Ashland - ASH - cls: 62.27 change: -0.50 stop: 59.95
Shares of ASH weathered the market sell-off on Friday relatively well. The stock pulled back 0.79% but maintained short-term support near $62.00. Odds are good that we'll see a bit more weakness on Monday morning. If that's the case we'd watch for ASH to dip near $61.50 or maybe $61.00. A bounce above the $61.00 level can be used as a new bullish entry point. Our target is the 200-dma (currently at $64.48). More aggressive traders may want to aim higher but we would not hold over the late July earnings report.
Picked on June 10 at $ 61.49
Avery Dennison - AVY - cls: 66.42 chg: -0.28 stop: 64.90*new*
AVY also held up pretty well during Friday's market-wide weakness. The stock held above short-term support near $66.00 as it continues to consolidate sideways in the $66-67 range. The lack of upward movement over the last week is weighing on the short-term technical indicators but the two-month trend is still higher. We would use another dip in the $66.00-66.25 zone as a new entry point to buy calls. The 200-dma has risen above what should be round-number support at $65.00 so we are adjusting our stop loss to $64.90. Our target is the $69.75-70.00 range. We do not want to hold over the late July earnings report.
Picked on June 11 at $ 66.05
BP Plc. - BP - close: 69.76 change: +0.53 stop: 67.85
Shares of BP managed to buck the market trend on Friday. The stock gapped open higher at $70.17 and rose to $70.52 before paring its gains. Fueling the move was news about BP's stake in Russia. The Russian government negotiated a deal with BP to buy BP's 62% stake in some substantial Russian natural gas fields. It looks like investors were happy to hear the news that BP will be paid $900 million for its share and will be given a chance to become a minority stakeholder. The deal could have turned out a lot worse with the Russian government just confiscating all of BP's assets with zero compensation. This is just one more play by the Kremlin to seize control of all of its energy assets as we near peak oil and gas for the planet. Shares of BP dipped low enough on Friday to fill the morning gap and then bounce again. Normally, given the breakout over resistance at $70.00 and the pull back under it again we would issue a warning but this time it looks like another entry point. Our suggested trigger to buy calls was at $70.25 so the play is open. We are suggesting new positions now although more conservative traders may want to wait for a new relative high over $70.50 before opening positions. The P&F chart points to a $90 target. Our target is the $74.85-75.00 range. More aggressive traders may want to aim higher. FYI: We do see some resistance near $73.50.
BUY CALL AUG 65.00 BP-HM open interest= 65 current ask $5.70
Picked on June 22 at $ 70.25
Central Euro. Media - CETV - cls: 96.20 chg: +1.52 stop: 89.75
CETV displayed relative strength on Friday with a new all-time high at $97.83.
Furthermore the stock posted a 1.6% gain while volume soared to almost 20 times
the daily average. Unfortunately, we cannot find any news that might explain the
spike higher at the open or the huge surge in volume near the closing bell.
Sometimes big volume at a new high can mean distribution and a potential top but
that doesn't look like the case here with CETV rebounding sharply higher into
bell. Given the sharp rise in volume, and knowing that the Russell
rebalancing was this weekend, we decided to check the Russell.com website and
sure enough CETV was one of the new companies being added to the indices, which
explains the big volume. Why there was no press release from CETV about this
event we can't say. We are not suggesting new positions at this time. Our target
is the $99.00-100.00 range. It's worth noting that the price target on the Point
& Figure chart has
grown from $103 to $118 in the last couple of weeks. If you
look at the bullish channel on the weekly chart it is tempting to want to aim
higher. If you want to see the Russell additions click here:
Picked on June 17 at $ 92.75
Chevron Corp. - CVX - close: 81.55 chg: -1.30 stop: 79.90
Oil stocks could not evade the market sell-off even though crude oil futures rebounded on Friday. Shares of CVX lost 1.5% although it wasn't a true break from Thursday's "inside day". We are somewhat cautious here and would suggest waiting for a new rise past $83.00 before considering new positions. More conservative traders can wait for a new relative high over $84.00 before considering new positions. Our target is the $89.00-90.00 range.
Picked on June 18 at $ 83.75
Deere Co - DE - close: 123.35 change: -0.95 stop: 117.45
We think DE also held up very well during the market mayhem on Friday. Shares tagged a new all-time high at $125.64 before sliding into the red. Overall we remain bullish on the stock. Readers can choose to buy calls here or look for a dip near its rising 10-dma around $120.85. Conservative traders might want to consider a tighter stop loss closer to $120. We have two targets. Our first target is the $129.50-130.00 range. Our second, more aggressive target is the $134.00-135.00 range. The P&F chart is bullish with a $152 target.
BUY CALL AUG 120 DE-HD open interest=100 current ask $8.30
BUY CALL SEP 120 DE-ID open interest=1387 current ask $10.00
Picked on June 20 at $123.55
Global SantaFe - GSF - cls: 73.70 chg: +0.77 stop: 66.65
GSF also turned in a strong session with a 1% gain and a new closing high. The
stock saw record volume on Friday, which was due to GSF being added to the
Russell indices. You can see it on the additions lists here: http://tinyurl.com/39o3x3
Picked on June 03 at $ 68.86
Manpower - MAN - cls: 93.20 change: -0.90 stop: 89.90
The market weakness on Friday took the wind out of MAN's sails but we suspect it's a short-term issue. Traders bought the dip near $92.00 midday and MAN pared its losses by the close. We see the intraday rebound as a new entry point to buy calls. Conservative traders could try and reduce their risk by raising their stop loss toward $91 or toward $92.00. Just be aware that the market in general (and thus MAN) could see some weakness on Monday as stocks flush out any left over selling from Friday. Our target is the $99.50-100.00 range. The P&F chart has a triple-top breakout buy signal with a $110 target.
BUY CALL JUL 90.00 MAN-GR open interest=237 current ask $5.40
BUY CALL AUG 90.00 MAN-HR open interest= 0 current ask $6.60
Picked on June 20 at $ 94.15
Penn National Gaming - PENN - cls: 61.60 chg: -0.58 stop: n/a
Our high risk play on PENN is taking a turn for the worse. The stock is trading down towards its post-gap low. Shares gapped higher on June 15th after announcing it would be bought for $6.1 billion by two investment companies. There has been a lot of speculation that more suitors will show up and push the price higher. That's why we're suggesting calls, since one analyst believes the final buyout price could be closer to $80.00. However, this is a very speculative and high-risk play. If a suitor fails to show up then any out of the money calls will quickly disintegrate. Currently the final buyout price is $67 a share. After the deal was announced Jim, our weekend market commentator, disclosed that he bought a few calls expecting more suitors to make a bid for PENN.
BUY CALL AUG 65.00 UQN-HM open interest=1916 current ask $0.80
BUY CALL OCT 65.00 UQN-JM open interest=1512 current ask $1.35
Picked on June 17 at $ 62.12
SanDisk - SNDK - cls: 47.90 change: -0.12 stop: 43.45
SNDK turned in a strong week following its recent breakout over resistance near $46 and its 200-dma. We remain bullish on the stock but would only consider new positions if we saw a dip (or better yet a bounce) near the rising 10-dma around $46.25. More conservative traders may want to raise their stops. We have two targets. Our conservative target is the $49.50-50.00 range. Our aggressive target is the $52.50-55.00 range, which might be too optimistic given our time frame. We don't want to hold over the mid July earnings report.
Picked on June 17 at $ 46.40
Valero Energy - VLO - cls: 76.45 chg: -0.12 stop: 72.45
VLO did not produce any definitive moves following Thursday's "inside day" but we remain bullish on the stock and the sector. We are suggesting new positions here but it would be perfectly fine to wait for a new relative high over $78.00 before initiating positions. More conservative traders might want to think about raising their stop loss toward last week's low. We're going to keep our stop under $72.50 and its 50-dma for now. Our target is the $84.50-85.00 range.
BUY CALL AUG 75.00 ZPY-HO open interest=1106 current ask $4.60
Picked on June 18 at $ 77.55
XTO Energy - XTO - cls: 61.45 chg: -0.89 stop: 58.95
Last week was rough on XTO. The stock pulled back about 3% and Friday's session produced a bearish breakdown under short-term support at the 10-dma. We are not suggesting new positions at this time although we will be watching for a bounce near $60.00, which should be round-number support. We are repeating our suggestion that readers consider taking some money off the table and lock in a potential profit. Our target is the $64.75-67.50 range.
Picked on May 27 at $ 57.63
Allegheny Tech - ATI - cls: 106.77 chg: -2.48 stop: 112.15
The overall pattern continues to look bearish for ATI. There appears to be a clear top in place and both weekly and daily technical indicators are bearish. The stock produced multiple failed rallies under $112 and Friday saw another failed rally under $110. The recent weakness looks like a new entry point to buy puts. However, ATI has bounced twice in the $105.50-105.60 range. More conservative traders may want to wait for a new relative low under $105.50 before initiating positions. Currently we have two targets. The first target is the $100.50-100.00 range since the $100 level would normally be round-number support. Our second, more aggressive target is the $95.50-95.00 range although we may need to adjust this to the 200-dma, which is rising and currently near $94.00. The P&F chart currently points to a $94 target.
BUY PUT AUG 110 ATI-TX open interest=147 current ask $7.90
Picked on June 12 at $106.70
Gilead Sciences - GILD - cls: 78.48 chg: -0.87 stop: 82.55
The BTK biotech index lost 1.8% and plunged through support near the 780 level. Friday marked the close to a painful week for the sector and as a group they look a little short-term oversold and due for a bounce. Speaking of bounces GILD dipped to $77.46 near its rising 100-dma and then rebounded more than a $1.00. While the overall trend in GILD looks bearish we're not suggesting new positions. The stock looks poised to bounce back toward the $80 region. More conservative traders may want to tighten their stops. Our target is the $75.25-72.50 range but traders should be aware that the simple 100-dma nearing $77.50 might be technical support. FYI: The stock is set to split 2-for-1 on June 25th. Our post-split target is $37.62-36.25. Our post-split stop loss is $41.27. If you are currently holding options on GILD you will see the strike price and symbol change, the value will probably halve while the number of contracts you own should double due to the 2:1 split.
Picked on June 07 at $ 79.90
Las Vegas Sands - LVS - cls: 74.85 chg: -0.50 stop: 80.26
LVS has been flirting with a breakdown under round-number support at $75.00 for days. Shares finally did it on Friday and it closed under $75 on above average volume, which is bearish. However, before you jump in with new bearish positions it's worth noting that shares were trading up around $75.50 in after hours on Friday. We remain bearish on the stock but we're cautious since we can't see any news or event that would fuel an after hours rebound on Friday. Look for a failed rally under the 10-dma (near 76.85) or a new relative low (under 74.63) as potential entry points to buy puts. Stay on your toes. This has been a tough market for bearish strategies for the last few months. Our target is the $70.50-70.00 range. More aggressive traders may want to aim lower.
Picked on June 17 at $ 76.78
Mettler Toledo - MTD - cls: 94.33 chg: -0.50 stop: 99.11
On Thursday MTD bounced from technical support at its rising 100-dma. Yet the bounce did not get very far as shares slipped 0.5% on Friday. There is still support at the 100-dma so we're not suggesting new positions at this time. Wait and watch for a failed rally under the 10-dma near $97.00 (or under $96.00) before considering new put positions. Our target is the $90.50-90.00 range. FYI: The P&F chart has reversed into a new triple-bottom breakdown sell signal with an $87 target (was $91).
Picked on June 19 at $ 96.75
QUALCOMM - QCOM - cls: 42.99 change: -0.57 stop: 44.05
On Friday it was announced that the U.S. International Trade Commission (ITC) had denied QCOM's request to delay the ITC's previous order banning importation of mobile phones with QCOM's latest chips (source: Reuters). We are surprised that shares of QCOM did not trade lower than its 1.3% decline on Friday given this news. There is the off chance that President Bush will make an exception and step in to influence the ITC's decision but the White House has already said that is unlikely to occur. There is also a chance that QCOM will give in and work out some sort of settlement with BRCM, who won the patent infringement case that started this conflict. However, QCOM has not hinted it's willing to do any talking with BRCM thus far. Given this story we remain bearish on the stock. More aggressive traders may want to buy puts here. We would wait for a new decline under $42.00 or $41.00 to confirm the bearish trend. Our target is the $37.00-36.00 range. We do not want to hold over the mid July earnings report.
BUY PUT JUL 45.00 AAO-SI open interest=39348 current ask $2.45
BUY PUT AUG 45.00 AAO-TI open interest= 2181 current ask $2.95
Picked on June 10 at $ 41.87
Weyerhauser - WY - cls: 80.57 chg: -1.03 stop: 82.05
Shares of WY continue to flirt with a breakdown under $80.00 and technical support at its 50 and 100-dma. We are sticking to our plan and waiting for WY to hit our trigger at $79.49. If triggered our target is the $75.00-74.00 range. The P&F chart is very bearish with a $61 target.
BUY PUT JUL 80.00 WY-SP open interest=4980 current ask $1.50
BUY PUT AUG 80.00 WY-TP open interest= 750 current ask $2.85
Picked on June xx at $ xx.xx <-- see TRIGGER
PACCAR - PCAR - cls: 87.42 change: -2.01 stop: 85.95
We are giving up on PCAR. The stock lost 2.2% and did so on big volume this Friday. The breakdown under $88.00 suggests that PCAR has farther to consolidate and shares may dip toward the 50-dma or the $84 level before bouncing again. We are dropping it here but will keep an eye on it for a breakout (either direction) from its previous trading range.
Picked on June 17 at $ 90.66
SunPower - SPWR - cls: 64.18 change: +3.41 stop: 52.49
Target achieved. SPWR broke out to new all-time highs and past resistance near $62.50 on huge volume. SPWR hit an intraday high of $64.88. Our target was the $64.00-65.00 range. The play is closed but we'll be keeping an eye on the stock for another entry point down the road.
Picked on June 17 at $ 57.94