bullish positions. Our target is the $59.75-60.00 range.
Picked on November 08 at $ 56.08
Transocean - RIG - close: 76.57 change: -0.62 stop: 71.99
Crude oil futures traded strongly higher on Thursday but that didn't stop the oil services sector from giving into the widespread profit taking. Shares of RIG lost 0.8% after touching a new relative high at $78.50 midday. We're not suggesting new positions at this point. Watch for a bounce near $75 again. We have two targets. Our conservative target is the $79.50 level. Our aggressive target is the $84.00 level.
Picked on November 05 at $ 75.07
Schlumberger - SLB - cls: 64.97 chg: -0.31 stop: 60.95
SLB is another oil service stock that was unable to avoid the profit taking on Thursday. Shares hit $66.24 before sliding back under the $65 level. A bounce near $64 could be used as a new bullish entry point. Currently our target is the $67.50-68.00 range.
Picked on November 05 at $ 63.50
Vimpel Comm. - VIP - close: 65.86 chg: +0.33 stop: 62.49
VIP is trending higher again and today's gain was a decent follow through on yesterday's intraday bounce. However, we're not suggesting new positions at this time. More conservative traders may want to exit early here. Don't forget that we're dealing with a rising environment of risk due to the earnings report. The company is expected to report this month but we can't find a specific date. Estimates for when VIP will announce range from November 7th to November 23rd. Our target is the $67.50-70.00 range.
Picked on October 12 at $ 62.17
Alcon Inc. - ACL - close: 102.44 chg: -2.34 stop: 110.01
Drug stocks continued to sell-off as investors reacted to a house and now a senate controlled by democrats. Shares of ACL lost 2.2% and closed at a new three-month low. More conservative traders may want to tighten their stops toward the $108 level. Our target is the $100.10-100.00 range.
Picked on October 31 at $105.75
Advanced Micro Dev. - AMD - cls: 20.89 chg: -0.36 stop: 22.05
The SOX semiconductor index produced a failed rally under its simple 200-dma, which is good news for the bears. The trading in the SOX over the past couple of months is starting to look like a bearish head-and-shoulders pattern with the last few days forming the right shoulder. Shares of AMD lost 1.69% as it followed the sector index lower. Aggressive traders may want to open new positions here. More conservative traders can wait for a decline under support near $20.00. Our target is the $17.50-17.00 range.
Picked on October 29 at $ 20.86
Amazon.com - AMZN - close: 38.84 chg: -0.63 stop: 40.25
Shares of AMZN failed under resistance at the $40.00 level after a week's worth of gains. This may be the sort of failed rally we've been looking for as a new entry point to buy puts. However, we're suggesting a bit of caution considering the stock's recent relative strength. Traders may want to use a tighter stop loss if you're just now opening plays. Our target is the $35.00-34.00 range.
Picked on October 29 at $ 38.24
Cardinal Health - CAH - cls: 63.31 chg: -0.17 stop: 64.85
We do not see any changes from our previous updates on CAH. Right now we're waiting for a breakdown under support at $63 and again near $62.35. Our suggested entry point to buy puts is $61.99. If triggered our target is the $58.00-57.50 range. Be prepared for a bounce on CAH's initial test of the $60 level.
Picked on November xx at $ xx.xx <-- see TRIGGER
Capital One Finc. - COF - cls: 76.42 chg: -1.08 stop: 80.05
Financial stocks could not avoid the profit taking today and COF under performed the markets and its peers with a 1.39% decline. Today's move is a failed rally under its 50-dma and it produced another bearish engulfing candlestick pattern. Our target is the $75.10-75.00 range.
Picked on October 31 at $ 79.33
Centex - CTX - close: 48.80 change: -0.85 stop: 52.55
Housing stocks continue to move lower. Shares of CTX lost 1.7% with the trading over the last two days now looking like a failed rally under the $50 level and its 100-dma. Our target is the $45.50-45.00 range.
Picked on November 07 at $ 49.75
Freeport McMoran - FCX - cls: 60.83 chg: +1.78 stop: 62.01
Whoa! FCX completely reversed yesterday's losses and bearish breakdown. A drop in the dollar and a rise in crude oil helped fuel a big move in gold. The rest of the metals sector turned higher in association with the precious metal. FCX has resistance at the $62 level and the technicals still look like the stock is poised to move lower. However, today's reversal is dangerous! If you opened positions today you may just want to exit early right now to limit any losses. We're going to keep the play open and see if FCX reverses under the $62 level. Aggressive traders could use a failed rally under $62 as a new entry point but we're not suggesting new positions at this time. If we don't get stopped out we have two targets on FCX. Our conservative target is the $55.25-55.00 range. Our aggressive target is the $51.00-50.00 range.
Picked on November 08 at $ 59.05
Lehman Brothers - LEH - cls: 71.39 chg: -2.91 stop: 75.55*new*
The broker-dealers were hit with some heavy profit taking. LEH lost 3.9% on big volume and broke down under its 50-dma. The stock is nearing our target in the $70.25-70.00 range. We're lowering our stop loss to $75.55.
Picked on November 05 at $ 74.43
Pantry Inc. - PTRY - close: 50.99 change: -0.64 stop: 56.01
PTRY continues to slide lower. The stock lost 1.2% on above average volume on Thursday. We are expecting a bounce on its initial test of the $50 level. Our target is the $48.00-47.50 range. We do not want to hold over the November 16th earnings report. FYI: More conservative traders may want to exit early and lock in a profit near $50.00.
Picked on October 29 at $ 54.05
Univ.Forest Prod. - UFPI - cls: 44.04 chg: -0.48 stop: 48.05
UFPI is still slowly sinking. We don't see any changes from our previous updates. More conservative traders may want to think about tightening their stops toward the $46 level. We're aiming for a decline into the $41.00-40.00 range.
Picked on October 24 at $ 46.13
Washington Group. - WGII - cls: 54.47 chg: -0.93 stop: 58.75
WGII dipped to $53.70 before bouncing back this afternoon. Volume was very strong for the second day in a row. The pattern is bearish but the intraday chart looks like WGII is poised to bounce back toward the $56 level. We're expecting $56.00 and its 200-dma to act as overhead resistance. A failed rally under $56 could be used as another entry point. Today's decline under $55 produced a new sell signal on its P&F chart with a $45 target. Our target is the $51.00-50.00 range.
Picked on November 08 at $ 55.40
(What is a strangle? It's when a trader buys an out-of-the-money (OTM) call and an OTM put on the same stock. The strategy is neutral. You do not care what direction the stock moves as long as the move is big enough to make your investment profitable.)
Bear Stearns - BSC - cls: 144.41 chg: -4.33 stop: n/a
BSC's decline is starting to pick up speed. Shares lost 2.9% and broke down under potential support at the $145 level today. We are not suggesting new positions at this time. The options in our strangle are the November 155 call (BSC-KK) and the November 145 put (BSC-WI). Our estimated cost was $4.00. We're planning to exit if either option rises to $6.00 or more. FYI: Don't forget that November strikes expire in less than two weeks. Currently the November $145 put is trading at $2.25bid/$2.40ask. More conservative traders may want to try and exit at breakeven given our short time frame.
Picked on October 22 at $150.19
Caterpillar - CAT - close: 59.20 chg: -0.90 stop: n/a
Shares of CAT crossed through the $60.00 level a couple of times giving us opportunities to open new strangle plays. Our preferred entry was at the $60 mark but we suggested a $60.50-59.50 entry range. The options in our strangle are the December $65 call (CAT-LM) and the December $55 put (CAT-XK). Our estimated cost was about $0.75. We want to exit if either options rises to $1.50.
Picked on November 08 at $ 60.10
Cephalon - CEPH - close: 74.28 change: -0.31 stop: n/a
Shares of CEPH were resilient on Thursday with a minor 31-cent decline. However, if the biotech sector continues to see further profit taking we'd expect CEPH to join it. We're not suggesting new positions at this time. The options in our strangle are the December $75 call (CQE-LO) and the December $65 put (CQE-XM). Our estimated cost was $3.45. We plan to see if either option rises to $4.90 or more.
Picked on October 29 at $ 69.35
ConocoPhillips - COP - close: 63.31 chg: +0.94 stop: n/a
COP rallied to $64.24 on an intraday basis thanks to a 2% gain in crude oil futures. Volume came in above average. We have just over a week left before November options expire. Our target is breakeven at $1.15 but more conservative traders may want to try and exit at a fraction of our estimated cost (50%, 75%, etc) to salvage their capital. We're not suggesting new positions. Our suggested options were the November $65 call (COP-KM) and the November $55 put (COP-WK).
Picked on October 15 at $ 60.03
Blue Nile - NILE - cls: 35.53 chg: -0.60 stop: n/a
NILE is starting to turn lower again after its recent consolidation sideways. We're not suggesting new positions at this time. Our estimated cost was $2.40 and we're planning to sell if either side of our strangle rises to $3.90. The options in our suggested strangle are the January $45 call (JWU-AI) and the January $35 put (JWU-MG).
Picked on October 29 at $ 38.92
Grainger - GWW - close: 70.42 change: -1.91 stop: 69.99
We are going to abandon our new play in GWW. The stock was downgraded this morning to a "market perform" and traders panicked producing a 2.6% sell-off in the stock on strong volume. GWW might have support at the $70.00 level but today's decline is a technical breakdown below the 200-dma and more importantly it is a breakdown below its multi-month bullish channel. We're exiting early to avoid further losses. More nimble traders may actually want to consider put options if GWW trades under $70 or its 50-dma (near 69.40).
Picked on November 08 at $ 72.62