B.P.Prudhoe Bay - BPT - close: 75.90 chg: -0.17 stop: 72.45
Crude oil suffered some profit taking on Monday and that weighed on the oil sector. However, the bullish market environment helped the oil stocks rebound from their lows of the day. The dip in oil is likely to be temporary and we'd use it as a buying opportunity. Meanwhile the pull back in BPT can also be used as a new buying opportunity. Our target is the $79.75-80.00 range. The P&F chart is bullish with an $85 target. FYI: More conservative traders may want to consider tighter stops.
Picked on November 29 at $ 75.25
Centex - CTX - close: 55.81 change: -0.08 stop: 52.45
Housing stocks were one of the few sectors to close in the red today. The relative weakness appeared to be due to the October report on pending home sales, which fell about 1.7%. In spite of the poor report shares of CTX managed to rebound from its lows of the session. We remain bullish here but a dip back to $55.00 or even $54.00 might be in CTX's short-term future. The P&F chart has produced a spread triple-top breakout buy signal with a $71 target. We have two targets. Our conservative target is the $59.50-60.00 range. Our aggressive target is the $63.50-64.00 range. Be aware that the bottom of CTX's April 2006 gap down near $57.25 might be resistance as may the to of its gap near $60.00.
Picked on December 03 at $ 55.89
Diamond Offshore - DO - close: 78.82 change: -1.77 stop: 75.75
Monday's profit taking in crude oil drug shares of DO to a 2.19% loss. The stock dipped back to broken resistance and what should be new support at its 200-dma and the $78.00 level. We're suggesting readers use the dip as a new buying opportunity. Our target is the $85.00-86.00 range near its early July high. The P&F chart points to a $92 target.
Picked on December 03 at $ 80.59
Enerplus - ERF - close: 46.03 change: +0.03 stop: 43.85
It wasn't much but shares of ERF displayed some relative strength. Most of the energy stocks trended lower due to a decline in crude oil. ERF bounced from its morning lows to close back in the green. We remain bullish with the stock above $45.00. More conservative traders may want to consider a tighter stop loss. Our target is the $50.00-51.00 range.
Picked on November 29 at $ 46.01
EOG Resources - EOG - close: 69.17 change: -1.46 stop: 67.99
It's the same story, different stock, with EOG. As an oil company the stock dipped (for EOG -2%) as crude oil ticked lower. Traders bought the dip in EOG multiple times in the $68.65 region. The afternoon rebound from its lows looks like a new bullish entry point to buy calls. More conservative traders may want to wait for a new rally past $71.00 before starting new positions. Conservative traders may also want to raise their stops. Our target is the $78.00-80.00 range. The P&F chart has a very bullish pattern called a bullish triangle breakout that points to a $94 target
Picked on November 29 at $ 72.06
General Dynamics - GD - cls: 75.30 chg: +0.49 stop: 71.90
Defense stocks did well today with the DFI index breaking out to a new all-time high. Shares of GD responded with a bullish breakout back above the $75 level. Our target is the $78.00-80.00 range. The Point & Figure chart points to an $82 target. More aggressive traders might want to aim higher than $80 (or $82) given the breakout in the sector index.
Picked on November 29 at $ 74.35
KLA-Tencor - KLAC - close: 51.70 chg: +1.05 stop: 49.49
Semiconductor stocks rallied strongly today thanks to some M&A activity in their sector. The SOX rose 1.9% and shares of KLAC surged 2%. The rebound in KLAC today is certainly encouraging and helps reinforce the stock's rising trend. Currently our target is the $54.50-55.00 range.
Picked on November 14 at $ 50.81
KB Home - KBH - close: 51.42 change: -0.62 stop: 47.99
Homebuilders struggled to build on last week's gains after an October report showed that pending home sales slipped about 1.7%. Peering at KBH's chart it looks like shares managed a minor bounce from broken resistance and what should be support at its 200-dma. However, we would not be surprised to see a deeper dip toward the $50 level, which we'd use as a new entry point to buy calls. Traders can choose to open positions now or wait for a potential dip back towards the $50 region. Our target is the $57.50-60.00 range. The P&F chart looks pretty bullish with a spread triple-top breakout buy signal with a $73 target.
Picked on December 03 at $ 52.04
Lockheed Martin - LMT - cls: 92.14 change: +1.79 stop: 87.65
The DFI defense index broke out to new all-time highs. Leading the charge was LMT, which bounced from a test of the $90 level to rally 1.98% and close at its own record high. We don't see any changes from our previous updates and remain bullish. We're going to alter our exit strategy and set two targets. Our conservative target is unchanged in the $94.85-95.00 range. But we're officially adding a secondary, more aggressive target in the $99-100 range.
Picked on November 29 at $ 90.62
Merck Co. - MRK - close: 44.70 change: -0.36 stop: 43.29
Shares of MRK actually started the morning off strong but eventually gave in to selling pressure in the drug index. Weighing on the drug sector was bad news from Dow-component Pfizer, who said that they were ending research on their latest cholesterol drug still in development. Today's session in MRK looks like a bearish failed rally but studying the daily chart you'll note a new MACD buy signal. We would wait for another rally past the $45.00 level before considering new call positions. Our target is the $49.50-50.00 range.
Picked on December 03 at $ 45.06
Petroleo Brasileiro - PBR - cls: 95.58 chg: +1.68 stop: 88.85
PBR bucked the trend in energy stocks today and rallied 1.7% to a new three-month high. The move in PBR was a reflection of the very strong Brazilian markets, which rose more than 3% today. Our target is the $98.00-100.00 range.
Picked on November 29 at $ 91.51
Research In Motion - RIMM - cls: 136.36 chg: +0.68 stop: 129.99
Hmmm... we are starting to grow concerned with the trading in RIMM. The NASDAQ Composite soars 1.45% and RIMM under performs with a 0.5% gain. The trend is still bullish but momentum is definitely slowing down. We'd hesitate to open new plays at this time. Our target is the $142.00 level.
Picked on November 28 at $134.29
Sepracor - SEPR - close: 57.82 chg: +2.52 stop: 53.61
Monday proved to be a strong day for SEPR. The stock got an upgrade to a "buy" this morning. Plus, there was chatter today that after Pfizer's disappointment with their latest cholesterol drug the company might go on a shopping spree to buy new medicines. SEPR was mentioned as a potential target for PFE. SEPR's market cap is around $6.3 billion while PFE has about $13 billion in cash (source: AP). Our target for SEPR is the $59.50-60.00 range.
Picked on November 19 at $ 54.69
Thomas & Betts - TNB - close: 52.74 chg: +0.68 stop: 49.90
TNB jumped higher this morning and closed with a 1.3% gain. The rally today is a bullish breakout over short-term resistance at the 10-dma and its two-week trendline of lower highs. The move looks like a new entry point to buy calls. The next hurdle is resistance at the $54.00 level. Our target is the $56.00-57.00.
Picked on November 12 at $ 51.36
Valero Energy - VLO - close: 55.69 change: -0.16 stop: 52.85
Traders were very quick to buy the dip in VLO this morning near the $55.00 level. We see the afternoon bounce from $55 as a new entry point to buy calls. Our target is the $59.50-60.00 range. Keep an eye on the 100-dma near $56.25 since it might act as short-term overhead resistance.
Picked on December 03 at $ 55.85
Genzymme - GENZ - close: 63.27 change: +0.50 stop: 66.05
Monday's market action proved to be rather bullish with a widespread rally including a 1.3% gain for the BTK biotech index. Shares of GENZ produced an oversold bounce and a 0.79% gain. However, the afternoon strength in GENZ began to fade under the $64 level. This may prove to be a failed rally and a new entry point to buy puts. However, we would suggest a high-level of caution before opening new put plays with the major averages showing so much strength. The P&F chart has already produced quadruple-bottom breakdown sell signal with a $55 target. We are suggesting puts with GENZ under $64.00. Our target is the $58.00-56.00 range. We're setting the initial stop loss at $66.05 but more conservative traders might want to try with a tighter stop (maybe around 64.85).
Picked on December 03 at $ 62.77
NewMarket - NEU - close: 62.14 change: +1.82 stop: 62.25
A broad-based market rally and a drop in oil helped fuel a 3% oversold bounce in NEU. NEU was challenging support so we're not surprised by the bounce. We wanted to see more confirmation and that's why we're suggesting a trigger at $58.25 to open positions. IF NEU continues to show a lot of strength we'll drop it as a bearish candidate. Currently we're just spectators at this time. If triggered at $58.25 our target would be the $52.50-52.00 range.
Picked on December xx at $ xx.xx <-- see TRIGGER
(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.)
Caterpillar - CAT - close: 61.49 chg: +0.30 stop: n/a
We are not suggesting new positions at this time and don't see any changes from our previous updates. Our estimated cost was about $0.75. We want to exit if either options rises to $1.50. The options in our strangle are the December $65 call (CAT-LM) and the December $55 put (CAT-XK).
Picked on November 08 at $ 60.10
Blue Nile - NILE - cls: 33.69 chg: +0.29 stop: n/a
NILE is trying to bounce but it struggled to hold any gains over the $34.00 level. 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
Kohl's - KSS - close: 70.74 change: +1.65 stop: 72.05
Monday's 2.38% gain in KSS might just be a temporary bounce but we're suggesting an early exit to cut our losses now. There was no follow through lower on Friday's failed rally. Plus, today's push past the $70 level and its 50-dma and 10-dma looks a bit too strong for us. We would keep an eye on KSS for a breakdown under $68.25 as a potential entry point for new bearish positions.
Picked on December 03 at $ 69.09