Aracruz Celulose - ARA - cls: 78.72 chg: +0.75 stop: 74.75
Shares of ARA continue to consolidate sideways. The stock has been trading sideways for three weeks now and with the market poised to breakout higher we think ARA will follow. We're suggesting a trigger to buy calls at $80.25. The stock has been somewhat volatile so we're using a wide, aggressive stop loss at $74.75 and more conservative traders may want to use a stop near $77 instead. If triggered at $80.25 we have two targets. Our first target is the $84.50-85.00 range. Our second target is the $88.50-90.00 zone. Currently the Point & Figure chart is bearish but a new rise over $80.00 would produce a brand new triple-top breakout buy signal.
BUY CALL JUN 80.00 ARA-FP open interest= 33 current ask $4.00
BUY CALL JUL 75.00 ARA-GO open interest=107 current ask $7.70
Picked on April xx at $ xx.xx <-- see TRIGGER
Alliant Tech - ATK - close: 110.18 chg: +1.44 stop: 105.99*new*
Target achieved! Defense stocks continued to rally and shares of ATK broke through technical resistance at its 200-dma. Shares added 1.3% and hit an intraday high of $110.52. Our initial target was the $109.90-110.00 zone. We are adjusting our stop loss to $105.99. More conservative traders may want to use a tighter stop in the $107.50 region. We wouldn't be surprised to see a dip back toward $108. Even though ATK closed over resistance near $110, which is bullish, we're not suggesting new positions at this time. Instead wait for a dip or a bounce in the $108.00-107.50 zone. Our second target is the $114.00-115.00 range. FYI: As expected a rally over $110 has produced a new P&F chart buy signal that now points to a $133 target. We do not want to hold over the May 8th earnings report.
Picked on April 21 at $106.00 /1st target hit $109.90
Express Scripts - ESRX - close: 73.71 chg: +2.13 stop: 68.49*new*
Target exceeded! ESRX out performed the markets on Friday with a 2.9% rally to a new three-month high. Our fist target was the $72.50 mark and shares hit $74.27. We strongly suggest readers take profits right here! We are raising our stop loss to $68.49. Our second target is the $74.85-75.00 zone. We only have two days left for this play. ESRX is due to report earnings on April 29th and we don't want to hold over the announcement.
Picked on April 21 at $ 67.50 *1st target achieved 72.50
Fluor - FLR - close: 161.47 chg: +4.42 stop: 152.49 *new*
After trading sideways for the first half of Friday the bulls finally joined the party and FLR raced back across the $160 level. The stock looks poised to make a run at its October 2007 highs. We are adjusting the stop loss to $152.49, just under the Thursday low. The stock has already hit our target at the $159.00 level. Our second target is the $168.00-170.00 zone. We do not want to hold over earnings in early May. FYI: The P&F chart is bullish with a $184 target.
Picked on April 01 at $146.50 *triggered /1st target hit $159
Hovnanian - HOV - close: 11.85 chg: +0.29 stop: 10.45
The homebuilders seemed to lag behind the market on Friday but HOV still posted a 2.5% gain. Volume has been very light all week for HOV. It seems like investors are waiting for something and it might be the FOMC meeting this week. We're leaving our stop at $10.45 for now. We would still consider bullish positions here or on a dips near $11.00. Our target is the $13.50-14.00 zone. Our second, more aggressive target is the $14.75-15.00 zone. FYI: The P&F chart is bullish with a $25 target. HOV still has a high amount of short interest. The most recent data listed short interest at almost 65% of the 37.2 million-share float. That really raises the odds of a short squeeze, which would be great for us.
Picked on April 16 at $ 11.86
Intl.Bus.Mach. - IBM - cls: 123.08 chg: -1.11 stop: 118.49
We are really tempted to buy this dip in shares of IBM on Friday. The stock slipped about 0.9% to the bottom of its $122.00-125.00 trading range, where it has been all week long. More aggressive traders may want to jump in right here. We're going to wait and stick to the plan. Our suggested entry range is the $120.75-120.00 zone. If triggered we'll have two targets. Our first target is the $124.90-125.00 range. Our second target is the $128.00-130.00 zone.
Picked on April xx at $ xx.xx <-- see TRIGGER
Joy Global - JOYG - close: 75.69 chg: +2.29 stop: 69.95
Fellow mining equipment maker BUCY reported earnings that beat estimates on Thursday night and the news helped propel JOYG to a 3.1% gain on Friday. The stock has established old resistance near $72.00 as new support so more conservative traders may want to raise their stops. JOYG really looks poised to hit new highs this week. Our target is the $79.50-80.00 range. The P&F chart is already bullish with an $88 target.
Picked on April 16 at $ 72.55 *triggered
Nucor - NUE - close: 75.73 change: +2.28 stop: 69.75 *new*
Traders bought the dip in NUE on Friday and the rally began to pick up steam heading into the closing bell. NUE looks ready to breakout over short-term resistance near $75.00 soon. We are adjusting our stop loss to $69.75. More conservative traders may want to consider a stop closer to $72.00 instead. Our initial target is the $79.50-80.00 range. Our second, more aggressive target is the $84.00-85.00 zone. The Point & Figure chart is bullish with a $93 target.
BUY CALL JUN 70.00 NUE-FN open interest= 31 current ask $8.60
BUY CALL JUL 75.00 NUE-GO open interest=2592 current ask $6.70
Picked on April 22 at $ 74.63
Public Storage - PSA - cls: 96.79 change: -0.33 stop: 91.95
PSA managed to hit another new relative high at $98.01 on Friday morning but succumbed to profit taking. The stock delivered a strong week and still looks poised to move higher although readers might get another chance to buy a dip near $95 and its 10-dma soon. Our target is the $99.50-100.00 range. We do not want to hold over the early May (unconfirmed) earnings report. Note: the May earnings report is still a mystery. One source is suggesting PSA reports on May 1st while another is suggesting the company reports in the May 5th-10th range. If we don't see something soon to confirm an announcement date we may end up closing the play early just to be safe.
Picked on April 22 at $ 94.10
United States Oil - USO - cls: 95.66 chg: +2.46 stop: 96.55
The USO has completely erased Thursday's losses. Jim has already discussed what happened to crude oil in the market wrap this weekend. Briefly the combination of XOM reporting a shut in of 200,000 barrels of oil in Nigeria and news that BP would have to shut down their North Sea pipeline and 700,000 barrels of oil due to a strike at a Scotland refinery and news of a U.S.-affiliated boat firing shots at Iranian vessels all pushed crude oil back to its highs. The USO traded to $96.28 on Friday. Our stop loss isn't very far away at $96.55. While we still think oil is near a short-term top we could get stopped out on Monday. Our first target is the $88.50-88.00 zone.
Picked on April 21 at $ 94.38
(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.)
Goldman Sachs - GS - cls: 192.00 chg: +3.56 stop: n/a
After spending days hovering around the $180 level GS finally broke out higher. The stock is soaring and pushing past resistance levels pretty quickly. We only have three weeks left for May options so we need to see GS continue this strength. We're not suggesting new strangle positions. The options we suggested for this strangle were the May $190 calls (GPY-ER) and the May $160 puts (GPY-QL). Our estimated cost was $8.70. We want to sell if either option trades at $14.50 or higher.
Picked on April 06 at $175.40
Merrill Lynch - MER - cls: 49.64 chg: +1.55 stop: n/a
MER is still in rally mode and shares are pushing against resistance near $50.00. A breakout here would be very bullish. We're not suggesting new strangle positions at this time. The options we listed in the May strangle were the May $50 calls (MER-EJ) and the May $32.50 puts (MER-QA). Our estimated cost was $1.76 and we want to sell if either option hits $3.00 or more.
Picked on April 15 at $ 43.34
Research In Motion - RIMM - cls: 120.04 chg: -3.62 stop: 118.40
Our brand new play in RIMM didn't last very long. Shares pulled back and hit our suggested entry point in the $120.50-120.00 zone and then just kept right on falling. News that RIMM would delay its launch of the 3G BlackBerry model named "Meteor" sent the stock lower. RIMM slipped to an intraday low of $117.12 before paring is losses. Our suggested stop loss was $118.40 so the play was "opened" and "closed" in less than two hours.
Picked on April 25 at $120.50 *triggered/stopped same day
Ambac Fincl. - ABK - cls: 3.86 change: +0.10 stop: 6.05
Piper Jaffray downgraded shares of ABK before the opening bell on Friday but it failed to have much impact. Now that the earnings are out there isn't much left on the table as far as negative catalyst. The ratings agencies could still come out and downgrade ABK's credit ratings or the company could declare some sort of bankruptcy or a new pressing need for more capital. Unfortunately, we only have there weeks left on May options. We're dropping ABK from the newsletter. We've been suggesting that readers exit at these recent lows. It's up to you if you want to try and milk a couple of more points out of this stock.
Picked on January 27 at $ 11.54
Capital One - COF - close: 50.91 chg: +2.46 stop: 50.26
The financials have shown a lot of strength this past week. The better than expected earnings report from rival American Express (AXP) was too much for the bears. COF rallied more than 5% on Friday on top of Thursday's 5% gain. Shares hit our stop loss at $50.26 closing the play. The AXP news may have lessened fears regarding COF's exposure to bad consumer debt.
Picked on April 13 at $ 48.30 /stopped out 50.26
Fannie Mae - FNM - close: 30.93 chg: +2.90 stop: 30.26
It looks like the shorts got squeezed on Friday. FNM gapped open higher at $28.47 and when the market started moving higher Friday afternoon FNM soared past the $30.00 level, nailing our stop loss at $30.26. At the end of the day FNM was up more than 10%. Friday's move marks a breakout over its short-term trendline of lower highs. FNM had already hit our first target at $25.25 a couple of weeks ago. We had been expecting more follow through to the downside but the financials seem impervious to bad news these days.
Picked on April 08 at $ 29.00 /1st target exceeded 25.25
Sears Holding - SHLD - close: 99.75 chg: +2.75 stop: 101.55
I am suggesting that readers hit the emergency eject button on our SHLD put play. The market has just been too strong and the retailers have been showing a lot of relative strength. SHLD has been under performing the market and its peers but it looks like the stock is poised to rally higher next week. The $100.00 level could hold as overhead resistance but we'd rather just cut our losses now and move on.
Picked on April 21 at $ 97.48 /exiting early 99.75