New Split Updates
| LOW
- Lowes Companies $72.38 (-1.19)
|
Lowes continued to slide lower on Friday, as the stock lost $0.55
to $72.38. The stock is right on the edge of starting to worry
us. It is sitting right above its 20-dma of $71.61 and if it
breaks down through this level next week, it will more than
likely test support at $70. In addition, volume has been
accelerating as the stock has been moving lower, another sign
that sellers may be gaining the upper hand. Traders who might be
interested in getting into LOW should wait until the stock can
close above resistance of $74 on volume of at least 3.5 million
shares before committing capital to the home improvement
retailer.
New Candidate Updates
| BJ
- BJ's Wholesale Club $52.80 (+1.56)
|
BJ gapped up at the open on Friday and then proceeded to sell off
for the rest of the session. While the stock did breach $53
early on, it could not hold at these levels. That is precisely
why it is important to wait until the end of the day to see if a
stock is going to close above a key level. For instance, if BJ
was looking strong and holding above $35.20 with 15 minutes to go
in the session, it would have been a buy. That being said,
Friday's weakness was halted at support at $52.75, so we are
still bullish on this stock going into next week. Traders
looking to get into BJ should again wait for a decisive close
above $53 on volume of at least 750,000 shares before pulling the
trigger. We have decided to move our stop up to $51.50 (just
below the 10-dma of $51.60) to protect against a reversal.
| EPIQ
- EPIQ Systems $36.00 (+3.70)
|
EPIQ found good support at its 5-dma at $34.50 on Friday. In
fact, it retraced to this level, only to bounce higher to end
Friday's session up $0.90. While the stock did not breach
resistance at $36.94, it did go a long way towards convincing us
that it still has some pop left in it. Traders should still look
towards a break above $36.94 on volume of at least 60,000 shares
by noon as the next best entry point into our software play. In
addition, should we get further signs of economic weakness next
week, watch how EPIQ reacts to the news. Shares of EPIQ stand to
benefit from a weaker economy, so we need to see EPIQ advance on
bad economic news. If we don't see this, the warning flag comes
out. Our stop remains at $31.00 to limit downside risk.
| ESI
- ITT Education $42.80 (-0.64)
|
ESI ended Friday's session flat, which is a lot better than the
broader market. By closing flat, ESI still remains under both
its 5 and 10-dmas. The good news is that plenty of buying
support came in at the $42.80 level, which keeps ESI well within
its current flag pattern. However, we would of course like to
see ESI move closer to the top of its flag to give us some
breathing room. Going into next week we do not want to see ESI
loose support at $42, nor do we want to see volume pick up as the
stock stagnates. We will look for a break above resistance at
$44 on good volume of at least 250,000 shares for the day as the
next best entry scenario.
| MTG
- MGIC Investment $74.38 (+2.98)
|
It was all systems go for our mortgage insurance play on Friday.
The stock closed right at its high of the day, which also happens
to be a new high for the stock. MTG gained $2.17 on great volume
of 870,000 shares. This volume figure becomes even more
impressive when you consider that average trade for the stock is
740,000 shares and that Friday's have been typically very low
volume days on the NYSE. Friday's move above resistance at $74
completes a breakout from an ascending triangle. Our price
target now becomes $78 according to the height of the triangle.
Traders who might be interested in getting into MTG could look to
do so on a strong move above Friday's close of $74.38 on volume
of at least 300,000 shares by midday. We are moving our stop up
to $71.90 (just below support at $72) to lock in gains.
New Momentum Updates
| BEBE
- BEBE Stores, Inc. $30.43 (-0.37)
|
Shares of BEBE got a boost on Friday, en in the face of general
market weakness. We are encouraged by the fact that the stock
bounced off Thursday's low of $29.85 and ended the session higher
by $0.33. This move might have prevented the MACD from issuing a
sell signal in addition to creating a near term floor for the
stock. However, before we get too excited, volume on Friday was
a paltry 85,000 shares, not enough to convince us that buyers are
still active. That said traders could look for a break above the
previous closing high of $32.01, on volume of at least 100,000
shares by midday as the next best entry point.
| WMI
- Waste Management $29.49 (+1.05)
|
WMI pulled back a bit on Friday, but did so on decreasing volume.
Volume slowed to 4.3 million shares from Thursday's 5 million
shares. WMI started the day on the wrong foot, but then gained
some traction at 10:30 after which time it proceeded to shoot up
towards the $30-level. However, WMI ran into resistance at
$29.98 and sold off for the rest of the session. The $30-level
look like it might pose a near term problem for the stock, so
more conservative traders may wish for a break above this
resistance on strong volume of at least 3.5 million shares for
the day. As a side note, WMI had their investor meeting in
Houston, Texas on Thursday and outlined ways to increase
shareholder value. In addition, they outlined how they could
increase revenues and gain market share. The Street must have
been at least somewhat pleased by what CEO Maury Meyers had to
say, since the stock has been holding up well since the meeting.
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