Amazon.com - AMZN - close: 83.34 change: -1.18 stop: 78.95
AMZN suffered another round of profit taking on Monday. If the major averages continue to slip lower we would expect AMZN to test the 10-dma around $81.30 and potentially the $80.00 region. Wait for a bounce from either before considering new bullish positions. 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
Intl. Bus. Mach.- IBM - cls: 115.80 chg: +0.25 stop: 111.59
IBM is still holding up relatively well. The early morning rally attempt failed at $117.50 but bulls are defending the stock near $115. 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 since this is starting to look like a bearish double-top pattern. 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 experienced a relatively volatile day. The early morning spike higher reversed into a big drop to $76.00. There were a couple more rally attempts and shares were bouncing higher into the close but MTW ended the session down 2.3%. A bounce from here could be used as a new entry point but readers will want to strongly consider a tighter stop near $76 (or $38 post-split). 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: 108.31 change: -0.21 stop: 104.85
An analyst downgrade in the oil services sector took the whole group lower even though RIG received some positive comments in the analyst' opinion. Traders bought the dip again this morning and this looks like a potential entry point but RIG is facing short-term resistance in the $109-110 range. Readers looking for a new entry may want to wait for a breakout over $110. Our target is the $114.00-115.00 range.
Picked on August 31 at $105.75
Ashland Inc. - ASH - cls: 57.34 change: -1.50 stop: 61.01
ASH is off to a good start. The stock plunged through the $58.50 level and closed under any short-term support levels. Volume was rising on today's 2.5% decline, which is a bearish sign. The MACD is nearing a new sell signal. We would still consider new put positions here. We have two targets. Our first target is the $55.15-55.00 range. Our second target is the $52.65-52.50 range.
Picked on September 09 at $ 58.84
Acuity Brands - AYI - cls: 48.66 change: -1.53 stop: 54.01 *new*
The sell-off in AYI continues. Shares broke down under what should have been short-term support near $50.00. This is good news for the bears. We're dropping our stop loss to $54.01. 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
FTSE/Xinhau China iShares - FXI - cls: 149.35 chg: +2.57 stop: 151.51
The Chinese market can be very volatile, especially trading an ETF that is prone to gaps up and down every morning as it adjusts to overnight trading in China. The FXI displayed relative strength today with a 1.7% gain. Readers can choose to buy puts on a decline tomorrow or wait for a drop under $145.00 before initiating positions. Our target is the $135.50-135.00. More aggressive traders may want to aim lower. We may start looking for a bullish entry point near $130. Readers should consider this a more aggressive play.
Picked on September 09 at $146.78
L-3 Comm. - LLL - cls: 97.16 change: +0.21 stop: 98.55
LLL found some support at $96.00 this morning and LLL tried to rally but it didn't get very far. We're suggesting a trigger to buy puts at $95.90, which is under short-term support near $96.00. We're going to try and limit our risk with a tight stop at $98.55. More aggressive traders will want to use a wider stop (maybe above $100). If triggered at $95.90 our target is the $90.75-90.00 range but we may need to adjust that as the 200-dma continues to rise.
Picked on September xx at $ xx.xx <-- see TRIGGER
Whirlpool - WHR - cls: 90.46 change; -2.31 stop: 97.01
WHR traded sideways for about 35-40 minutes this morning before the plunge began. Shares fell toward round-number support at $90.00 and closed with a 2.49% drop. The MACD is very close to a new sell signal (on the daily chart). More conservative traders could already be thinking about adjusting their stop loss lower. However, don't be surprised to see WHR bounce from the $90 level. The stock should have some resistance near $95.00. We have two targets. Our first target is the 87.75-87.50 range. Our second target is the $85.00-84.00 range.
Picked on September 09 at $ 92.77
(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.)
Bear Stearns - BSC - cls: 107.50 chg: +2.13 stop: n/a
The gap open this morning was a bit of a surprise but BSC provided a great strangle entry point on the midday dip near $105. Overall we don't see any changes from our weekend comments. BSC reports earnings on Thursday morning. We need to have our positions open by the closing bell on Wednesday. We're going to play the September strikes even though they expire in two weeks. Some readers might want to adjust this strategy and play the October strikes. We're suggesting readers try and open positions in the $106.50-103.50 range. Considering the price of the options and our time frame (two weeks) this should be considered a more aggressive play. One idea to reduce the amount of time premium erosion we will suffer would be to wait until Wednesday to open positions. Our suggested options for BSC were the September $115 call (BVD-IC) and the September $95 put (BVD-US). Our estimated cost was $4.40. We want to sell if either option hits $7.85.
Picked on September 09 at $105.37
Diamonds - DIA - cls: 131.43 chg: -0.09 stop: n/a
We are not suggesting new positions in the DIA 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: 678.04 chg: +0.30 stop: n/a
We're not suggesting new positions in the OEX at this time. Our strangle strategy 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
Eaton Corp. - ETN - cls: 89.67 change: -1.71 stop: 91.99
ETN continues to sell-off. Shares broke down under what should have been support at the $90.00 level on Monday. We had been waiting for a breakout over resistance near $95.00 but at this point we're not going to wait any longer. Over the weekend we suggested that nimble traders might want consider buying puts if ETN breaks down under $90.00.
Picked on September xx at $ xx.xx <-- see TRIGGER