Allegheny Tech. - ATI - cls: 75.19 chg: +2.16 stop: 69.75 *new*
Bulls bought the dip in ATI again and the stock rallied close to 3% on Thursday. Our biggest complaint was volume today, which was very light. Big gains on light volume is a warning sign. We are adjusting our stop loss to $69.75. More conservative traders might want to raise their stops toward $72.00. 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
Petroleo Brasileiro - PBR - cls: 111.60 chg: +5.59 stop: 104.95
PBR really out performed the market today. Shares added more than 5% and did so on above average volume. Fueling the move was some news regarding the Tupi oil field. Evidently estimates for the Tupi oil field reserves have jumped from 1.7 to 10 billion barrels of oil and oil equivalents to 12 to 30 billion barrels of oil and oil equivalents. This is very significant. PBR owns a 65% stake in the Tupi field with British Gas and Portugal's Galp Energia owning 25% and 10%, respectively. We seriously considered buying the bounce today. However, shares still have some resistance in the $114-116 zone. We're going to stick to our plan and use a trigger at $116.00 to open positions. However, we might change our mind if we see another strong bounce from the $105 level again. 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
Ambac Fincl. - ABK - cls: 10.96 change: +0.02 stop: n/a
ABK continues to trade sideways in a narrow range as the market holds its breath on what happens next. Will a rescue plan materialize or will the bond insurers be downgraded forcing banks and financial institutions to unleash another round of write downs? While the rating agencies have held back on downgrading ABK and MBI for now they are not sitting still. Today Moody's downgraded Security Capital Assurance's credit rating six grades from AAA to A3. We're still betting on shares of ABK crumbling but this remains an aggressive, speculative play. The unofficial timeline for a rescue plan has somewhere between 9 days and the end of February before the rating agencies start downgrading companies like ABK and MBI. We do not have a stop loss on this play. It is 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. Our target was a decline towards $5.00 or less. We were suggesting the May puts.
Picked on January 27 at $ 11.54
iShares DJ Financial - IYF - cls: 90.11 chg: +1.49 stop: 93.01
In spite of all the doom and gloom last night following CSCO's earnings report and the negative retail same store sales numbers today the financial stocks did pretty well. The banking indices were up more than 2% and the IYF followed with a 1.67% bounce. This back and forth volatility can drive you nuts and akin to playing in a busy street. Eventually you get hit. Wait for a failed rally near $92.00 or a new decline under $89.00 before considering new put positions on the IYF. We're aiming for a test of the $80.00 region. Our official target is the $81.00-80.00 zone.
Picked on February 06 at $ 88.62
MBIA Inc. - MBI - close: 14.20 change: -0.08 stop: n/a
Wow! The action in MBI today should tell you something. Last night they announce a $750 million convertible offering (50.3 million shares of stock) and the stock rallies more than 10% in after hours trading. yet the stock opens at $14.26 and closes down for the day. Looks like no one is buying that last night's deal was enough to really help MBI and most believe that Warburg Pincus, who backed the deal, is just throwing good money after bad. On top of its all MBI said they were raising their loan loss reserves. We remain bearish on MBI and don't believe the rescue plan will show up in time. However, the banks might find it easier to swallow investing a few billion to save ABK and MBI than let these companies drown and then have to write down several times what it may cost them to "rescue" these companies. The unofficial timeline for a rescue plan has somewhere between 9 days and the end of February before the rating agencies start downgrading companies like ABK and MBI. This remains an aggressive, speculative 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 were aiming for a decline to $5.00 or less. Our suggested options were the May puts.
Picked on January 27 at $ 14.20
Myriad Genetics - MYGN - cls: 39.36 chg: -0.68 stop: 43.01
MYGN continue to breakdown and fell through support at $40.00 today. The stock did hit our suggested trigger to buy puts at $39.75. The play is now open. Our target is the $36.00-35.00 range. The Point & Figure chart is bearish with a $34 target. FYI: We always consider a biotech stocks to be a more aggressive, higher risk play because you never know when an FDA decision will be released or some clinical trial info will come out that could send the stock moving sharply either direction.
Picked on February 07 at $ 39.75 *triggered
Simon Properties - SPG - cls: 87.56 chg: +1.47 stop: 90.61
There seemed to be a common theme today for stocks. Sell off in the morning,
breakdown under support so you can trip some stop loss and triggers, and then
rally back sharply. That's what happened in SPG today. The stock broke down
under support near $85.00 and hit a new two-week low and our suggested trigger
at $84.39 before rebounding back into the green. We would now suggest waiting
and watching for a failed rally near $90 resistance before considering new put
positions. Our target
is the $76.00-
Picked on February 07 at $ 84.39 *triggered
Suncor Energy - SU - cls: 92.07 chg: +0.81 stop: 95.01
Wow! What a surprise (not). SU turned in the same performance that SPG, BGC, MOS, and USO did today - one of slipping under support and then bouncing back sharply. This is a dangerous spot for the bears. The overall pattern remains bearish but readers need to wait for the bounce to fail before considering new put positions. We have two targets. Our first target is the $85.50-85.00 range. Our second target is the $81.50-80.00 zone. This should be a two or three week play at which time we'll consider switching to bullish trades in oil and energy.
Picked on February 07 at $ 89.75 *triggeredd
(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: 122.47 chg: +0.47 stop: n/a
The DJIA and the DJX look like they're ready to bounce. If we're in a bear market then the question is how long will it last before it rolls over again. 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: 504.95 chg: + 3.24 stop: n/a
The major averages may have closed in the green but it was not a very bullish day. GOOG managed a meager 0.6% bounce although if you're bullish on the stock then holding the $500 region is probably a good sign. We don't see any changes from our previous comments. 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
General Cable - BGC - cls: 56.67 change: +0.32 stop: 54.95
Volatility was the name of the game in BGC today. Shares gapped open lower at $55.69 and spiked toward $53.55 before bouncing back and posting a gain on the day. The intraday move under support at $55.00 was enough to hit our suggested stop loss at $54.95 closing the play.
Picked on February 06 at $ 57.75 *triggered
Mosaic - MOS - close: 93.75 change: +0.31 stop: 88.99
The already volatile shares of MOS may have overreacted this morning to a gap down in shares of Bunge (BG). BG reported earnings this morning and beat estimates easily but the stock was punished anyway (BG does have a fertilizer unit). Meanwhile shares of MOS spiked lower opening at $91.17 and trading to $88.10 near its 50-dma before bouncing back. The stock hit our stop loss at $88.99 closing the play. Trading in MOS is almost always volatile but chart readers may note that shares look like they're forming a bull flag pattern over the last few days. A move over $96.00 might be a new bullish entry point.
Picked on February 04 at $ 95.51 *triggered
United States Oil Fund - USO - cls: 69.80 chg: +0.78 stop: 68.59
Crude oil futures rebounded after yesterday's beating but not before dipping a little lower this morning. Shares of USO slipped to $68.57, which was just enough to hit our stop loss at $68.59 and close the play. If the USO traded under $68.00 we would be tempted to consider bearish positions. As it stands now we would look for a new really over $71.50 as a potential bullish entry point to try again (and aim for the $77-80 zone).
Picked on January 24 at $ 70.93