Agrium Inc. - AGU - close: 50.95 change: -0.26 stop: 44.95 Shares of AGU held up reasonably well. There wasn't a lot of profit taking after Monday's rally. The stock spent Tuesday churning sideways. If the market does pull back we can expect a dip toward the $48-46 zone. More conservative traders will want to seriously consider raising their stop loss toward $46.00. I am certainly thinking about it. I would wait for that dip into the $47-46 area before considering new bullish positions. Please note that I think our biggest risk right now, other than a market correction, is AGU raising its offer for CF too high and investors turning sour on the deal. AGU has exceeded our first target at $49.95. Our second target is $54.00. The Point & Figure chart is bullish with a $59 target. FYI: Traders need to know that AGU is currently trying a hostile takeover of rival CF Industries (CF). CF believes that AGU's offer is too cheap. In the meantime CF is trying a hostile takeover of Terra Industries (TRA). One of our biggest risks by trading AGU is that AGU might raise its offer to buy CF. The company did so in late March and the stock gapped down on the news. AGU raised its offer a second time yesterday, which may have accounted for the spike down toward $43.50. AGU raised the cash portion of their offer by $5 to $40 a share in cash and one share of AGU stock for CF.
BHP Billiton Plc - BBL - close: 46.01 change: +1.07 stop: 41.90 Foreign metal and mining stocks did pretty well today. Shares of BBL rallied to $46.72 before trimming its gains this afternoon. At this time I would expect a dip back toward the $45-44 zone. Previous support and resistance near $44.00 should offer some support again. Our first target is $49.90. Our second target is $54.00. The Point & Figure chart is bullish with a $62 target.
Emerging Markets Bear 3x ETF - EDZ - close: 15.72 change: -0.48 stop: n/a Our aggressive trade on a pull back in the emerging markets sank even lower. The EDZ lost 2.9% thanks to another strong session for Indian and Chinese markets. It doesn't help that one of the largest holdings in the MSCI Emerging markets index is Taiwan Semiconductor. The semis were one of the best performing sectors on Tuesday. OptionInvestor.com did not have a stop loss on this play. We knew it was going to be super volatile since it's a triple-leveraged ETF. Investors were to limit their risk by using a small position size. I am not suggesting an exit yet but I'm not suggesting new entries either. Our first target is $24.75. Our second target is $29.45. FYI: If you can't pull up a chart of the MSCI Emergin Markets index you can watch the EEM instead.
More info on the EDZ:
Factset Research - FDS - close: 56.04 change: +0.15 stop: 52.40 FDS managed to eke out another gain after traders bought the dip near its rising 10-dma. I am raising our stop loss to $52.90. More conservative traders may want to consider a stop closer to $54.00 instead. FDS has exceeded our first target and we're currently aiming for $59.00. The Point & Figure chart is very bullish with a $79 target.
Currencyshares British Pound - FXB - cls: 154.80 chg: +1.48 stop: 148.90*new* The British Pound continues to show relative strength. Today the FXB gapped higher and hit $155.12 intraday. Investors in Europe were happy to hear that the U.K. was in talks with sovereign wealth funds to buy stakes in the recently nationalized English banks. This helped give the currency a boost. Once again I'm suggesting more conservative traders consider an early exit now to lock in a profit. I'm raising our stop loss to $148.90. We will exit if the FXB hits $157.00. I'm not suggesting new bullish positions at this time.
iShares China ETF - FXI - close: 35.80 change: +0.14 stop: 32.49 *new* The Chinese FXI rallied to new relative highs over the $36.00 level and then edged lower this afternoon as traders began to take profits. I'm starting to think that a fill-the-gap move back to $32.50 is not in the cards at least not soon. If you're looking for a new bullish entry point I would consider buying calls on a dip near $34.25 and then use a stop loss just under the $33.20 low from May 14th. Please note that I am raising our stop to $32.49 and more conservative traders may want to go ahead and raise theirs toward $33.00. We have two targets. Our first target to take profits is $36.45. Our second target is $39.45.
SPDR Gold Trust - GLD - close: 90.96 change: +0.60 stop: 87.75 Gold was stronger today as investors reacted to a falling dollar. The U.S. dollar tagged new four-month lows. Honestly, I'm a little surprised that the GLD is not moving faster as the dollar declines. The trend in the GLD is up and I would consider new bullish positions in the $90.50-89.00 zone. Our first target is $94.75. Our second target is $97.45.
Intl. Bus. Mach. - IBM - close: 105.51 change: +0.93 stop: 99.65 Tech was one of the best performers today. Shares of IBM rallied toward the $106 level. I'm tempted to raise the stop loss toward $101 but we'll leave it at $99.65 for now. Currently our target is $109.40.
Mastercard - MA - close: 166.73 change: -6.67 stop: 158.90 *new* The credit card stocks were getting hit hard today as investors decided to sell first and ask questions later when it comes to how will the new law affect companies like MA and V. It looks like the Obama administration will score another victory as the Senate just voted 90-5 passing the credit-card reform bill and Obama will likely sign it in the next few days. The changes don't take affect until February 2010 but shares of MA lost 3.8% and broke down under round-number support at $170. The stock is now testing technical support near its 200-dma and its 50-dma. The late day bounce failed at the $170 region, and this little failed rally looks rather ominous. I fully expect a dip toward $160 soon. Please note that I'm adjusting the stop loss by $1.00 to $158.90. If MA is going to break $160 then I want to get stopped out on a real breakdown and not some minor fluctuation. I would definitely buy calls on a bounce from the $160 level. We have two targets. We want to take some money off the table at $198.50 since the $200.00 mark could be round-number resistance. Our second target is $218.50. The Point & Figure chart is bullish with a $218 target.
Visa - V - close: 64.80 change: -1.61 stop: 65.45 Shares of V did not suffer as poorly as MA but the general trend could be the same as investors react to the legislation just passed regarding new credit card rules. Hopefully Visa will pull back toward $60.00. We have two different entry points. One entry point to buy calls is at $69.00 with a stop at $65.45. Our second entry point is at $60.50 with a stop at $57.40. Our first target, if triggered at $69.00, is the $74.00 level. The P&F chart is very bullish with a $95 target.
Whirlpool - WHR - close: 42.73 change: -0.74 stop: 41.99 Our catalyst for a move higher in WHR fizzled. The plan was if the housing data out on Tuesday was good expect WHR to rally and buy a breakout over $44.00. That didn't happen as the headline housing permits and construction data was negative. Some of the short-term indicators for WHR are turning negative again. Now instead of scrapping the play I'm going to keep WHR as a potential short-term candidate. As long as the S&P 500 holds above the 875 region there's a chance this rally isn't over yet. I am suggesting a trigger to buy calls at $44.05. If triggered our target is $48.25. This should be a short-term play that happens in a few days or less.
Becton Dickinson - BDX - close: 64.57 change: -0.36 stop: 68.25 BDX is slowly fading lower and just slipped through its 30 and 50-dma on Tuesday. Our first target to take profits is $61.00. Our second target is $55.15. At this point I would take off at least half of the position at $61.00.
Harman Intl. - HAR - close: 17.50 change: +0.36 stop: 19.05 The oversold bounce in HAR is not over yet. The stock gained 2% but the rally did struggle in the $17.65-17.75 zone. This stock should find new resistance near $18.00. I'm not suggesting new bearish positions at this time and more conservative traders may want to exit early. Our target is $16.10.
L-3 Comm. - LLL - close: 74.10 change: -0.01 stop: 77.05 I would consider new bearish put positions on LLL in the $74-76 zone. Patient traders may want to wait for a better failed rally pattern near $76 before launching positions. Our first target is $70.25 (just above the 50-dma). We can contemplate a secondary target around $67.00 but for now the plan is to exit at $70.25.
Nike Inc. - NKE - close: 52.04 change: +0.84 stop: 54.05 The action in NKE is a little worrisome. The stock closed above the $52.00 level, which should have been stronger support. The stock is also flirting with a breakout back above its 200-dma. More conservative traders might want to consider an early exit now or use a tighter stop loss. I'm not suggesting new bearish positions at this time. More aggressive traders may want to aim lower like the $45.00 region. More conservative traders could move their stop near $52.50 or $52.00 instead. Our downside target is $48.15.
Northrop Grumman - NOC - close: 48.29 change: +0.59 stop: 50.85 NOC provided a bounce back toward its 10 and 200-dma but started to falter this afternoon. This looks like the failed rally I suggested waiting for as our next entry point to buy puts. Our target is $44.25 or the 50-dma, whichever one NOC hits first.
Everest RE Group - RE - close: 67.20 change: -2.91 stop: 72.25 Insurance and financials were actually some of the hardest hit today. RE lost 4.1% and closed at new relative lows. This looks like another entry point for bearish positions. Our target is $62.55. My time frame is about four weeks.
(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.) Gold ETF - GLD - close: 90.96 change: +0.60 stop: n/a The GLD is still in an up trend. We're not suggesting new strangle positions at this time. The options we suggested were the June $95 calls (GLD-FQ) and the June $80.00 puts (GLD-RB). Our estimated cost was $1.95. We want to sell if either option hits $4.85 or higher.
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