Amazon.com - AMZN - close: 84.52 change: -1.69 stop: 78.95
AMZN had been out performing the markets all week long. However, it could not evade the market-wide sell-off on Friday. Shares gapped lower and dipped to $83.21 before bouncing. AMZN spent most of the day consolidating sideways and the end of day rally was encouraging. If the market bounces on Monday we expect AMZN to help lead the way higher. Our target is the $88.00-89.00 range. The P&F chart is very bullish with a $99 target.
Picked on September 04 at $ 80.85
Eaton Corp. - ETN - cls: 91.38 change: -3.24 stop: 91.99
Fortunately, we're still sitting on the sidelines with ETN. The stock gapped open lower and after the initial decline slowly continued to sink. Shares look headed toward what should be short-term support near $90.00. Nimble traders could try and buy calls on a bounce near $90 or buy puts on a breakdown under $90. If you look at the technical indicators for the weekly chart and the daily chart it does look like the bears are retaking control. Readers may want to keep that put strategy in mind. Currently, we are still waiting for a breakout over resistance near $95 and its 50-dma. We are suggesting a trigger to buy calls at $95.25. If triggered we will have two targets. Our first target is the $99.75-100.00 range. Our second target is the $103.50-104.00 zone. Aggressive traders may want to put their stop loss under support near $90.00. More conservative traders could put their stop closer toward what should be technical support at the 10-dma around $92.50. FYI: In the news on Friday ETN announced it was realigning its business structure from four to six divisions.
Picked on September xx at $ xx.xx <-- see TRIGGER
Intl. Bus. Mach.- IBM - cls: 115.55 chg: -2.07 stop: 111.59
We have been cautioning readers to look for a dip in IBM. The market's reaction to the jobs number pulled IBM toward short-term support around $115 and its 10-dma. We are not suggesting new positions but a bounce from here could be used as a new bullish entry point but if you do buy the bounce we would suggest a much tighter stop loss. Speaking of stop losses more conservative traders may want to tighten their stops toward our entry around $113. Technical indicators are turning bearish. Truly conservative traders may want to abandon the play now. The stock has already hit our $118-120 target range. Our second, more-aggressive target is the $124.00-125.00 zone. FYI: The Point & Figure is very bullish with a $177 target.
Picked on August 26 at $113.24
Manitowoc - MTW - cls: 79.39 change: -1.67 stop: 74.95
MTW suffered some sharp profit taking early on Friday but traders bought the dip at $77.25. The big intraday rebound actually looks like a new bullish entry point but readers may want to wait for a new rise over $80 again before considering new positions. Readers may also want to consider a tighter stop near $76 or $77. Our target is the $88.00-90.00 range. The Point & Figure chart is very bullish with a triple-top breakout buy signal and a $103 target. FYI: MTW is due to split 2-for-1 and will begin trading at its new price on September 11th. Don't forget that for current positions your option symbols and strikes will change due to the stock split. Plus you'll have twice as many contracts at a reduced value.
Picked on September 05 at $ 80.25
Transocean - RIG - cls: 108.52 change: +1.13 stop: 104.85*new*
RIG bounced right on cue for us. Traders bought the dip near short-term support around $105 and its 50-dma. The move on Friday almost looks like a bullish engulfing candlestick pattern. We alerted readers to look for a new entry point near $105. The $110 region could be short-term resistance but our target is the $114.00-115.00 range. Please note that we're raising the stop loss to $104.85, which is under the rising 10-dma.
Picked on August 31 at $105.75
Acuity Brands - AYI - cls: 50.19 change: -1.84 stop: 55.01*new*
Friday's market weakness really weighed on shares of AYI. The stock gapped open lower at $51.30 and sank toward the $50.00 level for a 3.5% decline. The $50 mark is naturally round-number support so don't be surprised if AYI produces an oversold bounce from here. However, the stock should run into resistance in the $52.00-52.50 zone. We are adjusting our stop loss to $55.01. More conservative traders may want to use a tighter stop loss. We're not suggesting new positions at this time. We have two targets. Our first target is the $47.75-47.50 range. Our second target is the $45.25-45.00 zone.
Picked on August 26 at $ 52.80
(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.)
Diamonds - DIA - cls: 131.52 chg: -2.01 stop: n/a
The job report number sent the market and the DJIA sharply lower on Friday. The DIA naturally followed lower and closed with a 1.5% decline. We are not suggesting new positions at this time. Our strangle play suggested using the September $137 call (DAZ-IG) and the September $127 put (DAW-UW) with an estimated cost of $2.05. We want to sell if either option rises to $3.10 or more. We only have two weeks left before September options expire.
Picked on August 30 at $132.57
S&P 100 Index - OEX - cls: 677.74 chg: -11.17 stop: n/a
The S&P 100 index has produced a pretty sharp bearish reversal this past week. Last Monday and Tuesday it was soaring higher but by Friday it was negative for the week. The index might have some support in the 665 region. We're not suggesting new positions at this time. Our strangle suggested using the September 700 call (OEZ-IT) and the September 660 put (OEY-UL) with an estimated cost of $14.30. We want to sell if either option rises to $21.45 or more. Considering these prices we probably need to see a move into the $705-710 range or the $655-650 zone to be profitable.
Picked on August 30 at $680.46
Ceradyne - CRDN - cls: 69.20 change: -1.42 stop: 68.49
The action in CRDN last Friday is very bearish. The stock broke down under what should have been support at $70.00 and its 100-dma. The midday rebound attempted failed near $70, which is another bearish sign. The stock did find support near $68.75, which was the previous week's low. This does provide some hope that if the markets bounce on Monday that CRDN will bounce with them. However, we are going to suggest an early exit now. More aggressive traders may want to stick it out and see if CRDN can rebound.
Picked on September 02 at $ 72.27
Millicom - MICC - cls: 79.76 change: -0.96 stop: 79.90
The bullish breakout on August 31st proved to be a trap. The stock reversed course under technical resistance at the 50 and 100-dma. This past Friday the stock broke down under the $80.00 mark and hit our stop loss at $79.90. We did warn readers more than once that conservative traders would want to wait for MICC to clear that resistance at the moving averages. We'd keep an eye on MICC. A drop under $77.50 could be a bearish entry point forecasting a fall toward $70 or worse.
Picked on September 04 at $ 85.25