Aracruz Celulose - ARA - cls: 80.65 chg: +0.71 stop: 75.49
The Brazilian Bovespa market rallied another 2% to yet another new high. ARA spiked to a new high this morning but gave back most of its gains to end Friday up 0.8%. The trend is still up but more conservative traders may want to tighten their stops. 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
Cytec Ind. - CYT - close: 59.08 change: -0.18 stop: 57.95
We would give serious thought to cutting our losses in CYT right here. The stock has been under performing the market the last few days. The "tone" of its trading changed on the April 29th decline. Shares did bounce near $58.00 as expected. At this time we would not consider new bullish positions until CYT traded above $60.00 or $61.00 depending on your risk tolerance. The MACD on the daily chart appears to have produced a new sell signal. 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: 87.67 change: +0.12 stop: 84.90 *new*
International bank HBC continues to rally after breaking out from its sideways consolidation. We remain bullish on it here. If the stock does dip then look for an entry point in the $86.50-86.00 zone. We're adjusting our stop loss to $84.90. 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
Home Depot - HD - close: 30.12 chg: +0.25 stop: 28.99
HD tried to rally again but was rebuffed at the $30.50 level and its 200-dma. The overall trend still looks like HD has bottomed and is moving higher. We would expect shares to breakout higher next week. If they do not then more nimble and aggressive traders might want to consider buying a dip near $29.00. Our suggested entry point to buy calls is the $30.55 mark. If triggered our target is the $34.00-35.00 range. We do not want to hold over the May 20th earnings report.
BUY CALL JUN 30.00 HD-FF open interest=12762 current ask $1.50
Picked on May xx at $ xx.xx <-- see TRIGGER
Hovnanian - HOV - close: 11.85 chg: +0.03 stop: 10.74
The homebuilders are still languishing sideways. The DJUSHB index, the XHB, and shares of HOV all look similar. On a positive note they all have a bullish trend of higher lows. The path of least resistance seems to be up but the group just doesn't have any gas to get there. Buying dips in HOV in the $11.30-11.00 zone might work but more conservative traders may want to keep inching up their stops (potentially toward the $11.00 level). On the other hand you could just wait for a breakout over what looks like resistance near $12.50. The consolidation in HOV appears to be coming to a point so a breakout is almost imminent. 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
Harsco - HSC - close: 60.55 change: +0.17 stop: 57.99
Friday's action was a mirror of Thursday's. HSC was up in the morning, drift down midday and then rebound higher into the closing bell. We don't see any changes from our previous comments. We'd still consider new bullish positions here. Our four-week target is the $64.50-65.00 range.
BUY CALL JUN 60.00 HSC-FL open interest= 43 current ask $3.70
BUY CALL JUL 60.00 HSC-GL open interest=121 current ask $4.60
Picked on May 01 at $ 60.38
Intl.Bus.Mach. - IBM - cls: 123.18 chg: -0.43 stop: 118.49
We remain bullish on IBM following the mid April breakout over resistance at $120. The stock hit our trigger this past week in the $120.75-120.00 zone. We suspect that readers will get another chance to buy a dip near $121.00 soon. More conservative traders might want to cinch up their stops toward $120, which should be new support. 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
ImClone Sys. - IMCL - close: 47.06 change: -1.01 stop: 45.85
Biotech stocks were mostly lower on Friday. Shares of IMCL slipped toward $46.75 before bouncing. We remain bullish here and would use the dip as a new entry point to buy calls. Overall we don't see any changes from our Thursday night comments. We are trying to use a tight stop at $45.85. We have two targets. Our first target is the $54.00 level. Our second target is the $58.00 level. Please note that any time we play a biotech company it is considered an aggressive, higher-risk play. You never know when an FDA decision or some clinical trial result might come out for this company or one of its rivals and send the stock gapping one direction or the other at which point our stop loss might become worthless.
BUY CALL JUN 45.00 QCI-FI open interest= 1224 current ask $4.90
Picked on May 01 at $ 48.07
iShares Russ.2000 - IWM - cls: 72.52 chg: -0.23 stop: 69.49
The Friday morning rally in the small cap stocks faded but traders seemed to be buying the dip by the afternoon. The IWM spiked toward potential overhead resistance at its exponential 200-dma. We remain bullish on the IWM but it's up to the trader to choose new entries here or wait for a potential dip near $71.50 and jump in then. 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: 94.87 chg: -0.62 stop: 89.95
The IYT just turned in a very impressive week. The stock has surpassed our first target in the $94.85-95.00 range. The intraday high on Friday was $96.46. While we remain bullish on the IYT we are not suggesting new positions at this time. The transports are actually up six out of the last seven weeks. Keep an eye on crude oil, which will continue to impact the transports, although honestly the group has been ignoring oil's strength this past month. 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: 76.97 chg: +2.93 stop: 69.95
Shares of JOYG soared on Friday. The stock gapped open at $75.08 and rallied toward the top of its current trading range in the $72.00-77.50 zone. The intraday high was actually $77.61. We remain very bullish on JOYG but we would not launch new positions at this time. We strongly suggest readers consider adjusting their stop loss toward Thursday's low (around $71.50). Our target is the $79.50-80.00 range. We are going to add a secondary target in the $84.00-85.00 zone. However, we will plan to exit ahead of the late May earnings report. The P&F chart is already bullish with an $88 target.
Picked on April 16 at $ 72.55 *triggered
Nucor - NUE - close: 74.30 change: +0.48 stop: 69.75
Many of the steel-related stocks suffered some profit taking this past week. NUE might be done digesting its previous gains and ready for another leg higher. We would still consider new positions here but traders could try and pick off an entry near $72.00 or a new move over $75.50 depending on your style. More conservative traders might want to place their stop loss under Thursday's low at $71.68. 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: 62.00 change: +0.27 stop: 59.85
Shares of TXT continue to inch higher and really look poised to burst from its three-week consolidation pattern. We are still suggesting new positions right here but more conservative traders could wait for a new relative high over $62.50. 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. FYI: TXT is due to present at an investor conference on May 8th.
Picked on April 27 at $ 61.39
United States Oil - USO - cls: 93.40 chg: +3.02 stop: 94.65
The USO completely erased Thursday's losses with a 3.3% bounce on Friday. Part of the challenge was news of Turkish planes bombing Kurdish rebels in northern Iraq. That sent crude oil futures higher. The rally in the USO failed to breakout past short-term resistance at its 10-dma. However it wouldn't take much for the USO to spike higher and hit our stop loss. We're not suggesting new positions at this time. Our target is the $88.50-88.00 zone. FYI: The intraday low last week was $88.89.
Picked on April 21 at $ 94.38
Alliant Tech - ATK - close: 113.69 chg: +0.40 stop: 109.45
Target achieved. ATK continued to rally and hit $114.29 on Friday morning. Shares have already surpassed our early target at $110 and Friday hit our second target in the $114.00-115.00 zone. We would keep an eye on ATK for a pull back toward what should be support in the $110 region.
Picked on April 21 at $106.00 /2nd target hit $114.00
Goldman Sachs - GS - cls: 200.27 chg: +1.22 stop: n/a
Target achieved. Shares of GS have turned in an exceptional rally over the past three weeks with a $41 bounce from its lows near $161. This past week shares broke through resistance at its 200-dma and on Friday GS broke through round-number, psychological resistance at $200. The stock hit $203.39 o Friday morning and that was enough to push the May $190 calls to $14.50. Our target happened to be $14.50 for this strangle. Our estimated cost was $8.70. While the play is closed for us we suspect that GS will continue to trade higher and thus more aggressive traders, who choose to let this run, could build on these gains. GS' strength is also its biggest risk if you choose not to exit. Nothing goes up in a straight line for very long and GS is up 25% in the last three weeks. Plus May options expire in two weeks. Any profit taking or correction in this stock could easily kill the options premiums.
Picked on April 06 at $175.40