Amazon.com - AMZN - close: 85.68 change: +0.75 stop: 76.35 Shares of AMZN performed relatively well thanks to Goldman Sachs upping their price target on AMZN to $103. Traders bought the dip in AMZN at $83.13. We've been waiting for a pull back closer to $80.00. I know it's tempting to want to chase it now, especially with the late afternoon bounce in the NASDAQ but AMZN is quickly approaching its April highs near $86.00. I could see raising our entry point up toward $81.50ish but for now we'll wait for a dip near $80.00. If AMZN closes above $86.00 then maybe we'll re-evaluate. Our plan is to buy calls on a dip in the $80.50-78.00 zone. We're starting with a stop loss at $76.35 just under Friday's low. Our first target is $89.00. Our second target is $97.50. The P&F chart has produced a new buy signal with a $101 target. My time frame is about seven to eight weeks.
BHP Billiton Plc - BBL - close: 48.70 change: -2.82 stop: 46.40 The commodity stocks were getting crushed today thanks to a big bounce in the U.S. dollar. After closing at multi-month highs yesterday BBL lost 5.4%. Traders bought the dip near the $48.00 level, which was supposed to be support and it held. I could see launching new positions here. 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.
Flowserve - FLS - close: 75.96 change: -2.43 stop: 69.20 I warned readers to wait for a dip near $75.00 or the $73.50 level. Shares pulled back to $75.00 today. This looks like a new entry point to buy calls. FLS has hit our first target. We're now aiming for $84.40. More conservative traders may want to raise their stops toward the $72.00-73.00 zone.
iShares China ETF - FXI - close: 38.02 change: -0.69 stop: 35.75 The FXI was not immune to the widespread profit taking in U.S. markets even though the Chinese market was up on Wednesday. Shares lost about 1.8%. I'm not suggesting new positions at this time. Shares have exceeded our first target and came close to hitting our final target at $39.90.
SPDR Gold Trust - GLD - close: 94.41 change: -1.95 stop: 89.90 The big oversold bounce in the dollar today sparked some profit taking in gold. The GLD lost 2% and fell back toward its rising 10-dma. 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.
Intl.Bus.Mach. - IBM - close: 106.49 change: -0.34 stop: 101.90 Entry point alert! IBM performed pretty well today. The stock traded down toward the $105 level found support and rallied back to only a minor loss. Our entry point to buy calls was hit at $106.25. If you missed it I would still buy calls right here. There is potential resistance near $110 but I'm setting our first target at $113.50. Our second target is $118.50. My time frame is seven to eight weeks.
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iShares Fincl.Srvcs - IYF - close: 43.09 change: -0.52 stop: 41.20 Financials are holding up reasonably well. The short-term technical indicators are mixed after a two-day decline. Yet the trend of higher lows is still intact. Our aggressive trade still looks okay here but we need to lower our first target from $46.00 to $45.50 because of the falling 200-dma, which could be technical resistance. Today's dip might be another entry point for the aggressive trader. An alternative is to wait for another dip near the rising 30-dma (about 41.80). We'll take some money off the table at $45.50 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: 167.51 change: -0.88 stop: 158.90 We've been waiting for a dip near $160.00 before launching new call positions. However, today's action may be the entry point we've been waiting for. The stock spiked down to $162.25, under its 200-dma, and powered back to $167.50. Traders may want to consider buying calls now and placing their stop just under today's low. Actually more conservative traders, if you haven't exited yet, may want to raise their stop toward today's low. 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. I want to remind traders that this is an aggressive trade. MA can be very volatile and the technical picture right here isn't very bullish.
Mobile Telesys - MBT - close: 40.07 change: -4.01 stop: 37.40 The profit taking in MBT was rather abrupt. The stock lost 9% and plunged right back toward round-number support near $40.00 and technical support at its 10-dma and exponential 200-dma. Exacerbating the decline in MBT was an analyst downgrade. Citigroup downgraded Russian stocks from "overweight" to "underweight" claiming they no longer look undervalued any more. I am still bullish on MBT and would use this dip or a dip near $38.00 as a new entry point to buy calls. Our first target to take profits is $44.95. We do have a second target at $49.00 but that could take a while to reach. Broken resistance in the $39-40 zone should offer new support. I'm raising our stop loss to $37.40.
Precision CastParts - PCP - close: 83.42 change: -2.58 stop: 79.85 PCP pulled back toward its 10-dma during Wednesday's market decline. I would use this dip as an entry point to buy calls or you can wait for a new bounce over $84.00 (or $85.00) to launch positions. 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.
Research In Motion - RIMM - close: 80.48 chg -2.13 stop: 74.85 Short-term traders may want to reconsider their possible entry points in RIMM. The late day rebound in the NASDAQ makes me want to buy calls on RIMM today with its dip toward $80.00. However, waiting for a dip toward its early May highs near $78.00 would offer a better risk/reward trade. I'm going to stick to our plan. Buy calls on a dip at $78.00. We'll use a stop loss at $74.85. Our first target is $86.90. We want to exit ahead of the June 18th (unconfirmed) earnings report.
Editor's Note:
Reliance Steel - RS - close: 37.94 change: -2.11 stop: 35.75 Today's pull back is good news. We now have an even better entry point to buy calls on RS. Shares actually gapped open lower at $38.98 altering our official entry. My first target is $44.75. My second target is $49.00. My time frame is about eight weeks. FYI: The P&F chart is bullish with a $53 target.
Visa - V - close: 68.23 change: +1.42 stop: 65.45 Visa showed some relative strength today. If the market rallies from here there is a good chance that V will breakout from its trading range soon. 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. I'm listing a second target at $79.00. The P&F chart is very bullish with a $95 target. NOTE: We want to buy the July or September calls. I prefer the $70 or $75 strikes.
MDC Holdings - MDC - close: 29.82 change: -1.24 stop: 33.55 The homebuilders continue to slide. TOL reported earnings this morning and investors sold the news. The DJUSHB home construction index lost 4.9%. Shares of MDC gave up almost 4%. Our first target is $27.75. Our second target is $25.15.
Northrop Grumman - NOC - close: 47.57 change: -0.71 stop: 49.65 *new* The trend of lower highs is bearish but NOC hasn't made a lot of progress. The stock is now testing technical support at its 50-dma. If it can close under $47.00 we should be in good shape. Please note that I'm lowering our stop loss to $49.65. 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: 65.44 chg: -0.72 stop: 70.16 RKH is inching lower toward support but it hasn't broken yet. I'm not suggesting new bearish put plays at this time but a breakdown under $64.00 can be used as a new bearish entry point. Look for possible support at the 50-dma or the $60 level. Our first target is $58.50 and then at $54.00.
Toll Brothers - TOL - close: 18.24 change: -1.29 stop: 20.21 TOL reported earnings this morning. The results were 2 cents worse than analysts' estimates. The company lost 83.2 million in its second quarter versus a $93.7 million loss a year ago. These results reflect a $119.6 million pre-tax write down. The stock opened at $19.47 and plunged to a 6.6% decline. Our target is $16.25.
(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: 94.41 change: -1.95 stop: n/a The U.S. dollar, which was extremely oversold, finally bounced and it sparked some profit taking in gold. The GLD lost 2%. We have less than three weeks left before June options expire. More conservative traders may want to consider an early exit soon. 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.
Silgan Holdings - SLGN - close: 45.55 change: +0.24 stop: 46.01 I am giving up on SLGN as a put play. The stock did not see any follow through lower once it broke the $45.00 level a few days ago and now it's showing relative strength on a day like today. I'm suggesting an early exit. Let's deploy our capital somewhere else.
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