Ctrip.com - CTRP - cls: 71.78 chg: +1.55 stop: 67.45
Shares of CTRP woke up from their three-day nap on Friday. Shares rose 2.2% and short-term indicators are now improving. We suspect that some of CTRP's strength may be reflecting the big bullish breakout in Priceline.com (PCLN) today. The trend in CTRP still looks bullish but more conservative traders may want to tighten their stops toward $69.50. Our short-term target is the stock's highs in the $74.50-75.00 range. The Point & Figure chart forecasts a $93 target. We do not want to hold over the May 16th earnings report. FYI: Readers should also note that EXPE is due to report earnings on May 8th and that news could impact shares of CTRP.
BUY CALL JUN 70.00 QCT-FN open interest=522 current ask $5.20
Picked on April 29 at $ 70.63
General Dynamics - GD - cls: 79.69 chg: -0.78 stop: 77.75
The DFI defense index posted another new all-time high on Friday. Unfortunately, GD failed to participate and produced a failed rally under the $81.00 level. At this point we would either wait for another bounce (dip) near $78.00 or wait for a breakout over $81.00 before initiating new positions. Our target is the 84.75-85.00 range. More aggressive traders may want to aim higher. The P&F chart has produced a triple-top breakout buy signal with a $96 target.
BUY CALL JUN 75.00 GD-FO open interest= 94 current ask $5.70
Picked on April 29 at $ 80.27
Holly Corp. - HOC - cls: 63.12 chg: -0.40 stop: 61.95 *new*
Crude oil futures suffered a substantial decline this past week yet the oil and energy stocks actually held up relatively well. The trend in HOC is still bullish. However, we are concerned because the sell-off in crude futures has broken technical support. A bounce in HOC near $62.00 could be used as a new entry point but we just don't have the time left. We plan to exit on Monday afternoon at the closing bell to avoid holding over the Tuesday morning earnings report for HOC. Please note that we're adjusting the stop loss to $61.95.
Picked on April 22 at $ 62.30
Wynn Resorts - WYNN - cls: 102.52 chg: -1.11 stop: 100.89*new*
Casino stocks are still struggling with lackluster earnings reports from LVS and MGM this past week. This turns into profit taking for WYNN and WYNN's upward momentum is now in jeopardy. It is our plan to exit on Monday at the closing bell to avoid holding over WYNN's earnings report on Monday after the close. Due to our limited time left we're going to adjust our stop loss to a very unconventional spot in an effort to reduce our risk. Our new stop is at $100.89.
Picked on April 15 at $102.44
AvalonBay - AVB - cls: 119.03 chg: -2.22 stop: 125.26 *new*
REITs suffered some profit taking on Friday and AVB saw its oversold bounce quickly reverse course. Shares of AVB lost another 1.8% and close at a new relative low. Today's move could be used as a new entry point but if you're opening new positions now we suggest a much tighter stop loss. Speaking of stops we're going to tighten ours to $125.26. Our target is the $112.50-110.00 range. The P&F chart points to a $110 target. More conservative traders might want to think about taking some money off the table here.
Picked on April 30 at $124.45
Lockheed Martin - LMT - cls: 96.64 chg: +0.24 stop: 97.51
We remain encouraged by the relative under performance in LMT. The stock has ignored the new highs in the defense sector. LMT has been stuck under resistance near $97 and its 50-dma. It's worth noting that volume is drying up and it looks like LMT could be coiling for a breakout move. The question is which way will it break? Given the trend of lower highs we suspect LMT will breakdown but the sector strength and market strength could eventually pull LMT higher. We would wait for a breakdown under $95.00 before considering new put positions. More aggressive traders might want to consider an earlier entry on a breakdown under $96 or $95.75. Our target is the $90.50-90.00 range but we might need to adjust our target to account for the rising 200-dma, which will probably be technical support. FYI: LMT announced that it will be presenting at an investor conference on Tuesday, May 8th.
Picked on April 24 at $ 94.82
(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.)
Lockheed Martin - LMT - cls: 96.64 change: +0.24 stop: n/a
We only have two weeks left for our May options in this strangle play. LMT needs to move pretty soon. Shares have been consolidating sideways this past week so we're expecting a breakout sooner rather than later. We're not suggesting new strangle plays at this time. The suggested options we had listed were the May $100 calls (LMT-ET) and the May $90 puts (LMT-QR). Our estimated cost was $1.50. We want to sell if either option rises to $2.25 or more.
Picked on April 22 at $ 95.40
Advance Auto Parts - AAP - cls: 40.35 chg: -0.38 stop: 39.90
We are giving up on AAP as a bullish candidate. There is still a chance that shares will bounce from the $40.00 level but the stock has been showing way too much relative weakness lately. We're suggesting an early exit immediately.
Picked on April 11 at $ 40.05