CNOOC Ltd. - CEO - close: 174.91 chg: +3.55 stop: 164.95
Don't be fooled by CEO's 2% gain. The stock was trading lower all day long following its gap higher this morning. Shares opened at $178.65 and hit $180.76 before reversing. We would look for a dip back into the $172.50-171.00 zone as the next potential entry point and more conservative traders are going to want to wait for a bounce before initiating positions. Remember, trading CEO tends to be a higher-risk play. The stock is traded as an ADR on the NYSE and shares gap open, up or down, almost every morning as it adjusts to trading back home in China. This is also a higher risk play because the spreads on the options can be abnormally wide and that immediately puts us at a disadvantage. If you can handle the volatility this might be a play. We have multiple targets. Our first target is $179.50. Our second target is $184.50. Finally, our very aggressive target is $195.00. If you are aiming for $195 we suggest you use the August calls. FYI: The Point & Figure chart has reversed into a new bullish signal with a $204 target. Please tonight's play editor's note on strategy.
Picked on July 01 at $171.36
Deere & Co. - DE - close: 70.25 change: -3.17 stop: 69.95
Man the lifeboats! DE could be poised to crack down under support at the $70.00 level. Shares hit the $74 region this morning and reversed sharply. Today's move has painted a big, bearish engulfing candlestick pattern. Wait for a bounce over $71.55 before considering new bullish positions. If the market shows any weakness tomorrow we would expect DE to hit our stop loss. Our target is the $77.50-78.00 zone.
Picked on July 01 at $ 73.42
DIAMONDS - DIA - close: 112.15 change: -1.62 stop: 111.69
The lack of follow through on yesterday's rebound is very negative. It's going to have an impact on investor sentiment, which was already bearish. More conservative traders may want to tighten their stop losses closer to $112.00. Wait for a new rise over $113.50 before considering new bullish positions. Our target is the $118.00-119.00 range (11,800-11,900 on the DJIA).
Picked on July 01 at $113.77
Murphy Oil - MUR - close: 95.13 chg: -5.80 stop: 93.95
Ouch! MUR was another target for the "sell the winners" crowd today. The stock hit another high this morning and then just dropped into free fall this afternoon posting a 5.75% loss. We would expect a test of potential support near $94.00 soon. We're not suggesting new positions at this time. More conservative traders may want to exit immediately. MUR has already exceeded our first target near $100. Our second target is $104.85. The P&F chart is bullish and the upside target is $121.
Picked on June 29 at $ 96.26 /1st target exceeded 99.95
CBOE Volatility Index - VIX - close: 25.92 chg: +2.27 stop:
Investor fear definitely rose today. The lack of a market bounce following yesterday's test of support and then this afternoon's sudden acceleration lower does not bode well for the market. The VIX bounced from its 200-dma and painted a huge, bullish engulfing candlestick. The VIX index rose almost 9.6%. Now that the market's bounce from its March lows is struggling suddenly the odds of a capitulation sell-off event have risen. We were suggesting the July or August calls with a preference for the August 30s. We were suggesting two targets. One target is $29.50 and a second one at $34.00.
Picked on June 30 at $ 23.95
S&P SPDRs - SPY - close: 126.18 chg: -2.20 stop: 125.85
The S&P 500 index failed to see any follow through on yesterday's test of what should have been support. Today's session has painted a bearish reversal candlestick and the SPY is back to testing its lows. It won't take much for the SPY to hit our stop loss at $125.85 tomorrow. Tonight's earnings warning out of NVDA doesn't do the bulls any favors. If by some miracle we don't get stopped out then wait for a new move over $127.50 or $128.00 before considering new bullish positions. Our target is the $132.25-132.50 range.
Picked on July 01 at $128.28
Wynn Resorts - WYNN - close: 79.26 chg: -2.84 stop: 76.95
It's very possible that we're just wrong and that WYNN is not going to find any support in the $79-80 zone. Shares rallied to $85.14 before reversing under its 10-dma and eventually losing 3.4%. The trend remains very negative. We are not suggesting new positions and more conservative traders are going to want to consider an early exit immediately. Our target is $89.00.
Picked on June 30 at $ 82.10 *new play
(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.)
Alpha Nat. Res. - ANR - close: 87.62 chg: -16.69 stop: n/a
Wow! We knew ANR was volatile but it's still impressive to see a 16% move. Traders bought the dip yesterday at its rising 10-dma and ANR looked poised to move higher. That proved to be a fake and shares were crushed today on big volume. We're not suggesting new positions at this time. This is a higher-risk strangle play with the options so expensive. The options we suggested were the July $105 calls (ANR-GA) and the July $85 puts (ANR-SQ). Our estimated cost was $9.40. We want to sell if either option hits $14.50.
Picked on June 15 at $ 94.25
Chevron - CVX - close: 97.42 chg: -1.66 stop: n/a
CVX bounced up to the $100.00 mark and rolled over. Today's failed rally and close under its 50-dma is bearish. However, the move to $100 did allow for another great entry point to open strangles. We are not suggesting new positions at this time. The options we suggested were the August $110 calls (CVX-HB) and the August $90 puts (CVX-TR). Our estimated cost is $2.20 (based on June 30th prices we needed 2 calls per 1 put). We want to sell if the puts $3.85 or if the calls hit $1.90. More aggressive traders may want to aim higher.
Picked on June 30 at $ 99.13
Garmin Ltd. - GRMN - close: 42.67 chg: -0.27 stop: n/a
We don't know what it's going to take to shock GRMN out of its $41.50-44.50 trading range. More conservative traders may want to abandon ship. We have less than three weeks left for July options. We're going to stick with the play for now. We're not suggesting new positions at this time. The options we listed were the July $50 calls (GQR-GJ) and the July $40 puts (GQR-SH). Our estimated cost was $2.55. We want to sell if either option hits $ 4.75 or higher.
Picked on June 15 at $ 44.91
Holly Corp. - HOC - close: 34.65 chg: -2.13 stop: n/a
HOC plunged almost 6% as crude oil charged to new highs. The stock is breaking down under the $35.00 level. Keep an eye on the put side of our play. We're not suggesting new positions at this time. The options we listed were the July $45 calls (HOC-GI) and the July $35 puts (HOC-SG). Our estimated cost was $2.00. We want to sell if either option hits $ 3.00 or higher.
Picked on June 15 at $ 41.25
KLA-Tencor - KLAC - close: 40.31 chg: -1.23 stop: n/a
KLAC has failed near short-term resistance at $42.00. We are not suggesting new positions at this time. We have less than three weeks left, which raises the risk for this play. We listed two different strangles on KLAC.
KLAC Strangle #2) The options we listed were the July $45.00 calls (KCQ-GI) and the July $35.00 puts (KCQ-SG). Our estimated cost is $0.70. We want to sell if either option hits $1.50.
Picked on June 22 at $ 40.07
United States Oil - USO - cls: 116.84 chg: +2.25 stop: n/a
Crude oil rallies to another new high and USO follows. We are not suggesting new positions at this time. We suggested two different strangles. The strangle with the wider strikes costs less but has higher risk.
USO Strangle #1) The options we listed were the July $115 calls (IYS-GK) and the July $105 puts (IYS-SA). Our estimated cost is $7.10 We want to sell if either option hits $9.75.
USO Strangle #2) The options we listed were the July $120 calls (QSO-GP) and the July $100 puts (IYS-SV). Our estimated cost is $4.10. We want to sell if either option hits $6.50.
Picked on June 22 at $109.14
Burlington Northern - BNI - cls: 92.52 chg: -5.10 stop: 94.95
It was a very ugly day on Wall Street. Most of the market's recent leadership stocks were crushed today. Railroads, which had already broken their bullish trend, were also hammered. BNI's bounce from support yesterday immediately failed today. The stock fell through support near $95.00 and hit our stop loss at $94.95. The next stop for BNI looks like the 200-dma near $90.00.
Picked on July 01 at $ 97.62 */stopped out 94.95
Diamond Offshore - DO - cls: 134.78 chg: -4.92 stop: 135.85
Oil rallies to a new all-time high and yet DO gets slammed. The stock spiked to $143.31 this morning and then collapses on no news. DO looks like it was a casualty to Wednesday's "sell the winners" mentality that was running rampant across the market. Shares broke through short-term support at $136.00 and hit our stop at $135.85.
Picked on July 01 at $139.70 *stopped out 135.85
Valero - VLO - close: 37.92 change: -2.46 stop: n/a
Target achieved. A new record high in crude oil pushed VLO to a 6% loss. The put side of our strangle, the July $40 puts, traded at an intraday high of $3.00 and are currently around $2.91bid/$2.97ask. It was our plan to sell if either option hit $2.75 or higher. More aggressive traders may want to let it ride and see how far VLO falls (oil rises). The options we suggested were the July $50 calls (VLO-GJ) and the July $40 puts (VLO-SH). Our estimated cost is $1.89.
Picked on June 15 at $ 44.84 /target achieved (strangle)