Aracruz Celulose - ARA - cls: 79.94 chg: -0.66 stop: 75.49 *new*
After yesterday's big rebound we're not surprised to see some profit taking today. ARA dipped toward $78 before traders stepped in buy it. The afternoon bounce today looks like a new entry point to buy calls. We're adjusting the stop loss to $75.49, just under Tuesday's low. More conservative traders might want to use a tighter stop. We have two targets. Our first target is the $84.50-85.00 range. Our second target is the $88.50-90.00 zone. As expected the rally over $80.00 did produce a new P&F chart buy signal, which currently points to a $94 target.
Picked on April 28 at $ 80.25 *triggered
Alliant Tech - ATK - close: 113.29 chg: +3.31 stop: 109.45 *new*
Defense stocks were strong and ATK helped lead the group with a 3% rally. Shares broke out from its sideways consolidation near $110. The stock has already surpassed our target at the $110 area and we suggest readers start taking profits now! Our second, more aggressive target is the $114.00-115.00 zone. ATK hit $113.52 this afternoon. We are adjusting our stop loss to $109.45. We do not want to hold over the May 8th earnings report.
Picked on April 21 at $106.00 /1st target hit $109.90
Cytec Ind. - CYT - close: 59.26 change: +0.25 stop: 57.95
CYT slipped lower this morning but traders bought the dip right at the $58.00 mark. This actually looks like a potential entry point for bullish positions but CYT still has a short-term pattern of lower highs. We have to label this a more aggressive play because the spreads on the options are pretty wide. There isn't much we as traders can do about that except try to minimize its impact with good entry and exit strategy. We're listing two targets. Our first target is the $64.75-65.00 range. Our second target is the $68.00-70.00 zone.
Picked on April 27 at $ 60.64
HSBC - HBC - close: 87.55 change: +0.76 stop: 83.90
Perfect! HBC gapped lower but traders bought the dip near $86.00, which is enough to "fill the gap" from Wednesday morning. Today's rebound looks like another entry point for bullish positions. We have two targets. Our short-term target is the $89.75-90.00 range. Our more aggressive, longer-term target is the $94.00-95.00 zone. The P&F chart is bullish with a $113 target.
Picked on April 28 at $ 86.19 *triggered/gap higher
Hovnanian - HOV - close: 11.85 chg: +0.03 stop: 10.74
The homebuilding sector out performed the market today. The HGX index rallied almost 2.6% and the DJUSHB index added 4.7%. Shares of HOV under performed its peers after UBS downgraded the stock to a "sell". Yet investors bought the dip in HOV near its trendline of higher lows. This bounce looks like another entry point to buy calls. We have two targets. Our first 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. Don't forget that we do not want to hold over the late May earnings report.
Picked on April 16 at $ 11.86
Intl.Bus.Mach. - IBM - cls: 123.61 chg: +2.91 stop: 118.49
Strength in tech stocks helped pull IBM to a 2.3% gain. Shares hit our trigger to buy calls yesterday so we're not complaining. We 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 30 at $120.75 *triggered
iShares Russ.2000 - IWM - cls: 72.75 chg: +1.35 stop: 69.49
The Russell 2000 small cap index followed the rest of the market higher. The IWM added 1.8% and set its highest close in weeks. Our four to six-week target is the $77.50-80.00 zone. The P&F chart is bullish with an $87 target.
Picked on April 28 at $ 72.55 *triggered
iShares DJ Transports - IYT - cls: 95.49 chg: +3.13 stop: 89.95*new*
Target exceeded. A drop in crude oil combined with a widespread market rally helped the transports rally to new relative highs. The IYT added over 3.3% and closed above potential round-number resistance at $95.00. Our first target was the $94.85-95.00 range. We're adjusting the stop loss to $89.95. Our eight-week target is the $98.00-100.00 zone.
Picked on April 27 at $ 91.48 /1st target exceeded
Joy Global - JOYG - close: 74.04 chg: -0.21 stop: 69.95
Some of the short-term technical indicators for JOYG are still weakening. The stock may have been influenced by a sell-off in gold today. Traders did end up buying the dip. More conservative traders might want to place their stop under today's low near $71.50. 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: 73.82 change: -1.68 stop: 69.75
The strength in shares of NUE is starting to show some cracks. The stock was very weak early on but eventually bounced. Yet the bounce wasn't very convincing and NUE still closed with a 2.2% loss. It's possible that the strength in the dollar, which is weighing on commodities and commodity stocks, is being applied to the steel companies like NUE. More conservative traders might want to place their stop loss under today's low at $71.68. We're not suggesting new positions at this time. 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.
Picked on April 22 at $ 74.63
Textron - TXT - cls: 61.73 change: +0.72 stop: 59.85 *new*
TXT continues to rebound from its bullish pattern of higher lows. Today's bounce looks like another entry point to buy calls but readers might want to consider waiting for a rise past the $62.00 or $62.35 level. We are raising our stop loss to $59.85. Our short-term target is the $64.85-65.00 zone. Our secondary, more aggressive target is the $68.00-70.00 range. The Point & Figure chart is bullish with an $83 target.
Picked on April 27 at $ 61.39
United States Oil - USO - cls: 90.38 chg: -2.12 stop: 94.65*new*
Almost! Crude oil continues to sell off and the USO dipped to an intraday low of $88.89. Our target is the $88.50-88.00 zone. More conservative traders may want to start taking profits right now! We're adjusting our stop loss to $94.65. We're not suggesting new bearish positions at this time.
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: 199.05 chg: +7.68 stop: n/a
It was a big day for our strangle on GS. The stock rebounded from the $190 level and soared past technical resistance at its 200-dma. The May $190 calls effectively doubled in value and are trading near $11.25. If GS can push past potential round-number resistance at $200 we should be home free. We're not suggesting new strangle positions at this time. 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. Since we have about two weeks left more aggressive traders may want to try and let it ride and see how far GS can go before expiration. We're not suggesting this strategy but it's something to consider.
Picked on April 06 at $175.40
Merrill Lynch - MER - cls: 52.39 chg: +2.56 stop: n/a
Target achieved. MER also rallied strongly on Thursday with a 5.1% gain as it broke through its 100-dma near $50.00. The call side of our strangle, the May $50.00s (MER-EJ) hit an intraday high of $3.45. 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 wanted to sell if either option hits $3.00 or more.
Picked on April 15 at $ 43.34 /target achieved