B.P.Prudhoe Bay - BPT - close: 75.43 chg: -0.07 stop: 73.75
Oil stocks struggled to maintain any gains on Monday as crude oil slipped more than 80 cents to close under $62 a barrel. Shares of BPT spent most of the session trading sideways and eventually closed in the red but shares remain above round-number support at the $75.00 level and its 200-dma. We would view a bounce near $75 as a new entry point to buy calls but bear in mind that crude may continue to trade flat to down over the next couple of days. Our target is the $79.75-80.00 range. The P&F chart is bullish with an $85 target.
Picked on November 29 at $ 75.25
Biosite - BSTE - close: 48.94 change: -0.38 stop: 47.95
Biotech stocks continued to see some selling pressure on Monday but aside from a few stock-specific movers the sector traded sideways. BSTE lost 0.77% but did so on below average volume, which doesn't suggest a lot of downward pressure. We would wait for a rally past $50.25 before considering new call positions. Our target is the $54.50-55.00 range. FYI: The P&F chart points to a $65 target.
Picked on December 05 at $ 50.05
Centex - CTX - close: 56.15 change: +0.02 stop: 53.99
The homebuilders popped higher on Monday morning but by the closing bell had given back most of their gains. That pattern held true for shares of CTX, which closed virtually unchanged. The lack of upward momentum contributes to the growing bearish technical picture. We would wait and watch for a bounce near its 10-dma or the $55.00 level as a new entry point to buy calls. Broken resistance near $55 should now offer support. Currently 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. FYI: The Point & Figure chart points to a $77 target.
Picked on December 03 at $ 55.89
Diamond Offshore - DO - close: 81.50 change: +0.40 stop: 76.99
DO displayed some relative strength on Monday. Traders bought the dip on Monday morning near $80.00 and the stock closed with a 0.49% gain. The move looks like a new entry point to buy calls. 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: 46.31 change: +0.25 stop: 44.45
ERF also displayed some relative strength today with a 0.5% bounce to out perform its peers and the broader markets. We remain concerned about potential resistance at the 50-dma directly overhead and the lack of momentum in the MACD indicator. Traders may want to tighten their stop loss toward the $45.00 level. We would not suggest new bullish positions at this time. The Point & Figure chart is bullish and points to a $64 target but shows potential resistance near $52. We are aiming for a rise into the $50.00-51.00 range.
Picked on November 29 at $ 46.01
General Dynamics - GD - cls: 74.62 chg: +0.48 stop: 73.39
Investors bought the dip in GD on Monday morning and the intraday chart action looks relatively bullish for tomorrow. Unfortunately some of the daily chart's technical indicators are still suggesting a bearish move after last week's pull back. Traders can choose to buy this bounce or wait for a new move over $75.00. More importantly you might want to wait and see the market reaction to the Fed meeting tomorrow before opening new positions. Our target is the $78.00-80.00 range. The Point & Figure chart points to an $82 target.
Picked on November 29 at $ 74.35
KB Home - KBH - close: 51.64 change: +0.10 stop: 49.45
We are pleasantly surprised by the relative strength in KBH on Monday. Last Friday the company issued some bearish comments after the closing bell and there was new data on its investigation into its executive option plan. We were expecting a knee-jerk reaction lower this morning but it failed to appear. It looks like an analyst firm upgrade and a higher price target before the opening bell may have short circuited any potential sell-off. We remain bullish on KBH with the stock above $50.00 and readers might want to buy today's bounce from its rising 10-dma.
Picked on December 03 at $ 52.04
L-3 Comm. - LLL - close: 82.43 change: -0.39 stop: 79.99
LLL continued to dip on Monday but as expected traders bought the dip near broken resistance, now new support, at the $82.00 level. We see the intraday bounce near $82 as a new entry point to buy calls. Our target is the $88.00-90.00 range.
Picked on December 04 at $ 83.81
Lockheed Martin - LMT - cls: 91.33 change: -0.49 stop: 87.65
There is no change from our weekend update on LMT. Shares continued to trade sideways hugging its simple 10-dma. We believe that investors are just waiting for tomorrow's FOMC meeting. In the news today LMT announced it had won a couple of more contracts for various military aircraft. More conservative traders may want to raise their stops. We have two targets. Our conservative target is the $94.85-95.00 range. Our more aggressive target is in the $99-100 range.
Picked on November 29 at $ 90.62
Sepracor - SEPR - close: 56.57 chg: -0.71 stop: 54.69
SEPR continues to consolidate lower. The stock lost 1.2% and is now in jeopardy of breaking down under its 10-dma. The technical indicators continue to worsen due to a lack of upward momentum. We warned readers over the weekend to expect a dip toward $56 and SEPR delivered one midday. We are not suggesting new plays at this time. Our target for SEPR is the $59.50-60.00 range.
Picked on November 19 at $ 54.69
Valero Energy - VLO - close: 55.74 change: +0.83 stop: 53.45
Good news! VLO rebounded early this morning. As of Friday the stock looked in trouble with a bearish breakdown under $55.00. Fortunately, there was no follow through and traders bought the dip. The stock rose 1.5% and looks poised to move higher. Readers may want to use today's rise past $55 as a new entry point. Our target is the $59.50-60.00 range.
Picked on December 03 at $ 55.85
MEMC Electronic - WFR - close: 43.32 change: +0.92 stop: 39.49
WFR continues to out perform its peers and the SOX index. The stock rose 2.16% following Friday's intraday rebound. We don't see any changes from our weekend play description. Our target is the $47.50-50.00 range. The P&F chart is bullish with a $48 target.
Picked on December 10 at $ 42.40
Expeditors Intl.- EXPD - close: 43.05 change: -0.63 stop: 46.05
EXPD continued to slide on Monday. Shares lost 1.44% on rising volume and confirmed last week's breakdown under a number of support levels. We don't see any changes from our weekend play description. If the transport sector suddenly sees some strength readers can watch for EXPD to find resistance near the $45 level and a failed rally under $45 can be used as another entry point. Our short-term target is the $40.15-40.00 range. More aggressive traders may want to aim for the August lows.
Picked on December 10 at $ 43.68
Genzymme - GENZ - close: 62.12 change: -0.12 stop: 66.05
The biotech sector traded flat to down and GENZ followed suit. In the news today there was a report about the latest Phase III study on Campath, a drug being developed by GENZ and Bayer(Schering), was producing positive results as therapy for chronic lymphocytic leukemia. The press release didn't do anything to help shares of GENZ and we don't see any changes from our weekend update. The Point & Figure chart looks pretty bearish with a quadruple-bottom breakdown sell signal with a $51 target. Our target is the $58.00-56.00 range. More conservative traders may want to think about tightening their stops toward the $64 level.
Picked on December 03 at $ 62.77
NewMarket - NEU - close: 61.07 change: -0.96 stop: 62.25
We do not see any changes from our previous updates on NEU. Aggressive traders might want to consider new positions. We're still waiting on a breakdown. We want to see a drop under the early December low so we're suggesting a trigger to open positions at $58.25. If triggered our target will be the $53.50-52.50 range, which is an adjustment from our original target due to potential support at its rising 200-dma.
Picked on December xx at $ xx.xx <-- see TRIGGER
Yahoo! Inc. - YHOO - close: 26.49 chg: +0.15 stop: 27.05
There are no changes from our new play description on YHOO. The stock is still bouncing above support near $26.00. Technicals are bearish and the P&F chart points to a $16 target. We are suggesting that readers wait for a breakdown under support near $26.00 and its 50-dma. Therefore we're suggesting a trigger to buy puts at $25.85. If triggered our target is the $22.65 level near the October low. More aggressive traders may want to aim lower.
Picked on December xx at $ xx.xx <-- see TRIGGER
YUM Brands - YUM - close: 59.50 change: -0.22 stop: 60.51
Some positive analyst comments for YUM this morning helped send the stock higher. Yet once YUM came close enough to "fill the gap" from Friday morning the stock reversed lower again. This failed rally looks like a new entry point to buy puts. However, we want to see more confirmation so we are suggesting a trigger to open plays at $58.49. If triggered our target will be the 55.75-55.00 range. After the closing bell today a news report hit the wires stating that the U.S. health department was "not ready to declare the Taco Bell E.coli out break over" (source:Reuters). This is likely to put more pressure on the stock tomorrow.
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: 63.07 chg: -0.33 stop: n/a
No change from our previous updates on CAT. We're not suggesting new positions. 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: 33.49 chg: +0.17 stop: n/a
CAUTION! After the close of trading today Standard & Poors announced plans to replace Lone Star steak house with NILE in the S&P SmallCap 600 index. That means that funds who track the smallcap index will eventually need to replace their shares of STAR with shares of NILE. This news could ruin a play that has thus far been moving in our favor. The reaction in after hours was sharp with the stock trading near $35.00. We would expect a gap open higher tomorrow. If NILE doesn't gap higher more conservative traders may want to exit early immediately. 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
Thomas & Betts - TNB - close: 49.98 chg: -2.84 stop: 49.90
We have been stopped out of TNB at $49.90. Investors reacted quickly to news that another player in the industry, Hubbell, issued an earnings warning. TNB sold off as traders tried to lock in profits for fear that TNB might also miss estimates. Volume was very big on today's bearish breakdown below support.
Picked on November 12 at $ 51.36