iShares China 25 - FXI - cls: 136.50 chg: -6.58 stop: 149.45
Thursday proved to be another rough day for stocks. The Chinese FXI index slipped more than 4.4%. Both short-term and daily technical signals have turned bearish. The FXI is getting awfully close to the $136-135 level we've been discussing as a potential entry point. Here's the plan. We are not going to try and nab the absolute bottom. We would rather wait and watch what happens. The FXI could easily hit $135 and just keep dropping. The Point & Figure chart for the FXI is forecasting a $120 target. If the FXI actually closes under $135 we'll consider switching directions and buying puts. If the FXI dips but rebounds back then we'll consider buying the bounce. What's important is that tomorrow we're just spectators. There is no official entry for us either direction.
Picked on February xx at $ xx.xx <-- see TRIGGER
Potash - POT - close: 159.15 change: -1.88 stop: 147.75
POT was unable to escape the market-wide sell-off today. If stocks continue lower tomorrow then look for POT to dip into the $155-153 zone. We're not suggesting new positions at this time. POT has already surpassed our early target in the $158-160 zone so readers should have already booked some profits. Our second, more aggressive target is the $168.00-170.00 zone. More aggressive traders may want to aim significantly higher. The Point & Figure chart is forecasting a $222 target. Again, this is a very volatile stock. Readers should consider it an aggressive, higher-risk trade.
Picked on February 12 at $147.50 *triggered
Smith Intl - SII - close: 63.79 change: -0.34 stop: 59.90
Oil is still trading near its record highs but oil service stocks were unable to avoid the market's sell-off. We're not suggesting new positions at this time but a bounce anywhere above $61 might look like a new bullish entry point. The stock has already hit our first target in the $64 zone. Our second target is the $68.00-70.00 zone. The P&F chart for SII is very bullish with an $80 target (it was a $77 target last week).
Picked on February 17 at $ 60.52
Wynn Resorts - WYNN - close: 95.00 change: -4.19 stop: 94.75
WYNN just got clobbered today. It's time to man the life boats and prepare to abandon ship. Today's move produced a bearish failed rally near $100 and the stock paused right at support. If the markets see any weakness at all tomorrow odds are very high that WYNN will breakdown. If WYNN does breakdown then we will want to switch to puts. Our stop loss on the call play is $94.75. We'll use a trigger at $94.45 to buy puts. We told readers earlier that a breakdown under $95 would be an opportunity to switch sides. If we are triggered at $94.45 our bearish target is the $86.50-85.00 zone. Our stop on the put play will be 100.26, which is 3 cents above Thursday's high.
BUY PUT APR 95.00 UWY-PS open interest=266 current ask $7.00
Picked on March 04 at $ 97.28
Yahoo! Inc. - YHOO - close: 28.70 change: -0.03 stop: n/a
YHOO resisted any serious profit taking on Thursday. Overall we don't see any changes to our previous comments. We need to see a higher bid from MSFT before March expiration. This remains a very risky, aggressive bet. Our suggested calls were the March $30 or March $32.50 strikes.
Picked on February 17 at $ 29.66
Ambac Fincl. - ABK - cls: 7.42 change: -1.28 stop: n/a
ABK is starting to see some real follow through to the downside. Shares lost another 14.7% today on top of yesterday's 19% drop. We are no longer suggesting new bearish positions. This remains a very speculative play. We will definitely hold over the April earnings if we get the chance. Previously we had been suggesting the May out-of-the money puts ($5.00 and $2.50 strikes) and a speculative out-of-the money March ($20) call as a hedge should a bailout plan come to pass.
Picked on January 27 at $ 11.54
MBIA Inc. - MBI - close: 11.60 change: -0.58 stop: n/a
Shares of MBI slipped 4.7% and is nearing support near $11.00. The path of least resistance continues to be down. We're not suggesting new bearish positions at this time. We had been suggesting the out-of-the-money May puts (7.50, 5.00 and 2.50 strikes) and a March $22.50 (or $20.00) call as a hedge in case a bailout plan for the bond insurers does get done. We will definitely hold over the April earnings if we get the chance.
Picked on January 27 at $ 14.20
NII Holdings - NIHD - close: 38.26 change: -1.88 stop: 41.26
The reversal in NIHD continues and the stock has finally produced a clear breakdown under support. The move looks like a new entry point for puts. Our target is the $35.50-35.00 zone. More aggressive traders could aim for the trendline of lower lows. The Point & Figure chart is bearish with a $19 target. FYI: The latest data lists short interest at 3.8% of the 171.7 million-share float, which is only about 1.5 days worth of short interest.
Picked on March 04 at $ 38.95 *triggered
Precision Castparts - PCP - cls: 106.25 chg: +0.57 stop: 111.51
Positive comments from a Goldman Sachs analyst helped buoy shares of PCP on Thursday. The overall trend is still down. Another failed rally under $110 could be used as a new entry point for puts. Our target is the $101.00-100.00 zone.
Picked on March 03 at $109.49 *triggered
Everest Re Group - RE - close: 93.66 chg: -1.14 stop: 100.35
The S&P IUX insurance index dropped 2.7% and plunged to a new multi-year low. Shares of RE, while not trading at a new low yet, did lose 1.2%. We remain bearish here. We have two short-term targets. Our first, conservative target is $93.50. Our second, more aggressive target is the $91.00-90.00 zone. We're suggesting a stop loss at $102.01 but more conservative traders might be able to get away with a stop around $100.51. FYI: The P&F chart is bearish with a $74 target.
Picked on February 28 at $ 97.93
Sears Holding - SHLD - close: 93.49 change: -3.07 stop: 100.51
Thursday brought same-store sales figures for a lot of retailers. Wal-Mart (WMT) and Target (TGT) turned in numbers that were better than expected but most retailers disappointed. We did not see any results for SHLD. However, the stock broke down anyway and traded under support near $95.00 and hit our trigger to buy puts at $94.00. The play is now open. Our target is the $85.50-85.00 zone. As expected the move under $94.00 has produced a brand new quadruple bottom breakdown sell signal on the P&F chart, which now forecasts an $88 target. This target is likely to move lower. There are a lot of investors who believe SHLD is going lower. The most recent data puts short interest at more than 19% of the 65 million-share float. That is almost 7 days worth of short interest. Naturally that raises our risk of a short squeeze.
Picked on March 06 at $ 94.00 *triggered
Shaw Group - SGR - close: 62.11 change: -1.78 stop: 59.85
While we are long-term fundamentally bullish on SGR the action all week long has been bearish. Thursday was no exception. The stock has produced a mini bearish engulfing candlestick pattern, which is typically seen as a reversal pattern. At this point SGR looks like it is headed to the $60.00 level. We are suggesting that readers exit immediately. We'd rather exit now and cut our losses than see SGR hit our stop loss. We can always jump back in if SGR delivers a nice bounce from the $60 region. It's always frustrating to see SGR trade within 25 cents of our target (69.50) and not get there, which it did on February 27th. SGR is definitely a stock we would consider buying the dip once we see where the dip is.
Picked on February 24 at $ 64.53