New Split Updates
| LOW
- Lowes Companies $72.75 +0.85 (-0.82)
|
Our home improvement retailer sold off in the early going on
Tuesday, but found good support at its 20-dma at $70.75 and
bounced higher. LOW closed the day with a slight gain of $0.85.
We will be looking for volume to pick up going forward into the
latter part of this week and for the MACD to issue a buy signal.
A few more up days like today and the MACD should go positive.
For now support remains at the 20-dma of $70.75 and resistance
has come in at $74.00. Therefore, traders should hold off on
getting into LOW until resistance at $74 is conquered on volume
of at least 3 million shares. Our stops remain at $68 to limit
downside risk.
New Candidate Updates
| BJ
- BJ's Wholesale Club $52.36 +1.16 (+1.12)
|
On Tuesday, BJ managed to close above resistance at $52 on good
volume of 600,000 shares. BJ also successfully tested its 5-dma
at $51.56 and bounced higher. Add to this the fact that BJ has
only weak resistance at $52.75 to deal with and we think you have
the recipe for another run higher in BJ. Of course, Tuesday's
upgrade of BJ from a "buy" to a "strong buy" by Lehman Brothers
doesn't hurt either. In addition to upgrading the stock, Lehman
raised its 12-month price target on the retailer to $62 from $55.
Traders that may be thinking about getting into BJ should wait
until the stock breaches $52.75 on volume that puts the stock on
track to do at least 650,000 shares for the day. We are raising
our stop to $50.00 to protect our gains thus far.
| CEFT
- Concord EFS $53.25 +0.48 (+0.91)
|
CEFT continues to display resilience in the face of adversity.
On Tuesday, CEFT marched higher, even as the averages plunged
into the red. CEFT reached an intraday high of $54.20 before
pulling back a bit and finishing at $53.25. We like the way that
volume has been building as the stock moves higher. The MACD is
also still portending a continuation of the current up trend, so
traders might want to initiate positions on a breach of $54 on
volume of at least 3.9 million shares for the day. We are
raising our stop to $51.50 to protect against a reversal.
| HRB
- H&R Block $63.25 -0.25 (-0.45)
|
Over the last week, HRB has been acting "toppy." This financial
services play has lost ground for the past three sessions in a
row. In addition, HRB's MACD is about to roll over, which is
generally a sign of an impending downtrend. Lastly, volume has
been picking up as the stock moves lower, which is generally a
blatant warning sign that sellers have taken over. Given the
writing on the wall, we would advise against initiating new
positions in HRB until the stock can close above resistance at
$64 on volume of at least 600,000 shares. We are keeping our
stops at $62.00 for now, but intend to boost them as soon as any
sort of breathing room opens up.
| MTG
- MGIC Investment $72.36 +0.36 (+0.96)
|
Our financial services play has been holding up well considering
that most banks, brokers and insurance plays have been wilting
lately. While MTG is not directly related to the banks and
brokers (it's a mortgage insurer), the stock still keys off the
same interest rate and consumer confidence data that the banks
and brokerage stocks have been. Looking at the chart, MTG has
now formed a symmetrical triangle formation and appears to want
to break to the upside. The stock has found good support in the
neighborhood of $71 and its MACD is still decidedly positive.
Traders looking to get into MTG should wait until the stock can
close above resistance at $73 on volume of at least 750 million
shares for the day.
New Momentum Updates
| BEBE
- BEBE Stores, Inc. $32.01 +0.39 (+1.21)
|
BEBE continues its march higher. The good news is that shares of
BEBE are ascending on increasing volume. The bad news is that
the stock is ripe for a pullback according to its stochastic.
While we don't think that any pullback will be sharp or
prolonged, we just want to get the warning out incase you see
this starting to occur. With the stock only 5% above its prior
base, it is by no means overly extended, however, we will caution
against chasing it any higher than $32.50, as the risk of a more
severe pullback increases after this point. We would rather see
the stock move sideways and digest its gains before moving
higher. That said traders could look to get into BEBE on a
pullback to support at $31 with a subsequent bounce. Our stops
remain at $27.00.
| WMI
- Waste Management $28.50 +0.45 (+0.06)
|
WMI did a tremendous about face on Tuesday, as shares plummeted
in the early going only to turn on a dime and close higher for
the day. WMI dipped as low as $27.38 before reversing course at
about midday. We were encouraged by the fact that the big block
trades occurred as the stock was heading higher in the afternoon
instead of when the stock was selling off in the morning.
Tuesday's action in WMI might have been the "cleansing" before
the next leg higher for the stock. Any weak shareholders
probably pulled the ripcord today, leaving only strong holders
that will probably not turn into sellers until much higher prices
present themselves. Those who might be thinking about adding WMI
to their portfolios could look to do so on a break through
resistance at $29 on volume of at least 2.5 million shares for
the session.
Play Updates Index
