BHP Billiton Plc - BBL - close: 46.60 change: +1.61 stop: 43.70 Back and forth, back and forth... the market and BBL really isn't heading anywhere but the trend of lower highs for BBL is still in place. Bulls are still in control. Readers might want to consider new bullish positions if BBL breaks out past $48.00. Over $48.00 would be a new relative high. Aim for our second target. 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: 14.55 change: -1.46 stop: n/a Ouch! Strength in the emerging markets sent the EDZ to a 9% loss. This is getting ugly. Every time it looks like this ETF is about to bottom and rocket higher it reverses lower the next day. Eventually this will see a sharp correction higher but at this rate it might be from the $10 level (or lower). My suggested entry points for new positions at $17.35 and at $20.00 are both above short-term trendlines of resistance. I'm on the verge of declaring our original trade dead and just listing EDZ with the current entry points as new trades. 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: 36.16 change: +0.80 stop: 33.40 The Chinese markets were actually closed for holiday today but that didn't stop investors from bidding up the Chinese ETF. Shares of the FXI tagged a new relative high at $36.38. We have two targets. Our first target to take profits is $36.45. Our second target is $39.45.
SPDR Gold Trust - GLD - close: 94.24 change: +0.79 stop: 89.90 Target achieved. Gold prices continued higher even in the face of a stronger dollar today. The GLD hit $94.83 and our first target to take profits was $94.75. 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.
Chart:
iShares Fincl.Srvcs - IYF - close: 42.61 change: +1.02 stop: 31.95 The financials just won't break. They're clinging to the pattern of higher lows as it faces a new pattern of lower highs. Eventually, and sooner rather than later, this sector is going to break one way or the other. 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: 172.11 change: +4.73 stop: 158.90 I start to turn gloomy yesterday and MA decides to out perform the market with a 2.8% rally. The stock is back above a number of key moving averages but still has resistance near $175. Currently the plan is to buy calls (again) at $160.25, preferably on a bounce. I would use the July calls. 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: 46.81 change: -0.11 stop: 44.35 We're not seeing any follow through in this market to the upside or to the downside. The TWM spent the session churning sideways. If the Russell 2000 breaks down under the 475 level (definitely under 470) then the TWM should start to take off. I'm suggesting you watch the RUT as your trigger for new positions. Our first target is $54.00. Our second target is $59.00.
Visa - V - close: 66.50 change: +0.58 stop: 65.45 There is no change from my prior comments. Visa continues to oscillate sideways. 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: 67.00 change: -0.13 stop: 68.25 The market bounced but BDX did not. That's a good sign for the bears but there wasn't much weakness either so it's hard to be excited here. Shares continue to struggle with resistance at the 100-dma. 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: 43.60 change: -0.41 stop: 48.11 Shares of ETN were downgraded to a "sell" this morning. The stock broke short-term support at $44.00 and tagged technical support at its 50-dma and 100-dma near $42.25 before paring its losses. I wouldn't be surprised to see the bounce continue tomorrow. Another failed rally near $45.50 or $46.00 can be used as a new bearish entry point. 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: 183.75 change: + 3.06 stop: 195.51 There is no change from my previous comments on FSLR. The stock is still churning inside the $180-186 region. 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: 17.63 change: -0.46 stop: 19.05 HAR slipped toward $17.00 and its rising 50-dma and bounced. The action over the last two weeks looks like a bear flag pattern. Bears need HAR to break this new trend of higher lows because right now the next move inside this flag would be a bounce back toward $19.00. 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: 32.85 change: +0.61 stop: 34.15 The IYR, like most of the market, is stuck consolidating sideways. IYR, also like the S&P 500, is bouncing near its rising 30-dma. Readers may want to wait for a new decline under the 30-dma (32.40) before initiating new positions. I'm still expecting a bounce on its test of the $30.00 mark. Our target is $25.55.
L-3 Comm. - LLL - close: 73.10 change: +0.72 stop: 76.15 LLL produced a 1% bounce on relatively low volume. 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: 29.67 change: -0.79 stop: 33.55 *new* The new home sales figures out today were not very positive. The home construction index lost 4.6%. The sell-off in MDC wasn't quite that bad but shares did close under round-number support at $30.00. I am lowering our stop loss to $33.55. Our first target is $27.75. Our second target is $25.15.
Northrop Grumman - NOC - close: 47.96 change: +0.40 stop: 50.85 NOC continues to consolidate under technical resistance at its 200-dma. 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: 67.34 change: +0.98 stop: 70.25 Financials produced one of the biggest bounces today. Shares of RE managed a 1.4% gain. I suspect we'll see another rally toward the $69-70 level soon. Our target is $62.55. I am considering a secondary target near $60.00.
Regional Bank HOLDRs - RKH - close: 67.84 chg: +2.99 stop: 71.11 Whoops! I had a typo in yesterday's update. I said readers may want to wait for a new decline under $68.30 before launching new bearish positions. I meant $63.80. The RKH continues to bounce from support near $64.00. If the RKH closes over $68.50 readers might want to exit early since it would suggest the RKH will rise toward resistance at its 200-dma ($72.90) or its early May highs near $75-76. 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: 76.92 change: -0.45 stop: 80.81 The retail sector under performed the rest of the market but the RTH did bounce from support near $76.00 again. If you are looking for an entry point wait for another failed rally near $79.50. My first target is $73.75. My second target is $70.25.
Silgan Holdings - SLGN - close: 43.87 change: -0.18 stop: 46.01 SLGN received some new analyst coverage today with an "out perform" rating. The news failed to stimulate the stock price, which under performed the rest of the market. Our target is the $40.25 mark.
Toll Brothers - TOL - close: 17.44 change: -0.58 stop: 20.21 TOL is another homebuilder that under performed thanks to lousy new home sales figures. The stock fell to $17.05 intraday. Our target is $16.25.
Union Pacific - UNP - close: 45.56 change: +0.25 stop: 49.05 We've got to keep an eye on the Transportation index, which dipped toward the 3,000 level and its 50-dma and then bounced. Granted the bounce wasn't very strong but we saw a similar move in UNP. UNP is actually under performing the transportation index. Shares of UNP hit new relative lows at $44.00 but it also happened to tag the 100-dma before bouncing. A failed rally in the $47.50-48.00 zone would be a good entry point. Our target is $40.25.
United Parcel Service - UPS - close: 49.01 chg: -0.74 stop: 53.55 UPS, another transport stock, under performed with a 1.4% decline. Do not be surprised to see a little oversold bounce at its 100-dma near $48.50. Our new first target is $45.55. No second target at this time (yet).
Wynn Resorts - WYNN - close: 36.35 change: -0.04 stop: 42.55 The U.S. casino index gained 1% yet shares of WYNN under performed. The stock traded near round-number support at $35.00 and bounced. I'm not suggesting new bearish positions at this time. We need to keep a wary eye on the 50-dma, which might also be support. Our first exit was on Friday (May 22nd). 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: 94.24 change: +0.79 stop: n/a The GLD is reaching resistance near $95.00. It's time we expect a correction soon. I would look for a dip back toward the $92-90 zone. 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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