New Split Updates
| LOW
- Lowes Companies $73.57 (+4.27)
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Lowes closed the week out with a bullish hammer formation that has us thinking that next week's trading could be kind to our retail play. In addition, the S&P Retail Index (RLX.X) closed up 10 points on Friday to 906.76, keeping the index over support of 900. Turning to LOW's chart, we see that volume during LOW's Friday pullback was very light, with only 800,000 shares changing hands. This tells us that sellers had very little conviction. Add to this is the fact that LOW's MACD just went positive and you have the recipe for another leg higher. However, traders wishing to enter LOW should wait until the stock can break above resistance at $74.00 before committing any capital to this play. For reference, support should come into LOW around $72.50.
New Candidate Updates
| BJ
- BJ's Wholesale Club $51.24 (+2.93
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On Thursday we spoke of a pullback buying opportunity in BJ and whaddaya know it came to fruition on Friday. We warned of a pullback to $50 and recommended that traders pick up the stock on a bounce off this support level. On Friday, BJ opened at $50 and headed higher throughout the rest of the session. While BJ still has resistance at $52.00 to deal with, it is now looking technically stronger than on Thursday. That said, traders considering opening new positions in BJ should now wait until the stock breaches resistance at $52 before pulling the trigger.
| CEFT
- Concord EFS $52.61 (+2.01)
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CEFT appears as if it has officially launched itself into rally mode. Even though the NASDAQ ended down almost 50 points on Friday, our play managed to close up by $0.28. However, the stock did encounter resistance at $53, so we will keep an eye on this level going forward into next week. Volume was light on Friday's advance, so a retest of the $51.50 level is not out of the question in the near future. Volume becomes important as the stock advances higher. We have not seen a 5 million plus volume day since the first week of May. Traders thinking about opening a new position in CEFT could look to do so on a bounce off $51.50 or a breach of $53.00. Volume on either of these moves should be close to 2 million by midday.
| HRB
- H&R Block $63.70 (+3.98)
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It looks like the $64 level is setting itself up to become serious resistance for our tax service play. The stock has tried breaking through $64 four days in a row, but has been turned back on each occasion. However, we are still encouraged that HRB can continue higher due to the fact that the only above average volume days this week came as the stock was advancing. Traders wishing to open a new position in HRB should wait until HRB can close above $64 on volume of at least 600,000 shares for the day. We are moving our stop on this long time play up to $62 to protect our profits.
| MTG
- MGIC Investment $71.40 (+4.56)
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MTG continues to sell off on light volume. Friday say the stock lose $0.36 on volume of only 310,000 shares. The good news is that the stock has been putting in higher lows, so the up trend remains intact. In addition, even though MTG lost ground on Friday, it still closed within the upper half of its daily range, indicating that there were some buyers that emerged. We will be watching for support at $70.50 to hold up in the near term and for the MACD to remain positive. If you are thinking about adding MTG to your portfolio, look to go in with a half position on a break above $72. You can add to the position if the stock can breach $74 on good volume of at least 750,000 shares for the day
| SRDX
- SurModics, Inc. $57.75 (+4.75)
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Interestingly enough, SRDX made Investors Business Daily's Friday list of stocks with the highest combined earnings per share rating and highest relative price strength. They must have read the Splittrader new play list this week! SRDX has indeed been strong this year. In fact, on Friday, shares of SRDX looked as if they were going to head for a retest of support at $54.25 before they turned around and headed higher by $1.45 to close at $57.75. We still like how the stock is acting and just hope that next week bring a bit more volume into our chemical play. That said traders should look for a break above $59 on volume of at least 200,000 shares before initiating a new play in SRDX.
New Momentum Updates
| WMI
- Waste Management $28.44 (+0.64)
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WMI had a lazy day on Friday. The stock traded only 999,000 shares and was stuck in a tight intraday range of just over $1.00. The good news is that buyers showed up at the $28.25 level three times during the session to drive the stock higher. Conversely, intraday resistance came in at $28.45. We won't take too much from Friday's trade, however, due to the NYSE outage and the light volume. But we will note that WMI has yet to sink back into its base. This tells us that buyers are still supporting the stock. Going forward, traders might want to consider opening a position in WMI if the stock can break up through resistance at $29 on volume of at least 2.5 million shares.
Play Updates Index
