Allegheny Tech. - ATI - cls: 72.18 chg: -1.35 stop: 68.65
Unfortunately, we were caught on a spike higher Monday morning in ATI. The first thing Monday morning ATI spiked to $75.17 before shares quickly reversed trading back under resistance at $75.00. We had suggested an entry point to buy calls at $75.11. So the play is open. If you did not open positions on Monday morning then we would look for a dip into the $71.00-70.00 zone, which was our alternative entry point to buy calls. ATI should have short-term support near $70.00 and its 10-dma near $69.75. Our short-term target is the $79.75-80.00 range or the 50-dma, whichever is hit first. The P&F chart for ATI looks very bullish with an $87 target.
Picked on February 04 at $ 75.11 *triggered
General Cable - BGC - cls: 58.31 change: -2.03 stop: 54.95
Shares of BGC slipped 3.3% today but the stock stopped short of hitting our suggested entry point in the $57.75-57.00 zone. If the major indices see any follow through lower tomorrow morning then odds are good that BGC will hit our entry point to buy calls. We would try and be patient and wait for the dip near $57.00 or BGC's 10-dma near $56.60. If triggered our target is the $64.50-65.00 range or the 50-dma, whichever comes first. The Point & Figure chart is very bullish with a $73 target.
Picked on February xx at $ xx.xx <-- see TRIGGER
Centex - CTX - close: 25.59 change: -1.08 stop: 24.99
As we expected the homebuilders hit some profit taking this week. CTX slipped into our suggested entry point to buy calls on Monday, which was the $27.00-26.00 range. Unfortunately, the market's sharp sell-off today pushed CTX even lower. Not helping were bearish comments from CTX's CEO today. Management said that there is still no end in sight for the current housing slump and that this would be the biggest and deepest housing slow down since World War II. CTX "should" have support near $25.00 bolstered by a cloud of moving averages under the $25 level but our stop loss is very close at $24.99 and it wouldn't take much for CTX to dip under $25 and stop us out. More aggressive traders may want to adjust their stops lower toward $24.75 or $24.50. We're going to inch our stop loss down 10 cents to $24.89. Our short-term target is the $32.00-32.50 zone. We're also adding a second target in the $34.75-35.00 range but we do expect the 200-dma to act as resistance. The Point & Figure chart is very bullish with a $51 target. FYI: The numbers may not be up to date but the most recent data put short interest at 18% of CTX's 121 million-share float. That raises the odds of a short squeeze.
Picked on February 04 at $ 27.00 *triggered
Mosaic - MOS - close: 92.69 change: -5.76 stop: 88.99
Shares of MOS continue to be very volatile. The stock rallied about $5.00 on Monday and hit our trigger to buy calls at $95.51 opening the play. Shares then spiked to $100.90 this morning before reversing course and giving back almost 6%. MOS traded in an $8.79 range today. At this point we would wait and watch for a bounce near $90 as a new bullish entry point. Our target is the $108.00-110.00 range.
Picked on February 04 at $ 95.51 *triggered
Petroleo Brasileiro - PBR - cls: 106.47 chg: -7.42 stop: 105.85
Foreign stocks traded sharply lower in a knee-jerk reaction to the U.S. ISM services report today. PBR lost 6.5% and is testing technical support near its 50-dma and price support near $105. Aggressive traders might want to consider buying a bounce from $105. We are going to wait. Our suggested entry point to buy calls was $116.00, which has not been hit yet. We're going to wait and see if PBR can trade near $100 and then consider bullish positions there. We will be watching the $102-100 zone closely. Currently our trigger to buy calls at $116 remains in play. Our target is the $128.00-130.00 range. A move over $116 would produce a new Point & Figure chart buy signal. FYI: Another risk is PBR's earnings report. We can't find an earnings date and they normally report in mid February. That is a risk because we do not like to hold over an earnings report.
Picked on February xx at $ xx.xx <-- see TRIGGER
United States Oil Fund - USO - cls: 70.15 chg: -1.22 stop: 68.59
Another round of recession fears sent crude oil futures lower. The USO dipped to $69.43 before bouncing back above $70 and its 100-dma. We would probably wait for a rebound back above $71 before considering new bullish positions. More conservative traders may want to tighten their stops toward today's low. We do want to point out that many of the short-term technical oscillators have turned bearish. You may want to reconsider a tighter stop! Our short-term target is the $74.50-75.00 range. More aggressive traders could easily aim for the $77.50-79.00 region.
Picked on January 24 at $ 70.93
Ambac Fincl. - ABK - cls: 11.39 change: -0.00 stop: n/a
Enthusiasm for a bond insurer bailout seems to have fizzled from last week. ABK is back to testing the $10 level. Today's news certainly didn't help the bulls with Fitch warning again that they're putting the bond insurers on a "negative" credit watch with a likely downgrade to come. CNBC actually had a decent piece this morning discussing how the rating agencies were slow to downgrade the bond insurers because the ratings companies made so much money by granting their triple AAA rating to the bond insurers. Definitely sounds like a conflict of interest there. We do not have a stop loss on this play. It was a lottery-ticket strategy. However, if you want to use a stop consider a stop loss above $15.50 or above the $16.50-17.00 region. Of course if ABK rallies that sharply these deep out of the money puts won't be worth much. ABK looks like it has resistance at $15.50, 16.50, and then $20.00. We are not suggesting new positions at this time. Our target was a decline towards $5.00 or less. FYI: Most of the credit rating agencies have hinted that they're willing to hold off a couple of weeks before downgrading these companies. It could be a very volatile couple of weeks.
Picked on January 27 at $ 11.54
MBIA Inc. - MBI - close: 14.90 change: -0.49 stop: n/a
The hope-fueled bailout rebound in MBI has stalled. Ratings agencies are once again warning that they will downgrade the bond insurers. MBI has pulled back to the $15 level. We don't see any changes from our previous comments (or comments in the ABK play). We do not have a stop loss since this was a lottery-ticket style of play but if you wanted to play one consider putting your stop above resistance near $17.50 or above $18.00. We are not suggesting new put positions. We were aiming for a decline to $5.00 or less. FYI: Most of the credit rating agencies have hinted that they're willing to hold off a couple of weeks before downgrading these companies. It could be a very volatile couple of weeks.
Picked on January 27 at $ 14.20
(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.)
DJIA 1/100 Index - $DJX - cls: 122.65 chg: -3.70 stop: n/a
Wow! In just two days the $DJX has moved from one extreme to the other. Now the index is resting near the put side of our strangle at $122. We have less than two weeks left before February options expire. We are not suggesting new strangle positions at this time. The options we suggested were the February $127 calls (DJW-BW) and the February $122 puts (DJW-NR). Our estimated cost was $3.36. We want to sell if either option hits $4.85 or more.
Picked on January 29 at $124.80
Google - GOOG - close: 506.80 chg: +11.37 stop: n/a
The time premium on these February GOOG options is evaporating very fast! The February $500 put (GOP-NO) should have hit our target today at $27.00. When shares of GOOG traded down to $488.52 this morning the GOP-NO put only hit $21.70. GOOG's bounce back this afternoon left the put trading near $11. If the market continues lower then GOOG might trade to its August 2007 low of $480 but we would not count on it. We need to be defensive here. At this point we would start taking money off the table every time the February $500 put starts trading near $20.00. We do have just under two weeks left and GOOG can still see some huge moves between now and February expiration but it's probably going to be a gut-churning two weeks. We are not suggesting new positions. The options we suggested were the February $600 calls (GOO-BT) and the February $500 puts (GOP-NO). Our estimated cost is $17.00. We want to sell if either option hits $27.00 or more.
Picked on January 30 at $548.27
DIAMONDS Trust - DIA - close: 122.96 chg: -3.07 stop: 123.99
The market's reaction to the ISM report today sent the DIA gapping lower. The ETF actually opened at $124.69 and never traded above $124.88 today. Our suggested entry point was the $125.50-125.00 zone so DIA jumped right past it. We are dropping DIA as a bullish candidate for now but more aggressive traders might want to consider buying a bounce from the $122 level or the $120 level.
Picked on February xx at $ xx.xx *never opened
Foster Wheeler - FWLT - cls: 66.19 change: -4.32 stop: 66.49
On Monday S&P raised their credit outlook on FWLT to "positive" but the news failed to lift the share price of FWLT. Today was a another rough day for the bulls. The volatile shares of FWLT lost almost 6.2% and broke through multiple levels of short-term support. The stock hit our stop loss at $66.49 closing the play. FWLT might bounce at $65.00 but if the market continues to sink we would look for potential entry points near $60 or its rising 200-dma.
Picked on February 03 at $ 71.80
Shaw Group - SGR - cls: 54.30 chg: -3.06 stop: 54.85
Investor reaction to the ISM report today was very bearish. SGR gapped open lower at $56.00 and dipped toward its 200-dma near $54.00. One of our suggested entry points to buy calls was at $56.00 so the play would have been opened at the first trade today. Unfortunately, SGR quickly pierced the $55.00 level and hit our stop loss at $54.85 closing the play just as quickly.
Picked on February 05 at $ 56.00 *triggered /stopped 54.85
Polo Ralph Lauren - RL - cls: 57.46 chg: -3.00 stop: 62.55
Time is up. It was our plan to exit today at the closing bell to avoid holding over RL's earnings report tomorrow morning. Wall Street expects RL to report a profit of 77 cents a share.
Picked on January 27 at $ 59.19