BHP Billiton Plc - BBL - close: 51.17 change: +3.07 stop: 46.40*new* Target achieved. BBL gapped open higher at $50.95 and soared to $52.11 before slowly paring its gains. Commodities have been real leaders in this market. I expect that to continue but BBL looks short-term overbought and due for a pull back. We're upping our stop loss to $46.40. Broken resistance near $48.00 should offer new support. BBL gapped open above our first target at $49.90. We're now aiming for $54.00. The Point & Figure chart is bullish with a $62 target.
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Flowserve - FLS - close: 78.58 change: +5.01 stop: 69.20 It was a very big day for FLS. The market's positive tone helped launch FLS almost 7% higher. The stock gapped open at $75.65 so we have to adjust our entry point. I would not chase new entries at this time. Wait for a dip back toward $75.00 or $73.50 near Friday's close. We have a first target at $79.90. We're adding a second target at $84.40.
iShares China ETF - FXI - close: 39.53 change: +2.16 stop: 35.75 *new* The Chinese markets have been pretty hot lately. The Hong Kong Hang Seng has shot straight up for the last three trading days. Strength in the Chinese markets helped the FXI rallied almost 6% on Monday. The high today was $39.75. Our second and final target to exit has been $39.90. I am suggesting that more conservative traders will want to SERIOUSLY consider an exit right now. I'm raising our stop loss to $35.75.
SPDR Gold Trust - GLD - close: 95.73 change: -0.47 stop: 89.90 The U.S. dollar continued to fall on Monday and yet the GLD gold ETF spiked to $96.76 and rolled over. The profit taking was pretty mild but the move is a surprise. Most of the commodity sector was higher on Monday. I am not suggesting new bullish positions at this time. The GLD has already exceeded our first target to take profits at $94.75. We're currently aiming for $97.45 as our final exit.
iShares Fincl.Srvcs - IYF - close: 44.11 change: +0.51 stop: 41.20 The financial sector was generally strong overseas but here in the states the banking stocks lagged behind the rest of the market. It's possible Citigroup is to blame. The stock was down on news it was being replaced in the DJIA by Travelers Companies (TRV). The IFY was inching higher today but remains stuck under its 200-dma. Over the weekend we initiated an aggressive bullish entry point on the IYF. Nothing has changed. We'll take some money off the table at $46.00 but we'll also have a second target at $49.85. I want to repeat this is an aggressive trade and I'm suggesting readers only trade half (or less) than their normal option position.
Mastercard - MA - close: 173.73 change: -2.60 stop: 158.90 Oddly enough MA was also an under performer today while the rest of the market was surging higher. Shares spiked to $179.00 this morning and within an hour had rolled over. I hesitate to suggest new positions with shares showing relative weakness. 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.
Mobile Telesys - MBT - close: 44.30 change: +2.81 stop: 37.40 *new* More conservative traders will want to seriously consider taking some money off the table here. MBT rallied more than 6% and hit an intraday high of $44.45. Our first target to take profits has been $44.95. We do have a second target at $49.00 but that could take a while to reach. I'm not suggesting new bullish positions at these levels. Broken resistance in the $39-40 zone should offer new support. I'm raising our stop loss to $37.40.
Precision CastParts - PCP - close: 86.71 change: +4.14 stop: 79.85 The market's strength was exactly what PCP needed. The stock shot higher and broke out from its consolidation pattern. Shares hit our trigger to buy calls at $85.10 within the first 15 minutes of trading. If you missed the entry point I would still consider new positions on a dip near the $85-84 zone. Our first target to take profits is $89.90. Our second target is $97.50. Currently the P&F chart is bullish with a $104 target.
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Visa - V - close: 66.66 change: -1.05 stop: 65.45 Visa still isn't going anywhere. Like shares of MA the stock spiked higher at the open but never broke through the $69.00 level. Today's session almost looks like a bearish engulfing candlestick pattern. There is no change from our previous comments. 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.
Eaton - ETN - close: 47.16 change: +3.66 stop: 48.11 Prepare to exit. The sheer strength in Monday's market rally was enough to lift ETN to an 8.4% gain. Volume was above average, which is bullish too. The rally stalled right at ETN's 200-dma, which is technical resistance. I now expect the market to continue higher but after an 8.4% gain ETN could see some profit taking tomorrow. We want to exit on any decline tomorrow. The newsletter will close this play at Tuesday's closing bell. More aggressive traders can leave the play open since $48.00 is still clearly defined resistance.
MDC Holdings - MDC - close: 30.48 change: -0.23 stop: 33.55 The homebuilders under performed the market on Monday. If the market truly turns higher we can expect the homebuilders to follow whether they deserve to or not. We did get another failed rally under $32.00 this morning as expected. Our first target is $27.75. Our second target is $25.15.
Northrop Grumman - NOC - close: 48.57 change: +0.95 stop: 50.85 With the stock market breaking out more conservative traders are going to want to exit early any NOC positions. I'm not suggesting new put plays here. Our first bearish target is $45.51. Our second target is $42.75.
Regional Bank HOLDRs - RKH - close: 68.61 chg: -0.04 stop: 70.16*new* I am shocked that we weren't stopped out today. The market produced a very widespread rally and yet the banking stocks under performed. The RKH failed to break through resistance at $70.00. I am lowering our stop loss to $70.16. More aggressive traders may want to raise their stop loss toward $73.00 above the simple 200-dma, which should be resistance. More conservative traders will want to exit now. My comments about closing over $68.50 still stand. I'm not suggesting new bearish put plays here.
Silgan Holdings - SLGN - close: 45.40 change: +1.14 stop: 46.01 SLGN came super close to hitting our stop loss today but the rally failed at $46.00. The close over $45.00 is a bullish development. More conservative traders will want to strongly consider an early exit right here! No new positions at this time.
Toll Brothers - TOL - close: 18.80 change: +0.22 stop: 20.21 This bounce toward $19.00 is a new bearish entry point but with the market in rally mode I would hesitate to take it. Our target is $16.25.
United Parcel Service - UPS - close: 52.56 chg: +1.42 stop: 53.55 UPS rallied right to congestion and resistance in the $52.00-53.00 zone. Shares still have their 200-dma directly overhead. If the market continues to build on its recent gains we'll be stopped out in UPS soon. A decline back under $52.00 or $51.00 would look like a new bearish entry point but again I would hesitate to take it if the rest of the market was moving higher. Our new first target is $45.55. No second target at this time (yet).
(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: 95.73 change: -0.47 stop: n/a Gold prices spiked this morning but it didn't last. The GLD encountered some minor profit taking. I am not suggesting new positions at this time. We only have three weeks left before June options expire. 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.
Ultra-short $RUT - TWM - close: 45.00 change: -1.81 stop: 43.25 *new* A very strong session that began in Asia, carried over into European stock markets, and by the time the U.S. markets opened stocks were gapping higher. This pushed the TWM to gap open lower at $42.87, which was under our aggressive (a.k.a. wide) stop loss at $43.25. The Russell 2000's breakout over technical resistance at its 200-dma is very bullish. The TWM now looks like a bearish candidate. Our bullish play is closed.
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Becton Dickinson - BDX - close: 68.01 change: +0.33 stop: 68.25 The market's early strength was enough to fuel a rally in BDX to $68.42. Our stop loss was $68.25. Shares still have a bearish trend of lower highs but the recent rally has been impressive.
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First Solar Inc. - FSLR - close: 189.06 change: - 1.23 stop: 195.51 FSLR under performed the market with a new failed rally pattern but the volatility this morning was enough to push FSLR to $196.25. Our stop loss was $195.51. This was a tough play for us with the big gap down entry point.
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Harman Intl. - HAR - close: 20.04 change: +1.40 stop: 19.51 The market was rallying on renewed homes that the global economy was improving. This sent HAR, a consumer discretionary stock, to a 7.5% gain. The stock broke through technical resistance at its 200-dma and hit our stop loss at $19.51 in the process.
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iShares Real Estate - IYR - close: 35.17 change: +1.42 stop: 34.15 Shorts probably panicked this morning with the market in rally mode and the IYR broke to new highs. Shares hit our stop loss at $34.15. Actually the IYR gapped open higher at $34.20. Volume was above average today.
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L-3 Comm. - LLL - close: 75.52 change: +2.01 stop: 76.15 We're going to exit early out of LLL. The stock has produced a short-term bullish breakout. I still see resistance at its 200-dma and near $80.00 but we don't want to wait to get stopped out. Exit now and we can wait for the next failed rally.
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Everest RE Group - RE - close: 71.44 change: +2.21 stop: 70.25 Insurance stocks under performed the rest of the market but RE managed a 3.1% gain. The stock broke through round-number resistance at $70.00 and its 50-dma. Shares hit our stop loss at $70.25.
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Retail Holders - RTH - close: 81.27 change: +3.64 stop: 80.81 Investors bought the retailers on Monday. The RLX retail index soared 6%. The RTH gained 4.6%. I'm sure a lot of it was short covering on Monday morning. The RTH hit our stop loss at $80.81.
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Wynn Resorts - WYNN - close: 40.71 change: +3.65 stop: 42.55 There is still a lot of short interest in WYNN and we got to see that with the short squeeze this morning. The close back above $40.00 is potentially bullish. I'm suggesting an early exit now. Our first exit was on Friday (May 22nd).
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