Amgen Inc. - AMGN - cls: 56.58 change: -0.26 stop: 54.90
It was a quiet day in the markets on Monday. The biotech index digested some of its gains from Friday. Shares of AMGN also dipped lower. We are still on the sidelines waiting for a breakout to new relative highs. Our strategy suggests that readers use a trigger to buy calls at $58.01. If triggered our target is the $64.00-65.00 range, which might be a little too aggressive given our time frame. AMGN is due to report earnings around October 25th and we don't want to hold over the report. Furthermore chart readers will notice that AMGN has likely resistance at its 200-dma near around $59.50 and then again near $60.00. It's also worth noting that AMGN's P&F chart is still bearish and it will take a breakout over $60.00 to change it back into a bullish pattern.
Picked on October xx at $ xx.xx <-- see TRIGGER
Biogen Idec - BIIB - cls: 66.42 chg: -1.21 stop: 64.95
BIIB also encountered some profit taking on Monday and shares pulled back 1.79%. We would still consider new bullish positions here but readers really have a choice. You could wait for another dip and bounce near short-term support at $65.00. You could wait for a rebound from current levels near $66.50 or you could wait for a new relative high and another breakout over its short-term trendline of lower highs. There is potential resistance near $70.00 but we're going to aim for the $72.40-72.50 range. The P&F chart points to an $86 target. Part of our challenge is time. We do not want to hold over the October 23rd earnings report.
Picked on October 07 at $ 67.63
Broadcom - BRCM - cls: 39.47 change: +2.17 stop: 35.75 *new*
It was a big day for BRCM. The stock surged 5.8% on significant volume and shares have definitely smashed through resistance near $37.50. Fueling the move was an announcement from BRCM involving an expanded deal with Samsung. Here's an excerpt from their press release:
BRCM..."today announced that it has expanded its relationship with Samsung Electronics to include advanced 3G cellular solutions for a new series of Samsung mobile handsets that are now available. Broadcom launched its first generation 3G cellular baseband technology with Samsung over a year ago with the SGH-Z220, and the new handsets leverage the companies' prior joint investment. The new Samsung 3G mobile phones are now shipping to leading cellular operators in multiple countries in Europe, Asia, Africa, Australia and elsewhere."
BRCM's intraday high was $39.59. Our target is the $39.85-40.00 range. More conservative traders may want to consider an early exit now. Aggressive traders could aim higher since we have some time ahead of the October 23rd earnings report. BRCM doesn't seem to have a lot of short interest so we doubt this will turn into any sort of real short squeeze. Please note that we're adjusting the stop loss to $35.75.
Picked on September 12 at $ 35.85
Citigroup - C - clos: 47.80 change: -0.50 stop: 45.79
Financial stocks were no exception from the market's profit taking today. Shares of C pulled back just over 1% but it looks like traders might defend it near $47.50. We're not suggesting new positions at this time, especially if there is a chance that C might dip toward its 50-dma near $47.00, which would be a better entry point. Readers will want to strongly consider using a tighter (higher) stop loss. Our initial target is the $49.85-50.00 range. Please note that we do not want to hold over the October 19th earnings report.
Picked on September 16 at $ 46.64
Ceradyne - CRDN - cls: 77.66 change: -0.39 stop: 73.95
CRDN slipped lower but it looks like traders were buying the dip near its rising 10-dma this morning. More conservative traders may want to tighten their stop losses again. Our short-term target is the $79.50-80.00 range. The P&F chart is bullish with a $92 target.
Picked on September 25 at $ 74.61
Deutsche Bank - DB - cls: 133.61 chg: -1.55 stop: 128.99
DB is another financial stock that suffered some profit taking on Monday. While a mild pull back is not much of a concern it is worth noting that shares of DB have now slipped under the bottom of its three-day trading range. Shares might be poised to further retrace closer to its rising 10-dma around $131. We would wait for further signs of a pull back and bounce before considering new positions. There is potential resistance at the 200-dma near $138.70 so we're targeting a rally into the $138.00-140.00 range. The P&F chart is bullish with a $154 target.
Picked on October 01 at $130.79
Intl. Bus. Mach.- IBM - cls: 117.77 chg: +1.47 stop: 114.49
Tech stocks, specifically hardware-related stocks, out performed the broader markets today. Shares of IBM rose 1.2% and looks ready to make another breakout attempt. If you think IBM can breakout over resistance in the $119-120 zone then this is a new entry point for calls. The stock has already hit our first target in the $118-120 range. Our second, more-aggressive target is the $124.00-125.00 zone. FYI: The Point & Figure is very bullish with a $177 target. We do not want to hold over the mid October earnings report.
Picked on August 26 at $113.24
Kohl's - KSS - close: 60.45 change: -0.72 stop: 57.90
Retail stocks slipped on Monday as well. KSS dipped toward $59.50 before traders stepped in to buy the pull back. The bounce back this afternoon looks like a new entry point for bullish positions and more aggressive traders may want to take advantage of it. We're going to stick to our plan, which suggests readers use a trigger to open positions at $62.01. If we are triggered at $62.01 our target is the $67.00-68.00 range. Keep a wary eye on the 100-dma as potential overhead resistance. We do not want to hold over the November earnings report.
Picked on October xx at $ xx.xx <-- see TRIGGER
L-3 Comm. - LLL - cls: 106.50 chg: +1.76 stop: 99.99 *new*
Shares of LLL continued to show relative strength. The stock rose almost 1.7% and broke through short-term resistance near $105.00. LLL is quickly nearing our target in the $107.50-110.00 range. We're adjusting our stop loss to $99.99 but more conservative traders may want to use a tighter stop loss. More aggressive traders may want to use a higher target. The P&F chart points to a $115 target.
Picked on September 25 at $100.96
Martin Marietta - MLM - cls: 141.50 chg: -1.11 stop: 134.85
MLM spent Columbus Day 2007 churning sideways. We remain bullish on the stock with shares above broken resistance and what should be support near $140. However, MLM is still struggling with technical resistance at its 100-dma. More conservative traders might want to consider a tighter stop loss. The P&F chart now points to a $170 target. We have two targets. Our first target is the $149.00-150.00 range. Our second target is the $157.00-160.00 zone. We do not want to hold over the late October earnings report.
Picked on October 02 at $141.31
Stryker - SYK - cls: 72.48 change: -0.66 stop: 68.49
After several days of gains SYK finally hit some profit taking. Shares slipped less than 1% but the correction may not be over yet. While we remain very bullish on SYK we're not suggesting new positions at current levels. Wait and watch for a dip into the $71-70 zone. Broken resistance should now act as new support. We are adjusting our stop loss to $68.49. Our target is the $74.90-75.00 range. It would be tempting to aim higher, maybe the $77.50-80.00 range, but we don't have much time. SYK is due to report earnings on October 17th and we do not want to hold over the report. FYI: The P&F chart is bullish with an $83 target.
Picked on October 02 at $ 70.65
Terex - TEX - cls: 87.76 change: +1.35 stop: 83.75
It doesn't look like much on the daily chart but today's 1.5% gain in TEX is rather bullish. Traders bought the dip this morning and shares slowly began to inch higher. We would use this as a new bullish entry point to buy calls. The P&F chart is very bullish with a $100 target. Our target is the $94-95 range although more conservative traders may want to exit near $91.00.
Picked on September 25 at $ 86.50
(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.)
Dow Jones Industrial Avg. - DJX - cls: 140.44 chg: -0.22 stop: n/a
We now have less than two full weeks left before October options expire. Readers may want to consider an early exit now. We're going to stick with it given the DJIA's generally bullish trend. We are not suggesting new positions on the October version of our strangle. The options listed for our October strangle were 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
IDEXX Labs - IDXX - cls: 112.97 change: +0.57 stop: 113.85
IDXX continued to show a lot of volatility on Monday. The stock produced an early morning rally higher that hit an intraday high of $113.90. Our stop loss was $113.85 so the play has been closed. We remain skeptical of the rebound in IDXX and would keep an eye on it for further weakness and potential entries for a new bearish play down the road.
Picked on September 30 at $109.59