Allegheny Tech. - ATI - cls: 102.30 chg: -0.74 stop: 97.95
Metal stocks, like most of the market, failed to see any follow through higher this past Friday. The technical picture is currently mixed with both buy signals and sell signals depending on what time period and what indicator you look at. At this time we would expect a dip back toward $100 or the simple 50-dma, near $98.50. A bounce near either level ($100 or $98.50) could be used as a new entry point to buy calls. ATI is facing short-term resistance near $105. Our target is the $109.00-110.00 range. We do not want to hold over the late April earnings report. FYI: The P&F chart points to a $123 target.
on March 14 at $101.50
Cigna - CI - close: 142.33 chg: +1.45 stop: 136.49 *new*
So far so good. Shares of CI continued to rally on Friday with the stock posting another 1% gain. More importantly the rally was fueled by strong volume and shares cleared what looked like potential resistance near $141. We're not suggesting new positions at this time but a dip near $140 could be used as an entry point. More conservative traders who bought the dip near $137.50 might want consider taking some profits now. However, there doesn't appear to be any obstacles between here and the $145 region. Our target is the $145.00-146.00 range. Please note that we're raising the stop loss to $136.49, near technical support at the 50-dma.
Picked on March 13 at $137.49
ConocoPhillips - COP - cls: 65.34 chg: -1.18 stop: 65.74
Blame it on the futures expiration. That's what some market pundits were blaming the late afternoon sell-off in crude oil on Friday. They claim that traders were exciting the current contracts ahead of expiration in preparation to buy the next month's contracts. If this is the case then the weakness in oil stocks may be a temporary buying opportunity. However, we would remain cautious. Aggressive traders might want to consider buying a bounce in COP near what should be support at the $65 level and its 200-dma. We are going to stick to our plan for now. We are suggesting a trigger to buy calls at $69.01 since a move over $69.00 would produce a new triple-top breakout buy signal on the P&F chart. If we are triggered at $69.01 our target is the $74.00-75.00 range. We do not want to hold over the late April earnings report. FYI: Considering the trendline of support that COP has near the $65 level we're going to keep a close eye on it. A strong bounce from $65 on good volume would be tempting just adjust the stop loss to under the trendline and the 200-dma.
Picked on March xx at $ xx.xx <-- see TRIGGER
ESSEX Prop. - ESS - cls: 128.46 chg: -1.38 stop: 125.95
ESS continues to trade sideways between resistance near $130 and support near $125 and its rising 200-dma. Our concern is that ESS as unable to breakout past the $130.00-130.25 zone. That leaves the stock ripe for a pullback toward support near $125. Our stop loss is at $125.95. More aggressive traders may want to widen their stop and put it under $125. We are not suggesting new bullish positions unless ESS can trade over $130.25. Even if ESS breaks out from its current two-week consolidation pattern the stock will encounter potential technical resistance at its 100-dma and 50-dma between $130 and $140. We reiterate our caution about starting new bullish plays. Our target is the $137.00-140.00 zone.
Picked on March 12 at $130.26
Holly Corp. - HOC - cls: 56.98 chg: +0.03 stop: 54.95
Oil stocks struggled on Friday as crude oil futures plunged in late afternoon trading, presumably on traders exiting the current futures contract before expiration. Shares of HOC held up relatively well and still managed to close in the green. We are suggesting new bullish positions in the $56-58 range. Readers can choose to buy a dip near $56 or a breakout over $58. Considering the current market environment we'd probably wait for a bounce or some show of strength before opening positions. Our target is the $62.00-62.50 range. The P&F chart is bullish with a $74.00 target.
BUY CALL APR 55.00 HOC-DK open interest=1843 current ask $3.40
Picked on March 14 at $ 57.87
Accredited Home Lenders - LEND - cls: 10.90 chg: +1.47 stop: n/a
Shares of LEND gapped open higher again and hit an intraday high of $13.75 before sliding back to close with a 15.5% gain. Driving the rally on Friday was more short covering and news that LEND would sell about $2.7 billion in loans at a discount so it could meet its margin calls. Our initial plan was to hold any call options until after the company announced any takeover news. We're only speculating that someone will make a bid for LEND but it's a big topic on Wall Street these days and the company did announce that they were "exploring" strategic options. The stock has risen substantially over the past couple of sessions and some traders may want to go ahead and take some profit off the table. We hesitate to open new plays here even though the strategy remains the same. Remember, this is a high-risk lottery play, but we might just exit early if LEND can rebound toward $14.50-15.00.
Picked on March 14 at $ 6.04
New Century - NEWC - close: 2.34 chg: +0.99 stop: n/a
The short-covering and oversold bounce in the sub-prime lenders continued into Friday. Shares of NEWC rose more than 73% and on huge volume. There could still be a good chance that someone will announce a buyout of NEWC but we hesitate to suggest new positions. This remains a very high-risk, speculative play. Given the big bounce we're not going to drop the stock from the newsletter yet.
Picked on March 11 at $ 3.21
Sunoco - SUN - close: 65.90 chg: -0.67 stop: 63.95
Oil stocks were a pocket of weakness on Friday but we're not willing to count them out of the rally yet. Shares of SUN pull back toward what should be technical support near its simple 200-dma. Aggressive traders may want to buy a bounce from here. We're going to stick to our plan, which suggests using a trigger to buy calls at $68.15. If triggered our target is the $74.00-75.00 range. We do expect some resistance near $70.00. The P&F chart is very bullish with an $82 target. As a refiner, SUN, should do very well over the summer driving season and investors should eventually begin buying ahead of the summer quarter.
Picked on March xx at $ xx.xx <-- see TRIGGER
Molson Coors - TAP - cls: 88.83 chg: +0.98 stop: 84.49 *new*
An analyst upgrade on Friday morning helped send TAP to a new all-time high. Shares gapped open at $89.00 and traded to $89.67 before settling at a 1.1% gain. We remain bullish on the stock but would not suggesting new positions right here with shares under potential resistance at $90.00. If you're looking for an entry point consider buying a dip near $88.00 or $87.50. We are adjusting our stop loss to $84.49. Our target is the $92.50-95.00 range. The P&F chart is very bullish with a bullish triangle breakout buy signal that forecasts a $134 price target.
Picked on March 14 at $ 87.15
Ashland Inc. - ASH - cls: 63.00 chg: -1.03 stop: 66.05 *new*
The oversold bounce in ASH stumbled on Friday. Shares reversed course and closed down 1.6%. Volume wasn't very high so it's tough to put a lot of emphasis behind today's move but the lack of follow through higher is still bearish. If you want to open new positions here we would use a much tighter stop loss. Speaking of stop losses we're going to adjust ours to $66.05. Our target is the $60.50-60.00 range.
Picked on March 04 at $ 65.82
Bausch Lomb - BOL - cls: 49.51 change: -1.04 stop: 52.51
That's close enough! We're suggesting new put positions right here. We've been watching BOL for the last couple of weeks and waiting for a breakdown under support at the $50.00 mark. Our suggested trigger to buy puts was at $49.49. Friday's technical breakdown didn't hit our trigger because the intraday low was $49.51. However, that's close enough for us and we're suggesting new plays now. Our target is the $44.00-42.50 range but we want to warn readers that BOL may find some support near $47.50 and its December 2006 low.
BUY PUT APR 50.00 BOL-PJ open interest=5788 current ask $1.75
Picked on March 18 at $ 49.51
Beazer Homes - BZH - close: 32.37 chg: -0.42 stop: 36.25*new*
There has been no reprieve for the homebuilders. The group continued to sink on Friday as investors fear that a liquidity crunch and tightening loan standards will impact new home sales. Shares of BZH produced a minor failed rally and closed down 1.2%. Probably the most important statistic for BZH on Friday was the big volume behind the decline. We remain bearish but hesitate to suggest new positions right here. Please note our new stop loss at $36.25. Our target is the $30.50-30.00 range. FYI: Traders should note that BZH does have a relatively high amount of short interest (17% of the float) and that does raise the risk of a short squeeze.
Picked on March 12 at $ 34.20
Harman Intl - HAR - close: 97.31 change: -1.32 stop: 102.01
HAR failed to see any follow through on last Wednesday's bounce. That's good news for the bears and Friday's decline (reversal) looks like a new entry point to buy puts. If you don't feel like buying puts here then consider waiting for a breakdown under technical support at its exponential 200-dma near $96.40. More conservative traders may want to use tighter stops. Our target is the $92.50-90.00 range near its simple 200-dma. FYI: The P&F chart points to a very bearish $80 target.
BUY PUT APR 100.00 HAR-PY open interest=2295 current ask $4.30
Picked on March 04 at $ 97.49
MarineMax - HZO - close: 20.61 change: -0.43 stop: 22.59
The sell-off in HZO is starting to pick up speed. The stock closed down over 2% on Friday and hit an intraday low of $20.48. Shares of HZO are quickly approaching our target in the $20.25-20.00 range. More conservative traders may want to exit early right now. FYI: It may be worth noting that HZO has a high amount of short interest. The latest data (February) puts short interest at almost 24% of the stock's 16.8 million-share float. That definitely increases the risk of a short squeeze should the stock unexpectedly rally and breakout higher.
Picked on February 11 at $ 22.59
Ryland Group - RYL - close: 44.76 chg: -0.49 stop: 48.27
RYL is another homebuilder that has seen its oversold bounce run out of gas. Investors are still concerned about how the crash in the sub-prime lenders will impact home sales. Thursday and Friday's failed rally near its descending 10-dma and Friday's close back under the $45.00 level looks like a new entry point for puts. If you prefer you may want to wait for a new decline under $44.60 or $44.50 before initiating positions. More conservative traders may want to use a tighter stop loss. Our target is the $40.50-40.00 range. FYI: The P&F chart for RYL points to a $29 target. The stock does have a high amount of short interest at 24% of the float and that raises the risk of a short squeeze.
BUY PUT APR 50.00 RYL-PJ open interest= 9300 current
Picked on March 13 at $ 44.75
Carbo Ceramics - CRR - cls: 43.83 chg: -0.62 stop: 42.45
We are calling it quits on CRR. The stock has continued to slide and shares broke down under what should have been short-term support near $44.00 on Friday. We're suggesting an early exit now to cut our losses. We would keep an eye on CRR for a break out above $46 down the road.
Picked on March 11 at $ 45.55
Noble Energy - NBL - close: 56.64 chg: -1.03 stop: 55.75
We remain relatively bullish on oil and oil stocks but NBL is showing a lot of relative weakness. The stock is breaking down from its two-month channel and many of the technical indicators are turning bearish. We'd rather exit early now and cut our losses. We will keep an eye on the stock for a bullish reversal down the road.
Picked on March 06 at $ 58.02