BHP Billiton Plc - BBL - close: 46.11 change: +0.10 stop: 43.70 *new* The material and commodity names were the leaders today but BBL gave back almost all of its gains. This is short-term bearish. I am expecting a dip back toward $44.00. With this in mind I'm raising our stop loss to $43.70. 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: 15.44 change: -0.28 stop: n/a Our extremely speculative trade in the emerging markets continues to worsen. However, the action in the U.S. markets today might be suggesting a possible top. I might be tempted to add to or launch new positions in the EDZ over $18.50 or over $20.00. For now I'm not suggesting new trades here. 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. 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: 55.03 change: -1.01 stop: 53.75 *new* The action in FDS today combined with its momentum indicators smells like a possible top but for now the upward trend remains in force. I am raising our stop loss to $53.75. More conservative traders may want to just exit altogether. 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.
iShares China ETF - FXI - close: 35.38 change: -0.42 stop: 32.90 *new* The FXI is rolling over near $36.00 thanks to a flat day for the Chinese markets and a sour afternoon in the U.S. markets. I'm still expecting a dip back toward $34.00. In the meantime I'm raising our stop loss to $32.90. We have two targets. Our first target to take profits is $36.45. Our second target is $39.45.
SPDR Gold Trust - GLD - close: 92.25 change: +1.29 stop: 87.75 The GLD is another security that got a big boost out of the falling dollar. Gold is trading above $920 and the GLD closed at new six-week highs. Our first target is $94.75. Our second target is $97.45.
Intl. Bus. Mach. - IBM - close: 104.05 change: -1.46 stop: 101.45 *new* This is starting to look like a new lower high for IBM. The sell-off was really picking up speed this afternoon. I would be tempted to just exit early. Instead I am raising the stop loss to $101.45 just in case IBM can keep the trend of higher lows alive. I'm not suggesting new bullish positions at this time. Currently our target is $109.40.
iShares Fincl.Srvcs - IYF - close: 41.89 change: -0.94 stop: 39.90 The financial sector under performed on Wednesday. The profit taking started in Europe and banks lagged the rest of the market for the entire session here at home. Yet the IYF was not weak enough to hit our entry point. The action in the banking sector over the last day or two is starting to look like a lower high. I suspect that the risk is rising for a larger correction in the banks but for now the bullish trend of higher lows is still in force. I am going to tweak our entry point. Instead of buying calls at $41.00 let's buy calls at $40.50. The low on May 14th was $40.47. I'll move the stop loss down to $39.49. If triggered at $41.00 our first target is $45.45. More aggressive traders could aim for the 200-dma.
Mastercard - MA - close: 169.63 change: +2.90 stop: 158.90 I am growing more concerned about MA. Yesterday's weakness made sense given the passage of legislation regarding the credit card industry in Washington. Today's move was a sharp rally higher that quickly failed. Now it looks like a failed rally under the 10-dma. I strongly suspect that MA will trade lower and near the $160 mark. If the market truly corrects then we will be stopped out. This was always an aggressive trade. If you're feeling cautious consider an early exit now. Currently the plan is to buy calls near $160, preferably on a bounce near $160. 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: 64.96 change: +0.16 stop: 65.45 Visa is still stuck in no-man's land. Odds might be growing for a test of support near $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: 42.62 change: -0.11 stop: 41.99 It looks like I should have dropped WHR when we had the chance last night since the housing-data catalyst did not work. Shares spiked higher with the market this morning, hit our trigger to buy calls at $44.05, and then rolled over with a failed rally at the $45.00 mark. With the market looking poised to contract tomorrow we could get stopped out pretty easily. I would seriously consider an early exit to cut my losses. No new positions at this time. Our target is $48.25.
Chart:
Becton Dickinson - BDX - close: 65.06 change: +0.49 stop: 68.25 Today looks like a little failed rally under the $66.00 level. Traders can use it as a new bearish entry point but consider adjusting your stop loss lower. 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: 17.66 change: +0.16 stop: 19.05 I am looking for this bounce in HAR to run out of steam very soon. The four-day rebound has reached the 38.2% Fib retracement of the initial down move. I am actually adding a secondary target. Be sure to close out half to two-thirds of your position at $16.10. However, I'm setting a second target at $14.55. If you want to buy puts now I would use a tighter stop, maybe $18.60ish.
L-3 Comm. - LLL - close: 73.21 change: -0.89 stop: 77.05 The oversold bounce in LLL has now failed under the $75.00 level. I'm edging the stop loss down to $76.55. More conservative traders may want to tighten theirs further. We are going to add that second target at $67.00. Our first target is $70.25 (just above the 50-dma).
Nike Inc. - NKE - close: 50.69 change: -1.35 stop: 53.05 *new* Shares of NKE have now built a little bear-flag pattern and should be poised to breakout of this consolidation soon. I am adjusting our stop loss down to $53.05. More conservative traders could probably get away with a stop closer to today's high (52.54). Our target to exit is $48.15. More aggressive traders may want to aim lower like the $45.00 region.
Northrop Grumman - NOC - close: 49.17 change: +0.88 stop: 50.85 If yesterday's bounce wasn't good enough as an entry point to buy puts we got a better one today. NOC has moved back into the $49-50 zone and is once again challenging resistance at the 200-dma. I'm expecting it to fail. If you look at the DFI defense index it failed at the 200-dma two weeks ago and is also testing its 200-dma again today. I need to adjust our exit strategy. Our first target is $45.51. Our second target is $42.75.
Everest RE Group - RE - close: 66.81 change: -0.39 stop: 72.25 RE is sinking to new relative lows. Volume was above average today. I'm expecting the decline to pick up speed. Our target is $62.55. My time frame is about four weeks.
Retail Holders - RTH - close: 77.81 change: -0.92 stop: 80.81 *new* The Target (TGT) earnings killed our RTH play. I warned readers last night that TGT would report earnings on Wednesday morning. The company's results were better than expected and TGT gapped open higher and spiked to a new high before selling off. This pushed the RTH to gap open higher at $79.57 and then hit our stop loss at $80.10 before rolling over. I still think this is a bearish candidate. We'll mark our first attempt as a loss but I'm re-launching the put play now at current levels. We'll just move our stop to above Wednesday's high. My first target is $73.75. My second target is $70.25.
Annotated Chart:
Silgan Holdings - SLGN - close: 46.00 change: +0.46 stop: 46.55 There is no change from our previous comments. The consolidation has a bearish trend of lower highs. The stock is forecasting a breakdown under support at the $45.00 level. I'm suggesting readers buy puts at $44.75 with a target to exit at $40.25.
Wynn Resorts - WYNN - close: 39.18 change: -0.87 stop: 43.55 Good news. WYNN did not participate with the market's rally this morning. Shares produced a lower high and closed under $40.00. I don't see any changes from our Tuesday night comments. This is a very aggressive play and I suggest readers trade a much smaller position size. My target is $32.55.
(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: 92.25 change: +1.29 stop: n/a The falling U.S. dollar continues to drive gold higher. The GLD gained 1.4%. 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.
Agrium Inc. - AGU - close: 51.38 change: +0.43 stop: 44.95 Shakespeare said it best. Discretion is the better part of valor. I am suggesting readers exit our AGU play immediately. The stock rallied to $53.70 this morning and then failed. Our second and final target to exit was $54.00. Today's move in AGU combined with the action in the broader market looks like a short-term top. Exit now and just keep AGU on your watch list as we might get another entry point on a dip in the $47-44 zone.
Chart:
Currencyshares British Pound - FXB - cls: 157.45 chg: +2.65 stop: 148.90 Target achieved. The U.S. dollar continues to collapse and the big decline today lifted the British Pound. The ETF for the pound is the FXB, which hit $157.84 and technical resistance at the 200-dma. Our target to exit was $157.00.
Chart:
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