Peabody Energy - BTU - close: 78.69 change: -0.08 stop: 74.90*new*
It appears that oil stocks were the only "safe" place to be on Wednesday but some of the coal producers fared well. BTU displayed some relative strength with only a minor loss. Rivals JRCC and MEE both surged to another new high. The intraday trading action in BTU is bearish and we would expect a dip toward the $76-75 zone. We are raising our stop loss to $74.90. We're not suggesting new bullish positions at this time. BTU has exceeded our first target near $80 multiple times. Our second target is the $84.00-85.00 zone.
Picked on June 01 at $ 73.92 /1st target exceeded 79.75
Emerging Markets 50 ADR - ADRE - cls: 51.47 chg: -0.82 stop: 55.51*new*
The ADRE continues to slide. It lost 1.6% and is now testing its exponential 200-dma after breaking below its 100 and 200-dma. This ETF does look short-term oversold so readers may want to start taking profits now. The intraday low was $51.40 and our target is the $51.00-50.00 zone. We're adjusting our stop loss to $55.51.
Picked on June 03 at $ 54.69
Caterpillar - CAT - close: 78.93 change: -1.17 stop: 83.05 *new*
Widespread market weakness finally pushed CAT over the edge. Shares hit our one of our triggers to buy puts at $79.45. The play is now open. We are adjusting the stop loss to $83.01. More conservative traders may want to use a tighter stop loss. Our target is the $75.25 mark. The stock "should" see some technical support at its 200-dma near $75.00. FYI: In the news today CAT announced it was raising its quarterly dividend 17% to 42-cents.
Picked on June 11 at $ 79.45 *triggered
DaVita Inc. - DVA - close: 49.59 chg: -0.10 stop: 53.01
In spite of all the market fireworks today we don't see any changes from our comments on DVA. More aggressive traders may want to open positions now. We are going to stick to our plan and wait for a bounce. Our suggested entry point to buy puts is the $51.00-52.00 zone. If triggered we have two targets. Our first target is 47.75-47.50. Our second target is the $45.15-45.00 zone. The P&F chart is bearish with a $45 target. FYI: Last month DVA announced a $250 million stock buy back program. At $50 a share that's about 5 million shares. DVA has about 104 million shares outstanding.
Picked on June xx at $ xx.xx <-- see TRIGGER
Electronic Arts - ERTS - close: 46.07 chg: -0.09 stop: 49.05*new*
ERTS hit another relative low today at $45.60. The intraday action on ERTS continues to look bearish. However, the stock's daily chart has produced a "doji" candlestick, which suggests indecision. ERTS only lost 9 cents with the market down sharply. I suspect the stock may be ready for an oversold bounce. Readers can watch for a failed rally near $48.00 as a new bearish entry point. We're adjusting the stop loss to $49.05. Our target is the February lows near $44.50-44.00.
Picked on June 06 at $ 47.75 *triggered
3M Co. - MMM - close: 75.27 chg: -0.73 stop: 77.65
As expected the bounce in MMM is rolling over. However, the stock is still trading above support near $75.00. Readers can wait for a new relative low under $74.85 as a new entry point. We have two targets. Our first target is the $70.25-70.00 zone. Our secondary target is the $67.00-65.00 range. The P&F chart is bearish with a $69 target. FYI: If you are aiming for the $67 target then you might want to consider the October puts.
Picked on June 06 at $ 74.95 *triggered
(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.)
Amgen Inc. - AMGN - close: 42.95 chg: -0.87 stop: n/a
The pull back in AMGN has put our June strangle in serious jeopardy. We have less than two weeks left for June strikes before they expire and the erosion is going to pick up speed. We are not suggesting new positions at this time. We have suggested a July strangle and a more aggressive June strangle. The options in the July strangle are the July $45 calls (AMQ-GI) and the July $40 puts (AMQ-SH). Our estimated cost for the July strangle was $1.65. We want to sell if either option hits $3.50. The options in the June strangle are the June $45.00 calls (AMQ-FI) and the June $40.00 puts (AMQ-RH). Our estimated cost on the June strangle was $0.56. We want to sell if either option hits $1.10 or more.
Picked on May 22 at $ 42.77
McDonald's - MCD - close: 58.75 chg: -1.02 stop: n/a
MCD reversed 1.7% amidst the market turmoil. Right now our June strangle isn't looking so great. Now that the time premium has eroded we're going to need to see MCD under $56.50 or above $63.50 if we are going to have a chance at seeing a profit on this play. We've got less than two weeks left before June options expire. We are not suggesting new positions. The options we suggested were the June $62.50 calls (MCD-FZ) and the June $57.50 puts (MCD-RY). Our estimated cost was $1.10. We want to sell if either option hits $1.65 or higher.
Picked on May 18 at $ 60.53
Tyco Intl. - TYC - close: 42.91 change: -0.63 stop: n/a
So far so good. TYC lost another 1.4% but hasn't quite let go of the technical support at the 100-dma yet. We are not suggesting new strangle positions in TYC at this time. The options we suggested were the July $47.50 calls (TYC-GW) and the July $42.50 puts (TYC-SV). Our estimated cost was $1.30. We want to sell if either option hits $1.95 (50% gain).
Picked on June 03 at $ 44.89
Terex Corp. - TEX - close: 63.11 change: -2.93 stop: 72.05
We were correct on picking the decline in TEX but we missed the entry point. Instead of buying the immediate breakdown we wanted to try and buy a bounce instead. Our plan was to buy puts on a bounce at $69.00. Our first target was $65.25 and our second target was $61.50. We are dropping TEX as a bearish candidate at this time. We would keep an eye on it for a failed rally under support in the next month.
Picked on June xx at $ xx.xx <-- see TRIGGER