BHP Billiton Plc - BBL - close: 44.99 change: -1.51 stop: 43.70 There was no follow through on BBL's bullish candlestick from Tuesday. Shares hit $46.88 and reversed giving up almost all of yesterday's gains. It now looks like the odds of a retest of the exponential 200-dma near $43.50 are rising. If BBL breaks the $44.00 level we will be stopped out. More conservative traders will want to seriously consider an early exit. I am not suggesting new positions at this time. 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: 16.01 change: +0.53 stop: n/a The EDZ is bouncing from the $15.00 region. I would be very tempted to launch new bullish positions in this ETF now, especially given the market's reversal lower today. Please note that I'm changing my suggested entries for new positions to $17.35 (was 17.75) and we'll keep the more cautious entry at $20.05. 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:
iShares China ETF - FXI - close: 35.36 change: +0.24 stop: 33.40 *new* The Chinese market was strong today as Asian investors finally got a chance to react to yesterday's better consumer confidence numbers. The FXI rallied to $36.34 but fell short of our first target. The trend of higher lows is still in place but I suspect that the FXI will retest the $34.00 region soon. I am raising our stop loss to $33.40. More conservative types might want to adjust their stop closer to $34.00. We have two targets. Our first target to take profits is $36.45. Our second target is $39.45.
SPDR Gold Trust - GLD - close: 93.45 change: -0.31 stop: 89.90 The U.S. dollar managed a bounce on Wednesday and that stalled the rally in gold prices. I don't see any changes from my previous comments. I'm not suggesting new bullish positions at this time. Our first target is $94.75. Our second target to take profits in the GLD is at $97.45.
iShares Fincl.Srvcs - IYF - close: 41.59 change: -1.41 stop: 31.95 There was no follow through on yesterday's bullish bounce and today's action definitely looks more ominous. We're still waiting for a real correction back toward $35.00. Currently our strategy is to wait and buy calls on a dip in the $35.50-34.50 zone. We'll use a stop loss at $31.95. More conservative traders can use a stop closer to $34.50. If triggered our first target is $39.90. Our second target is $44.00.
Mastercard - MA - close: 167.38 change: -1.23 stop: 158.90 I know I labeled this an aggressive, volatile play and MA has not disappointed. However, if you do not want to weather a drop toward $160 then consider exiting now. I do think MA will test the $160 zone and possibly its 100-dma, which is quickly approaching $160. Currently the plan is to buy calls (again) at $160.25, preferably on a bounce. 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.
Ultra-short $RUT - TWM - close: 46.93 change: +1.54 stop: 44.35 The TWM retested support near $45.00 and bounced. This looks like a new, more attractive entry point to open bullish call positions. If the Russell 2000 index breaks down the TWM could move pretty fast. Our first target is $54.00. Our second target is $59.00.
Visa - V - close: 65.92 change: -0.85 stop: 65.45 Visa retested resistance near $68.00 and reversed but the stock has not yet broken its short-term trend of higher lows. That will probably happen soon. There is no change from our previous comments on Visa. We have two different entry points listed. 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. Edit: I would use the July or September calls. Our first target, if triggered at $69.00, is the $74.00 level. The P&F chart is very bullish with a $95 target.
Becton Dickinson - BDX - close: 67.13 change: +0.00 stop: 68.25 I would argue that having BDX close unchanged for the session is a sign of relative strength. Yet the stock failed to breakout over resistance at $68.00 and its 100-dma. Volume was pretty strong today, which could be a sign of distribution (a.k.a. investors selling into the rally). I see today's action as a new entry point for puts but readers may want to wait for a new decline under $66.00. 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.
Eaton - ETN - close: 44.01 change: -1.82 stop: 48.11 I certainly had my doubts yesterday but ETN has acted according to plan. The stock rallied toward $46.00 and rolled over as expected. The stock has resistance near $46 and $48. We're keeping our stop loss at $48.11 for now. You may want to use a tighter stop. Our first target is $40.25. Our second target is $38.25.
First Solar Inc. - FSLR - close: 180.69 change: + 1.18 stop: 195.51 FSLR tried to bounce but didn't get very far. The stock made it over the $186 level, which brushed past yesterday's high but the strength didn't last. If you are looking for a bearish entry point I'd wait for a failed rally near $190.00 maybe $195. Yesterday we lowered our stop loss to $195.51. Our second target for FSLR is the $166.00 mark.
Harman Intl. - HAR - close: 18.09 change: -0.04 stop: 19.05 We had a very close call with HAR today. The stock rallied to the $19.00 level and hit $19.02 before reversing. I see today's action as a new failed rally and bearish entry point to buy puts. It's amazing the difference a day can make. Be sure to close out half to two-thirds of your position at our first target of $16.10. We have a second target at $14.55.
iShares Real Estate - IYR - close: 32.24 change: -1.11 stop: 34.15 Here's another case where there was no follow through on yesterday's bullish engulfing candlestick pattern. I remain bearish on the IYR but I'm still expecting a bounce on its test of the $30.00 mark. Our target is $25.55.
L-3 Comm. - LLL - close: 72.38 change: -1.53 stop: 76.15 LLL is also seeing its oversold bounce roll over. I am not suggesting new positions at current levels. We have our first target at $70.25. Our second target is $67.00.
MDC Holdings - MDC - close: 30.46 change: -1.36 stop: 35.75 So far so good. The oversold bounce failed at its 200-dma today. Shares have now closed under the 100-dma. More conservative traders might want to ratchet down their stop loss. Our first target is $27.75. Our second target is $25.15.
Northrop Grumman - NOC - close: 47.99 change: -1.01 stop: 50.85 NOC completely erased yesterday's gains. The stock has failed twice now near $49.50. We may want to start thinking about lowering our stop loss. Our first bearish target is $45.51. Our second target is $42.75.
Everest RE Group - RE - close: 66.36 change: -1.97 stop: 70.25 *new* RE is another stock that completely erased yesterday's gains. The rally has failed under its 10-dma and shares look poised to hit new relative lows soon. I am adjusting our stop loss to $70.25. Our target is $62.55. I am considering a secondary target near $60.00.
Regional Bank HOLDRs - RKH - close: 64.85 chg: +2.50 stop: 71.11 Today's failed rally looks good if you're bearish. I would still consider new positions now but more cautious traders might want to wait for a new relative low under $68.30 first. We have a stop loss above last week's high. Our first target is $58.50. Our second target is $54.00.
Retail Holders - RTH - close: 77.37 change: -1.62 stop: 80.81 Entry point alert! The rebound in the RTH came close but it failed to reach the $80.00 level. Today's action is another entry point to buy puts. My first target is $73.75. My second target is $70.25.
Silgan Holdings - SLGN - close: 44.24 change: -1.76 stop: 46.01 *new* I want to say thank you to the reader that pointed out my typo last night. In yesterday's SLGN update I said I was "now suggesting new positions" when it should have said "not suggesting". Today might be a different story. The rebound has totally failed. Shares gapped open lower and almost completely erased yesterday's gains. Most quote services are going to list yesterday's high at $46.00 even though if you look at an intraday chart SLGN never traded over $45.40 yesterday. I am lowering our stop loss to $46.01. Our target is the $40.25 mark.
Toll Brothers - TOL - close: 18.02 change: -0.53 stop: 20.21 Today's failed rally near $19.00 was perfect. TOL tagged its 50-dma and rolled over. Yesterday I suggested using a move into the $19-20 zone as a new entry point for bearish positions and we got it. Our target is $16.25.
United Parcel Service - UPS - close: 49.75 chg: -1.39 stop: 53.55*new* I was really expecting a bigger bounce in UPS. Instead of waiting for a bounce near $53.00 I'm going to suggest we go ahead and launch positions now. We'll just move our sop loss down to $53.55. More conservative traders might want to wait for a move under the 100-dma near $48.60. We'll have to adjust our targets. Our new first target is $45.55. No second target at this time (yet).
Wynn Resorts - WYNN - close: 36.39 change: -1.71 stop: 42.55 The action in WYNN is definitely good news if you're bearish. The rally failed near its 10 and 30-dma. The stock looks poised to challenge $35.00 again soon. More conservative traders might be tempted to lower their stop loss. Our first exit was on Friday (this morning). Our second and final exit is $31.00.
(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: 93.45 change: -0.31 stop: n/a Another bounce in the U.S. dollar has stalled the rally in gold and the GLD but the trend is still up. 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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