New Split Updates
|
SBUX - Starbucks Corporation $42.44 (+1.56)
|
Folks don't just want their Starbucks coffee; they need their Starbucks coffee. It seems that people can't get enough of the stuff and are willing to pay handsomely for the gourmet blends and more exotic concoctions. Starbucks is only too happy to fill this demand. The caffeine pusher continues to expand by placing stores in everything from bookstores to grocery stores. SBUX appears to have built some nice support and is starting to rally on the heels of a split announcement. The 2:1 split will be made payable on April 27th, which is the day after earnings are to be released. This should give us plenty of time to enjoy a potential split and/or earnings anticipation run. Friday's close was just slightly above the important 200-DMA level of $42.28. New positions can be placed if SBUX can stay above this support. Another possible entry strategy would be to go long if SBUX can move above Friday's high of $43.56 on midday volume of over 1.4 million shares. A positive start to this week should cause the MACD to issue a buy signal, which would help confirm SBUX's return to a longer-term rally mode. Additionally, the OBV is starting to recover and the RSI is rising from a level that had previously indicated an oversold condition. SBUX should eventually find resistance at its 50-DMA of $46.09 but this leaves plenty of room for a 10% plus rally in the mean time. Our stops remain at $38.50 to guard against a reversal.
New Candidate Updates
|
EQT - Equitable Resources, Inc. $69.00 (+3.94)
|
Equitable Resources, Inc. got a boost from its addition to the S&P 400 as index funds are required to own the stock after Friday's closing bell. On Friday, shares of EQT traded as low as $67 before bouncing back to close at its intra-day high of $69 on volume of 1.66 million shares. Volume has been abnormally high over the past three sessions due to the S&P 400 addition and we do not expect the heavy volume to continue for much longer. Unfortunately, EQT may suffer a bit next week as short-term traders playing the addition unwind their positions and sell the stock. However, the S&P 400 is not a high-profile index so the effects should not be too severe. We are looking for a split announcement with the April earnings release or out of its next BoD meeting. The company has enough shares for a split and the stock is trading within previous range. Going forward, support has come in at Friday's intra-day low of $67 with stronger support at $66.19, the 10-dma. Resistance is now up to Wednesday's intra-day high of $70.50 and then possibly $72 or $73. A bounce off of $67 or a breakout above $70.50 on midday volume greater than 100,000 shares may be possible entry points. Our stops are holding steady at $63.40.
|
MKC - McCormick & Company $41.99 (+2.31)
|
McCormick & Company traded higher on Friday as the food sector regained its momentum. Shares of MKC hit an all-time high of $42.20 before pulling back to close at $41.99 on strong volume of 597,000 shares. The stock has broken through resistance on four times its average daily volume so it could continue to make new highs as we approach earnings season. The company currently has enough shares for a split and the stock is trading within historic split range. MKC announced its last three splits when the stock was trading in the $35-$45 range so we are looking for a split out of its next BoD meeting of with the June earnings release. In the meantime, support is the 5-dma at $41.26 with additional support at $40.68, the 10-dma. Resistance has moved up to the all-time high of $42.20 and then $43 or $45. Look for entry points on a bounce off of $40.80 or a breakout above $42.20 on volume of at least 80,000 shares by noon. We are keeping our stops at $38.75 to limit potential losses.
|
PFGC
- Performance Food Group $52.50 (+3.00)
|
PFGC is likely to be resistant to an economic slowdown because it is a major food processor and distributor. People still have to eat, no matter how severe the economic slowdown becomes. PFGC is fast becoming a split candidate now that the stock is trading in the $50's. The company's last split was nearly five years ago so it could be that PFGC is overdue for a split announcement. PFGC was pretty volatile last week. The stock spiked up to $54.38 and just as quickly pulled back to $48.75. These two prices will likely present the respective support and resistance levels for this coming week's trading. If Friday's momentum carries over to Monday, look to possibly enter a position if PFGC can cross over $54.38, especially if the stock enjoys midday volume over 70,000 shares. This move would be a breakout of an inverse head and shoulders formation, which is usually very bullish. The MACD is rising and this tells us that PFGC should continue trending higher. The Money Flow is outstanding, which also implies further gains for PFGC. It is also encouraging to see that the RSI has some room before PFGC would be considered overbought. Our stop remains firm at $46.00 to limit losses.
|
RDN
- Radian Group, Inc. $67.75 (+5.85)
|
The Radian Group soared to higher levels on Friday and took out a tough barrier at the intermediate high of $67.60. Even more impressive was the fact that the breakout unfolded without the assistance of a news release. This could be an indication that momentum players are keeping a close watch on the stock and are jumping aboard when RDN breaks above resistance. The intraday chart confirms this possibility, as volume has been picking up when the stock ascends through previous highs. What's more, we're impressed with good technical readings in both the MACD and OBV indicators, which convey a continuation to the uptrend. All of these factors make the daily chart quite compelling and lead us to believe that a run to the $70 mark could lie in store. To get us there, we'll look for daily volume to remain above the 3-month average of 461,500 shares when the stock moves higher. Should RDN encounter a couple of minor dips before its next leg up, we'll expect to see support at the February 14th high of $67.60, and just below at $65, bolstered by the 100-dma of $64.31. Resistance will be at Friday's intraday high of $68.39. Consider adding to positions if RDN breaks above resistance or rebounds off support on volume exceeding 230,000 shares traded by mid-day.
|
UHS
- Universal Health Services $88.30 (+5.45)
|
After stumbling out of the blocks at the start of last week, UHS made up for lost time and closed the week in stellar fashion. UHS, which owns and operates 47 hospitals across the country, may have been a beneficiary of a little end of the quarter window dressing. Health care stocks have become desirable within the investment community due to their reliable revenue stream and stable profits. The nice rally last week has increased the possibility that UHS will announce a split. The last split occurred in May of 1996 when the stock was trading more than $30 below current levels. The technical picture for UHS continues to improve, especially now that the stock has closed comfortably above its 50-DMA of $84.78. A move above Friday's high of $90.25 on at least 250,000 shares traded by midday may prove to be an excellent entry point. However, if the stock gaps up to $92.00 or higher on the open, it may be best to wait for a little pullback before entering a trade. The next resistance level for UHS is likely to be found at $96.00. The MACD is now decidedly positive and may be portending a nice long-term up trend. We also like the fact that the RSI is telling us that UHS has plenty of upside potential before becoming overbought. Stops remain firm at $80.00.
New Momentum Updates
|
THQI - THQ Incorporated $38.00 (+3.50)
|
THQ Incorporated traded in positive territory for most of Friday's session on news that Southwest Securities moved its price target on THQI from $37 up to $46, a 24% increase. Shares of THQI traded to an intra-day high of $38.69 before falling back to a close of $38 on volume of 787,000 shares. The stock has been consolidating over the past three sessions on lighter volume so THQI may spend some time in the $35-$40 range before it moves to new highs. For now, support is the 5-dma at $37.55 with stronger support at $35.38, the 10-dma. Resistance remains unchanged at Wednesday's intra-day high of $38.81 and then Tuesday's intra-day high of $39.94. Traders may consider starting new plays on a bounce off of $37.55 or a move above $38.81 on volume greater than 250,000 shares by noon. We are leaving our stops at $35 as downside protection.
Play Updates Index
