Apple Inc. - AAPL - cls: 138.41 change: -0.40 stop: 133.69
AAPL displayed relative strength this morning and rallied past resistance at the $140.00 level. Our suggested triggered to buy calls was at $140.25 so the play is now open. Unfortunately, the stock was unable to maintain its gains thanks to a generally wary market ahead of tomorrow's FOMC meeting. Another move over $140.00 or $140.60 (near today's high) can be used as a new entry point but readers might feel better waiting until after the FOMC meeting's decision on interest rates. We have two targets. Our first, more conservative target is the $144.75-145.00 range. Our second, more aggressive target is the $149.00-150.00 range. We do have a very wide (aggressive) stop loss because the markets and AAPL have been so volatile. Readers are strongly encouraged to find their own stop loss placement that best suits their risk level. We will note that the technicals are somewhat mixed but the P&F chart is still bullish with a $180 target. We do not want to hold over the mid October earnings report.
Picked on September 17 at $140.25
Broadcom - BRCM - cls: 34.85 change: -0.65 stop: 33.95
Investors were cautious ahead of the FOMC meeting and the semiconductor sector hit some profit taking on Monday. BRCM lost 1.8% and broke down under its 10-dma, which is short-term bearish. A bounce near $34.00 could be used as a new entry point but an alternative entry would be to wait for a new rally past $36 or $37. 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
Citigroup - C - clos: 46.03 change: -0.61 stop: 44.49
Everyone is waiting for the Fed meeting tomorrow while the financial stocks are also looking to see what LEH has to say about their quarterly earnings and sub-prime exposure. LEH reports tomorrow morning and could set the direction for financials. We're suggesting call positions in C right now. You might want to wait until after the Fed meeting or until after C can clear the $47.50 mark. Our initial target is the $49.85-50.00 range but we might decide later to add a more aggressive target at the 200-dma.
Picked on September 16 at $ 46.64
Intl. Bus. Mach.- IBM - cls: 114.52 chg: -0.61 stop: 113.24
IBM continues to under perform and shares have broken what should have been round-number support at $115 and are heading for what appears to be short-term price support near $114.00. There is also potential technical support at the 50-dma near $113.20. Unfortunately, our stop loss is a little tight and more aggressive traders might want to put their stop under $113.00. We don't see any changes from our weekend comments. The MACD has now produced a new sell signal. RSI looks weak. The daily chart is starting to look like it has produced a bearish double top pattern. 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: 39.86 change: +0.14 stop: 37.48
We don't see any changes from our weekend comments on MTW. The stock churned sideways ahead of tomorrow's fed meeting. 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.
Picked on September 05 at $ 40.13 *split adjusted
Stryker - SYK - cls: 67.20 change: -2.89 stop: 65.90
Ouch! SYK lost over 4% today. The stock plunged right at the opening bell and never recovered. Making the day even more frustrating was the lack of news behind the big decline. Fortunately, we are still just spectators at this point. It was our suggested strategy to buy calls on a breakout to new highs with a trigger at $70.65. The stock opened at $69.69 and never looked back. We'll keep SYK on the play list for now in case it can recover. If triggered at $70.65 our target is the $74.90-75.00 range. Given the length of SYK's consolidation we would actually aim higher, maybe the $77.50-80.00 range, but we don't have much time and plan to exit ahead of the mid October earnings report. The P&F chart is bullish with an $83 target.
Picked on September xx at $ xx.xx <-- see TRIGGER
Triumph Group - TGI - cls: 80.86 change: -0.14 stop: 75.85
Today's minor decline in TGI looks like relative strength to us. The temptation to do some profit taking after Friday's big move in the stock should have been huge but TGI managed to hold on to the vast majority of its gains. Shares traded sideways in a 75-cent range for most of the session. We had two targets on TGI. Our first target has already been hit in the $79.75-80.00 range. Our second target is the $82.50-84.00 range. 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
Thornburg Mtg - TMA - cls: 13.20 chg: -0.43 stop: 10.90
TMA trended lower ahead of the Fed meeting tomorrow and shares closed down over 3% albeit on very light volume. We would use the dip as a new bullish entry point. If you're the patient type then look for another dip toward $12.50 or the 10-dma near $12.80 as an entry point. One potential risk is LEH's earnings tomorrow morning. If LEH says something nasty about their sub-prime exposure then TMA could get wrongly painted with the same brush and shares could sell-off in error. We have two targets for TMA. Our first target is the $16.25-16.50 zone. Our second target is the $17.50-19.00 range. The P&F chart has reversed into a new buy signal with a $19.50 target. We do not want to hold over the mid October earnings report.
Picked on September 16 at $ 13.63
Ashland Inc. - ASH - cls: 60.13 change: +0.15 stop: 61.01
ASH actually pierced resistance near $60.50 and its 50-dma on an intraday basis on Monday. The move probably hit a few stop losses but not enough to spark any major short covering. The stock pared its gains and overall it looks like a new entry point for shorts. However, we would wait until after the Fed meeting to re-evaluate any new positions in ASH. 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: 48.63 change: -1.28 stop: 52.80
The good news in AYI today was the lack of follow through on Friday's bullish reversal candlestick pattern. Shares look poised to trend lower. However, the market reaction to the Fed meeting could change everything. It is strongly suggested that readers do a little profit taking of their own before the Fed meeting ends. 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: 91.28 change: +0.08 stop: 95.15
We do not see any changes from our weekend comments on WHR. We warned readers that the stock would likely trade sideways ahead of the FOMC 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: 91.19 change: -0.45 stop: 96.71
It's the same story, different stock. X traded sideways as the market waits for the Fed decision on Tuesday. 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.
Picked on September 12 at $ 89.26
Energy Sector SPDR - XLE - cls: 72.65 chg: +0.15 stop: 73.65
Crude oil spiked to another new all-time high today. We're waiting for a reversal and a breakdown in the XLE. We doubt that many of the speculators want to take possession of their oil futures so the commodity should see some heavy selling in the next couple of days. We are suggesting that readers buy puts on the XLE to capture any correction in oil. However, we're going to list a trigger to open positions at $71.15, which is just under the 10-dma. More conservative traders could put their trigger under the $70.00 mark and the 50-dma. If the play is triggered at $71.15 our target is the $65.50-65.00 range. An alternative target could be the rising 200-dma (currently near $63.80).
Picked on September xx at $ xx.xx <-- see TRIGGER
(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.)
AutoZone - AZO - cls: 108.62 change: -1.28 stop: n/a
Today was our one day to open strangle positions ahead of AZO's earnings report tomorrow. Wall Street expects a profit of $3.25 a share. We listed this play using September options, which expire after Friday. Given our brief time frame we labeled this an aggressive play. We listed two strangles. The first strangle was with the September $115 calls (AZO-IC) and the September $105 puts (AZO-UA) with an estimated cost of $2.50. We want to sell if either option hits $3.85 or higher. Our second combo suggested the September $120 calls (AZO-ID) and the September $100 puts (AZO-UT) with an estimated cost of $0.95. We would sell if either option hits $1.85.
Picked on September 16 at $109.90
Bear Stearns - BSC - cls: 115.38 chg: -1.81 stop: n/a
Tomorrow is the big day for BSC. Earnings should be out tomorrow morning before the bell. Wall Street expects a profit of $1.98 a share. 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.
Picked on September 09 at $105.37
Diamonds - DIA - cls: 134.06 chg: -0.40 stop: n/a
Tomorrow is also the big day for the major indices. We're expecting some big moves after the Fed's decision on rates and their comments on the economy. We're not suggesting new plays at this time. 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 four trading days left before September options expire.
Picked on August 30 at $132.57
Dow Jones Industrial Avg. - DJX - cls: 134.03 chg: -0.40 stop: n/a
Here's another strangle play on the DJIA using the DJX index. We're not suggesting new positions after the Fed meeting tomorrow. We listed two separate strategies. Our September strangle suggested the September $137 calls (DJY-IG) and the September $132 puts (DJW-UB) with an estimated cost of $1.25. We want to sell if either option hits $2.00. Our October strangle suggested the October $137 calls (DJY-JG) and the October $132 puts (DJW-VB) with an estimated cost of $4.75. We want to sell if either option hits $6.75.
Picked on September 16 at $134.43
Lehman Brothers - LEH - cls: 58.62 chg: -0.88 stop: n/a
Tomorrow morning is the moment of truth for LEH. The company announces earnings and Wall Street expects a profit of $1.52 a share. We're not suggesting new positions at this time. This is an aggressive play since the September options expire in four days. We suggested the September $65 calls (LES-IM) and the September $55 puts (LES-UK). Our estimated cost was $1.55. We want to sell if either option hits $2.50 or higher.
Picked on September 16 at $ 59.50
S&P 100 Index - OEX - cls: 691.12 chg: -3.26 stop: n/a
We are expecting some big moves in the OEX after tomorrow's Fed meeting. We're not suggesting new positions 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
Financial SPDR - XLF - cls: 33.66 chg: -0.32 stop: n/a
The XLF should see some movement on both the LEH earnings news and the Fed meeting tomorrow. We're not suggesting new positions at this time. We're going to be aggressive and suggest the September options, which expire in five days. You might want to reconsider and check out the October strikes. Our suggested strangle used the September $35 calls (XLF-II) and the September $33 puts (XLF-UG) with an estimated cost of $0.65. We want to sell if either option hits $0.95 or higher.
Picked on September 16 at $ 33.98