Penn National Gaming - PENN - cls: 56.75 chg: -1.16 stop: n/a
Shares of PENN lost 2% as the market plunged to one of its worst days of the year. Volume was almost three times the daily average. We're not suggesting new positions. The stock has been displaying way too much weakness given its pending merger and shares will be subject to any sort of headline news regarding the merger's progress. The stock should be trading near its buyout price around $67. The fact that it's not would suggest that the market doesn't believe this deal will get done - at least not in its current form or price. PENN's 45-day window to solicit a higher bid has expired. FYI: We'll be dropping this stock at August option expiration.
Picked on June 17 at $ 62.12
Sears Holding - SHLD - cls: 129.90 chg: -4.27 stop: 127.49
Retailers were some of the market's worst performers today. Several high-profile retailers reported their monthly same-store sales figures, which missed estimates. The RLX retail index fell 3.79%. Shares of SHLD followed with a 3.1% decline straight toward support near $130. This doesn't look good for the bulls. The RLX closed on its lows for the day and has farther to fall before finding any support. SHLD, while at support, has been showing relative weakness for weeks. Odds are VERY good that SHLD will hit our stop loss tomorrow if there is any sort of follow through to the downside in the major indices. More conservative traders may want to tighten their stops or try and exit early tomorrow. Considering the fact that SHLD essentially held the $130 level, we're going to stay with it and see if shares can bounce.
Picked on August 3 at $133.00
ITT Educ. - ESI - cls: 98.64 change: -2.31 stop: 105.05*new*
It was a very volatile day for ESI. The stock gapped open lower at $99.28 and dropped to an intraday low of $93.32 before bouncing back. The afternoon rally hit $101.90 before rolling over again. Coincidentally the intraday low looks like a test of the exponential 200-dma. Our target is the $92.00-90.00 range. We're adjusting our stop loss to $105.05. The afternoon failed rally looks like a new bearish entry point but at the same time the big intraday rebound could inspire the bulls. Enter new positions carefully. The market has been extremely volatile this week. The P&F chart has seen its target fall from $86 to $66.
Picked on August 05 at $102.22
(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.)
Daimler-Benz AG - DAI - cls: 84.35 chg: -4.21 stop: n/a
Now that Daimler has divested its stake in Chrysler the stock is trading under a new ticker symbol "DAI". The new name and symbol did not spare it from the market-wide sell-off. Shares lost 4.7% and broke down from its recent trading range. We are not suggesting new strangles on DCX at this time. The options in our suggested strangle were the August $95 calls (DCX-HS) and the August $85 puts (DCX-TQ). Our estimated cost was $3.70. We want to sell if either option rises to $6.45. FYI: The new symbol on the August $85 puts should be DAI-TQ.
Picked on July 22 at $ 89.75