Aracruz Celulose - ARA - cls: 81.06 chg: -2.98 stop: 78.75
Ouch! ARA experienced a reversal today. Yesterday the stock hit our first target at $84.50. Today shares gave back over 3.2% and painting an ominous red candle on the daily chart. Look for a bounce near $80.00 as a potential entry point for new bullish positions. More conservative traders might want to tighten stops even further toward the $80.00 mark. 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 *1st target hit $84.50
CNOOC - CEO - close: 176.38 change: -7.09 stop: 172.49
It was a volatile day for shares of CEO. Yesterday the stock added more than $8 and broke out from a triangle consolidation pattern. Today CEO gave back 4.2% and closed back under the $180 level and its 10-dma. This is definitely a short-term bearish reversal and cools a lot of our enthusiasm for buying calls. However, the larger pattern and its bullish buy signal on the P&F chart remains intact (for now). The $175 level should be some support so we would consider new positions now although more conservative traders may want to wait for a new rise over $180 again before initiating positions. Our target is the $199.00-200.00 range. FYI: We have to label this a more aggressive play because the option spreads are so wide!
Picked on May 06 at $183.47
CF Ind. - CF - close: 135.83 chg: -2.98 stop: 126.45
No stranger to volatility, shares of CF came close to a $7 trading range. The fertilizer stocks were mostly higher this morning with CF rallying through the $140 level. Unfortunately when the market turned south so did shares of CF. The stock lost 2.2% We would look for a dip or a bounce in the $135.00-134.00 zone as a new bullish entry point. We are using a wide (aggressive, high-risk) stop loss under last Thursday's low. You may want to use a much tighter stop loss but remember this can be a very volatile group. Our target is the $155.00-160.00 range.
Picked on May 05 at $137.50 *triggered
Cytec Ind. - CYT - close: 60.51 change: -0.21 stop: 57.95
A pull back toward $60.00 could be used as a new bullish entry point and CYT might tag $60 again tomorrow. Shares hit $60.24 this afternoon. 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
Deere & Co. - DE - close: 84.97 change: -1.11 stop: 82.75
DE surged higher this morning hitting $87.39 before giving back all of its gains to settle with a 1.2% loss. We would use a dip or a bounce in the $84-83 zone as a new entry point for calls. We have two targets. Our first target is the $89.95-90.00 zone. Our second, more aggressive target is the $94.00-95.00 range. Our biggest challenge is time. DE is due to report earnings on May 14th before the market open. That only gives us a few trading days.
Picked on May 06 at $ 86.08
Fortune Brands - FO - close: 68.80 change: -0.68 stop: 67.95
Our new bullish play in FO is open but we're not off to a great start. Shares rallied higher, over resistance at the $70.00 level, and hit $70.14 before reversing course and closing with a 0.9% loss. We were suggesting that readers buy calls on a breakout over $70.00 at the $70.05 mark. FO "should" have support at the bottom of its recent trading range near $68.00. The 100-dma near $68.55 and the 50-dma near $68.25 also offer potential support. If FO provides a dip or bounce near $68.00 we would take it as a new bullish entry point to buy calls. Otherwise wait for a new relative high over $70.15. Our target is the $74.00-75.00 range. The 200-dma is technical resistance near $75.00. The P&F chart is bullish with a $95 target.
Picked on May 07 at $ 70.05 *triggered
Gilead Sciences - GILD - close: 53.23 chg: -0.91 stop: 49.99
Biotech stock GILD failed to escape the market-wide profit taking on Wednesday. We were suggesting readers buy dips in the $53.00-52.00 zone and GILD hit $53.16 this afternoon. Our only concern is that today's session has painted a bearish engulfing candlestick pattern, which is normally seen as a one-day reversal pattern. Wait for signs of a bounce before initiating new positions. Our target is the $57.50-60.00 range. Don't forget that any time we play a biotech company it should be considered an aggressive, higher-risk trade. There is always risk of some FDA decision or clinical trial result surprising the market and sending the stock gapping one direction or the other.
Picked on May 04 at $ 53.63
HSBC - HBC - close: 85.61 change: -1.65 stop: 84.90
Banking stocks were leading the market lower. The BIX and BKX banking sector indices lost 3.9% and 3.5% respectively. HBC slipped 1.9% toward its 200-dma. We would look for the $85 level to offer short-term support and another entry point to buy calls. 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
Harsco - HSC - close: 60.87 change: -1.59 stop: 59.45 *new*
HSC also suffered some profit taking with a 2.5% decline albeit on very light volume. The stock did produce a bearish engulfing candlestick pattern and this is starting to look like a bearish double-top pattern with the May and April peaks. We are turning defensive here. The $60 level should be support so we're raising our stop loss to $59.45. Our four-week target is the $64.50-65.00 range.
Picked on May 01 at $ 60.38
Intl.Bus.Mach. - IBM - cls: 124.14 chg: +1.82 stop: 119.75 *new*
Target achieved. IBM displayed relative strength most of the session. The early morning rally sent IBM to $124.98. Our target was the $124.90-125.00 range. $125 is resistance at the top of its trading range. We're upping our stop loss to $119.75. We're not suggesting new positions at this time. Wait for another dip near $121 or a breakout over $125. Our second target is the $128.00-130.00 zone.
Picked on April 30 at $120.75 */1st target achieved 124.90
iShares Russ.2000 - IWM - cls: 71.56 chg: -1.30 stop: 69.85 *new*
The small caps were no exception to the market weakness. The IWM lost 1.7% and produced a bearish engulfing candlestick, which was a common pattern today. A bounce near $71.00 could be used as a new entry point for calls. We're raising our stop loss to $69.85. 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: 93.11 chg: -2.94 stop: 91.48
Warning - bearish reversal alert. It was a rough day for the transports. The Transportation index and the IYT lost 3%. Furthermore the IYT has produced a mini (bearish) double top with the recent peaks and today's session ended with a bearish engulfing candlestick pattern. More conservative traders will want to strongly consider an early exit right here! We expect a dip back toward $92.00. Our eight-week target is the $98.00-100.00 zone. IYT has already surpassed our first target in the $94.85-95.00 zone.
Picked on April 27 at $ 91.48 /1st target exceeded
Joy Global - JOYG - close: 75.67 chg: -3.41 stop: 74.45
Ouch! JOYG plunged 4.3% today and took a massive bite out of our unrealized gains. The stock hit an intraday high of $79.25 yesterday and $79.20 today. Our target has been the $79.50-80.00 range. If there is any serious follow through on today's market weakness then JOYG will probably hit our stop loss at $74.45 tomorrow. We're not suggesting new positions. We do have a secondary, more aggressive target in the $84.00-85.00 range. 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
Mosaic - MOS - close: 124.65 change: -2.83 stop: 115.49
Early morning strength in MOS failed at the $130 level. The stock, like most of the fertilizer group, ended lower due to the market-wide sell-off. Shares of MOS look poised to test the $120 region soon. Wait for signs of a bounce before considering new call positions. Our first target is the $138.00-140.00 range. We are playing with a very wide, aggressive stop loss at $115.49, just under Thursday's low. You may want to use a tighter stop closer to $120.
Picked on May 05 at $126.75 *triggered/gap higher entry
Arcelor Mittal - MT - close: 92.14 chg: -2.15 stop: 87.99
MT is another casualty of the market's weakness. MT lost 2.2% and looks like it could dip toward $91.00, which would be enough to "fill the gap" from Tuesday morning. We would use a dip in the $91-90 zone as a new entry point to buy calls. Our target is the $99.00-100.00 zone. The P&F chart is very bullish with a $116 target. Don't forget that we want to exit ahead of the earnings announcement (still unconfirmed but sometime this month).
Picked on May 05 at $ 90.25 *triggered
Nucor - NUE - close: 78.57 change: -0.44 stop: 73.99
Target exceeded. NUE rallied to a new all-time high at $80.36. Our first target has been the $79.50-80.00 range. NUE eventually pared its gains and we wouldn't be surprised to see a dip back toward $76. Our second, more aggressive target is the $84.00-85.00 zone. The Point & Figure chart is bullish with a $93 target. FYI: For those of you with the May $80 calls (NUE-EP) I hope you took some profits today. The NUE-EP hit $2.20. May options expire a week from Friday.
Picked on April 22 at $ 74.63 /1st target exceeded 79.50
POSCO - PKX - close: 123.09 change: -5.16 stop: 119.75
Today's 4% decline and PKX's drop back under the $125.00 level, which should have been support, is definitely a warning sign for the bulls. The $120 level is probably stronger support. We would use a bounce near $120 or a new rally over $125 as entry points to buy calls again. Our target is the $139.00-140.00 range. We should expect to see some overhead resistance at the 100-dma and exponential 200-dma near $130-133. NOTE: We would consider this a slightly more aggressive play for two reasons. First, PKX is prone to gap openings as the U.S. traded shares adjust to trading overseas the night before. Second, the spreads on the options are pretty wide and that immediately puts us, as option traders, at a disadvantage.
Picked on May 05 at $125.55 *triggered
Home Depot - HD - close: 28.56 chg: -0.72 stop: 28.69
Our timing on HD did not pan out very well. We decided to alter our strategy and suggest calls on yesterday's bounce from tested support at the 30-dma. The bounce failed and shares of HD lost 2.4%. The MACD has produced a new sell signal and HD hit our stop loss at $28.69 closing the play. We would keep an eye on HD. The $28.00 level might offer additional support.
Picked on May 06 at $ 29.28 */stopped out 28.69
Hovnanian - HOV - close: 11.13 chg: -0.74 stop: 10.74
Abandon ship! HOV announced they were raising capital by trying to sell another 14 million shares of stock in a secondary offering. HOV currently has about 62.5 million shares outstanding. Another 14 million shares is a 22% increase. I'm surprised that shares of HOV did not plunge further. The stock closed with a 6.2% loss. We're suggesting readers exit immediately.
Picked on April 16 at $ 11.86
Textron - TXT - cls: 60.88 change: -1.14 stop: 59.85
Warning! TXT has produced a bearish breakdown with today's 1.8% loss. Today's session has also produced a bearish engulfing candlestick pattern. Plus, we see a new bearish signal on the MACD. What really concerns us is that TXT has broken its multi-week trendline of higher lows. While we are dropping TXT today we would keep an eye on it for a bounce near $58.50 or a new rally over $62.50 either of which might be bullish entry points.
Picked on April 27 at $ 61.39