B.P.Prudhoe Bay - BPT - close: 75.40 chg: +0.10 stop: 73.75
A drop in the weekly oil and gas inventory report helped spark a rebound in crude oil futures. This fueled some strength in the energy sector but oil services got the biggest boost today. Shares of BPT are still consolidating above support at the $75.00 level but the bounce was rather anemic. Yesterday we suggested readers wait for a rise past $75.75 before opening new positions and the high today was $75.74. Buying this bounce is not necessarily a bad idea but you might want to consider tightening your stop loss toward the $75.00 level to significantly reduce risk. 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: 48.91 change: +0.01 stop: 47.95
The DRG drug index barely budged all day while the BTK biotech index continued to see profit taking. Together they left BSTE without any sector support to mount a rebound. Yesterday we suggested that more conservative traders may want to exit early and we repeat that suggestion today. We hesitate to even comment on the intraday rebound this afternoon that have shares of BSTE poised to move higher tomorrow. If we don't see a bounce tomorrow we'll close this play early to limit any losses. 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: 56.64 change: +0.44 stop: 54.49 *new*
The homebuilders displayed some strength this morning but again the group and shares of CTX failed to really build on the move and gave back much of its gains. While the trend in CTX is up the momentum has vanished and we're concerned that investors might be just selling into any strength before the sector sees a more significant dip. A rally past $57.50 would be encouraging but we hesitate to buy new positions. We are going to inch up our stop loss to $54.49. 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: 82.16 chg: +1.56 stop: 77.99 *new*
A rally in crude oil futures helped fuel a rise in the energy sector. Oil service stocks garnered the most attention from the bulls. Shares of DO got an extra boost after one analyst firm started coverage on the stock with an "out perform" this morning. We remain bullish on shares of DO with the stock above $80.00. We are going to adjust our stop loss to $77.99, since DO appears to have some support at $78.00. 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: 46.21 change: +0.15 stop: 44.95*new*
Shares of ERF seem to be floating sideways in no-man's land. The technicals are mixed with both bullish and bearish signals but it's clear that the upward momentum has died. The lack of movement is bad news for option holders (that's us) so more conservative traders may just want to exit early now to avoid further losses. We're not suggesting new positions at this time and we're raising the stop loss to $44.95. 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
KB Home - KBH - close: 51.79 change: +0.60 stop: 49.95 *new*
KBH was another homebuilder that saw most of its early gains vanish. The stock spiked to $52.88 this morning but eventually closed down to close with a 1.1% gain. We remain cautious here especially with the bearish turnaround in the technical indicators. We're not ready to close this play early just yet KBH still trading above support near $50.00 and its simple 200-dma, however we would not suggest new positions at this time but keep your eye on a bounce from the $50 level. Please note that we're inching up our stop loss to $49.95.
Picked on December 03 at $ 52.04
L-3 Comm. - LLL - close: 82.03 change: +0.30 stop: 79.99
Traders initially bought the dip this morning but the rebound in LLL seemed to run out of steam by the closing bell. Currently the stock is flirting with old resistance and what should have been support at the $82.00 level. We'd suggest waiting for a rally past today's high of $82.37 before considering new bullish positions. The $80.00 mark should offer additional support as should the 50-dma near $80. Our target is the $88.00-90.00 range.
Picked on December 04 at $ 83.81
Lockheed Martin - LMT - cls: 89.94 change: -0.98 stop: 88.99*new*
Warning! The trading in LMT took a turn for the worse today. Shares lost 1% and closed under what should have been support at the $90.00 level. We suggest that readers put their finger on the eject button and prepare to exit. More conservative traders will want to seriously consider exiting early right here especially with the new sell signal in the MACD indicator. We're raising our stop loss to $88.99. More aggressive traders may want to leave their stop under the rising 50-dma near $88.50. 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: 56.75 chg: -0.48 stop: 55.74*new*
Caution! SEPR gave back all of yesterday's gains. Furthermore the stock produced a bearish reversal in the form of a bearish engulfing candlestick pattern. The move today also produced a new MACD sell signal. We're not suggesting new positions and more conservative traders may want to exit early. Please note we're adjusting our stop loss to $55.74. Our target for SEPR is the $59.50-60.00 range.
Picked on November 19 at $ 54.69
Valero Energy - VLO - close: 54.54 change: -0.17 stop: 53.99*new*
Oil stocks ticked higher today thanks to strength in the crude oil market. However, shares of VLO under performed its peers with another failed rally under its 100-dma and exponential 200-dma. The technical picture is growing more bearish. We are strongly considering an early exit and more conservative traders may want to exit now to avoid further losses. We are raising our stop loss to $53.99.
Picked on December 03 at $ 55.85
MEMC Electronic - WFR - close: 42.50 change: +0.39 stop: 39.49
Semiconductor stocks suffered today after some analyst downgrades in the industry. WFR was not downgraded and managed to avoid the sector's bearish influence today. Traders appear to be buying the dip near WFR's rising 10-dma. However, be aware that WFR's technical indicators are beginning to struggle since the stock has been trading sideways for a week now. We would watch for a bounce from its rising 10-dma or even the $40 level as a new entry point. 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: 42.50 change: -0.01 stop: 46.05
The transportation sector traded lower today as investors reacted to rising oil prices and some downgrades in the sector. Unfortunately, after six down days in a row, shares of EXPD failed to see any further declines. Shares look poised for an oversold bounce. Look for resistance near its 10-dma and 100-dma around $44.15. 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: 60.19 change: -0.82 stop: 64.55
The BTK biotech index displayed some additional weakness on Wednesday and dipped toward its 50-dma. The BTK index appears to have produced a bearish head-and-shoulders pattern with today's decline a breakdown under its neckline. This sector weakness only fuels the bearish trend in GENZ and the stock lost 1.3% to close at a new four-month low. The Point & Figure chart looks pretty bearish with a quadruple-bottom breakdown sell signal with a $49 target. Our target is the $58.00-56.00 range.
Picked on December 03 at $ 62.77
NewMarket - NEU - close: 59.62 change: -0.06 stop: 62.25
NEU is still inching lower but is struggling to let go of support near $60 and its rising 100-dma. Aggressive traders might want to consider new plays right here. We are suggesting a trigger to open plays 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: 26.60 chg: -0.15 stop: 27.05
The bulls are still trying to wrest control of YHOO from the bears. The stock gapped open higher and spiked to $27.23 before sinking again. We suspect that YHOO will eventually breakdown under support at $26.00 and its 50-dma. 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: 58.60 change: +0.62 stop: 60.51
YUM managed a 1% bounce on Wednesday. This looks like a simple oversold bounce and we would watch for a failed rally under $59.00 or $60.00 as a new bearish entry point to buy puts. Meanwhile in the news Taco Bell now believes that it was the lettuce that was tainted with E.coli and not green onions. The company tried to assure the public that its food is now safe. The company can't say at this time how much impact the outbreak has had on sales. Our target is the $55.75-55.00 range.
Picked on December 12 at $ 58.49
(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: -0.79 stop: n/a
There is no change from our previous updates on CAT. At this point the strangle play is pretty much buried and we're just shoveling dirt on its grave until Friday. CAT has two days to stage a revival or a significantly steeper sell-off, which we don't see happening at this time. 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: 35.39 chg: +0.86 stop: n/a
NILE continues to recoup its November losses as investors react to news that the stock will be included in the S&P smallcap 600 index. More conservative traders may want to exit now. 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