Broadcom - BRCM - cls: 35.50 change: -0.37 stop: 33.95
We're starting to see a lot of mixed signals on BRCM. Some of the short-term technical indicators are suggesting the next move will be lower. Meanwhile the actual price still has a bullish pattern of higher lows. Furthermore the stock didn't react very negatively to the legal reversal over the import ban against rival QCOM's phones. Overall the picture looks like BRCM is coiling for a major breakout over resistance near $37.00. More conservative traders may still want to wait for a rise over $37.00 before considering call positions. At this point more nimble traders can watch for a bounce near its 10-dma in the $35.00-35.25 zone or a move back over $36.00 as a potential entry point. Our target is the $39.85-40.00 range. The Point & Figure chart is bullish with a $49 target.
Picked on September 12 at $ 35.85
Intl. Bus. Mach.- IBM - cls: 115.13 chg: -0.82 stop: 113.24
We have to reiterate our warning on IBM. The stock has been under performing the last few days and the technical indicators are starting to turn bearish. The MACD on the daily chart is very close to a new sell signal. The RSI looks weak. Weekly indicators are also worrisome. Plus, the chart pattern is starting to look like a bearish double top. IBM does have some short-term support near $114.00 and then potential support at the 50-dma but the 50-dma is near $113.15 so dipping to the 50-dma would hit our stop loss. More conservative traders may want to bail out early and wait for a breakout to new highs before considering new positions. We're not suggesting new positions at this time. 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: 39.72 change: +0.58 stop: 37.48
Technical signals on MTW are mixed with both bullish and bearish indicators. There was no follow through on Wednesday's bearish reversal and MTW still has a bullish pattern of higher lows. If you look closely Friday's session was actually a bullish engulfing reversal pattern. This looks like a new entry point to buy calls. However, readers might feel more comfortable waiting for a rise past Friday's high at $40.06. Or you could wait for a rise past the September highs near $41.00. Our post-split target is the $44.00-45.00 range. Our post-split stop loss is $37.48. The Point & Figure chart is forecasting a $56 target.
BUY CALL OCT 37.50 MTW-JU open interest= 607 current ask $3.50
Picked on September 05 at $ 40.13 *split adjusted
Triumph Group - TGI - cls: 81.00 change: +4.54 stop: 75.85*new*
Target achieved! TGI soared to a 5.9% gain on Friday. Volume on the move was pretty heavy. Driving the rally was some positive analyst comments. The stock was upgraded to a "buy" after one analyst firm raised their earnings estimates on TGI and raised their price target from $78 to $88. We had two targets on TGI. Our first target was the $79.75-80.00 range. Our second target is the $82.50-84.00 range, which could be hit on Monday if there is any follow through higher. We are adjusting our stop loss to $75.85. We would not suggest new positions at this time. FYI: The latest data puts short interest at more than 13% of the 16-million share float. That's a high degree of short interest and raises the risk of a short squeeze.
Picked on September 13 at $ 75.85
Ashland Inc. - ASH - cls: 59.98 change: +0.54 stop: 61.01
If you're holding puts on ASH then last week was pretty uncomfortable. Monday's sell-off did not see any follow through lower. Wednesday was technically a bullish signal higher following Tuesday's inside day. Friday's session produced a bullish engulfing (reversal) candlestick pattern. Yet in spite of everything ASH is still struggling with resistance near $60.00 and continues to have overhead resistance at the $60.50 level and potential resistance at the 50-dma near $60.30. If you're a more conservative trader it may still make sense to exit early and cut your losses now. We seriously considered doing just that. However, we don't know yet what direction the market will move after the FOMC meeting and ASH still has some hurdles above it. We would probably not start any new put positions at this time. 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: 49.91 change: +1.05 stop: 52.80
Some of our readers might want to consider an early exit in AYI right here. Friday's move looks like a bullish engulfing (reversal) candlestick pattern. Plus, Friday also produced what could be interpreted as a bullish double-bottom near $48.00. Now normally a bullish engulfing candlestick needs to see some confirmation. If we see AYI breakout or close over its 10-dma we might abandon the play early. At this time we're not suggesting new bearish positions. 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
Whirlpool - WHR - cls: 91.22 change: -0.37 stop: 95.15
WHR continues to under perform the market. Shares appear ready to breakdown under support at the $90.00 level. However, we honestly expect the stock to merely trade sideways for the next day and a half as investors wait for the FOMC meeting to finish on Tuesday. Technically a failed rally under $92.50 or a new decline under $90.00 could be used as a new entry point for puts. We have two targets. Our first target is the 87.75-87.50 range. Our second target is the $85.00-84.00 range. The P&F chart is bearish with an $87 target.
Picked on September 09 at $ 92.77
U.S.Steel - X - close: 91.64 change: +1.35 stop: 96.71 *new*
This looks like a pivotal spot for shares of X. A week ago the oversold bounce was rolling over and the stock look poised to begin a new leg down. Yet twice this past week traders have bought the dip at the $89.00 level. Will the stock rebound higher and breakout past resistance near $93.00, its 200-dma near $96.70, or the early September highs near $96.60? That may very well depend on how the market reacts to the FOMC meeting and what the fed heads have to say about the state of the economy. At this point we would not suggest new put positions with X above $89.00. We do have a wide stop loss because the market (and the stock) has been somewhat volatile. More conservative traders may want to adjust their stop loss to something tighter. Please note that we are adjusting our stop loss to $96.71.
Picked on September 12 at $ 89.26
(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: 117.19 chg: +2.36 stop: n/a
This week could be the moment of truth for the brokers. Several of the largest broker dealers report earnings. LEH reports on Tuesday, MS on Wednesday, and BSC and GS report on Thursday. Many expect LEH to set the tone on Tuesday. Given the big rebound in BSC (almost 12 points) it looks like investors are betting on a positive report. Plus, there has been renewed speculation that BSC is a takeover target. It doesn't hurt that a billionaire investor just upped his stake in BSC this past week. We're not suggesting new positions at this time. Currently our strangle involves the October $115 call (BSC-JC) and the October $95 put (BVD-VS). Our estimated cost was $9.50 and we want to sell if either option hits $14.00 or more. The company is expected to report earnings on September 20th. This should be considered a more aggressive play.
FYI: Last week we switched our strangle from September strikes to October strikes due to a move in BSC's earnings report date. If you're holding the September strikes it might work out. They were the Sep. $115 calls and Sep. $95 puts. Our estimated cost was $4.40. We wanted to sell if either option hit $7.85. Currently the Sep. $115 call is trading at $5.70bid/$5.80ask.
Picked on September 09 at $105.37
Diamonds - DIA - cls: 134.46 chg: +0.16 stop: n/a
This week could be the turning point in the markets for fall. While we are not suggesting new strangle positions on the DIA you could certainly create a new one on Monday or Tuesday morning ahead of the FOMC meeting. Options are available at $1.00 strikes so you're free to pick and choose how much risk you want to take. Please note we are adding another (virtually identical) strangle on the DJX tonight. Our DIA 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 have one week (five trading days) left before September options expire.
Picked on August 30 at $132.57
S&P 100 Index - OEX - cls: 694.38 chg: -0.62 stop: n/a
The OEX looks poised to breakout over resistance near $700 but it all depends on how the market reacts to the Fed decision on Tuesday. 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
Transocean - RIG - cls: 106.16 change: -1.42 stop: 104.85
We are going to suggest an early exit in RIG. If you read this weekend's market wrap then you know that Jim is bearish on oil and expects another sharp correction. Technically, RIG still has support at the $105 level so more aggressive traders might want to consider sticking it out.
Picked on August 31 at $105.75
L-3 Comm. - LLL - cls: 98.44 change: +0.17 stop: 98.55
We have been watching and waiting on LLL for a week and the stock hasn't moved much. We've been waiting for a breakdown under support near $96.00 with a suggested trigger to buy puts at $95.90 but it just hasn't happened. At this point it seems like the odds are about equal that shares could breakout either direction. If you really wanted to play LLL then a strangle might work but earnings aren't expected until the end of October. We're dropping the play unopened.
Picked on September xx at $ xx.xx <-- see TRIGGER