Long & Short Plays With Dow Sitting Below 7.5K
Coinstar, Inc. (CSTR) is a multi-national company offering a range of solutions for retailers’ storefronts consisting of self-service coin counting; entertainment services, such as skill-crane machines, bulk vending machines and kiddie rides, and e-payment services, such as money transfer services, prepaid wireless products, stored value cards, payroll cards and prepaid debit cards.
CSTR gapped up big time recently on earnings. However once it reached the 200 dma it found resistance. It eventually did break it but is sitting just above it. Today the 200 dma provided a good support for it. Once its broken on the downside this becomes a potential short. The volume is drying out which indicates less buying interest. RSI is 70+ indiating overbought levels.
Buffalo Wild Wings, Inc. (BWLD) owns, operates and franchises restaurants featuring a variety of boldly flavored, made-to-order menu items, including the Buffalo, New York-style chicken wings spun in any of the Company’s signature sauces.
BWLD has a similar story to CSTR. For now it is sitting above the 200 dma. It will be interesting to see if it can hold above that level. Potential short once it breaks the 200 dma on the downside.
Ivanhoe Mines Limited (IVN) is a Canada-based international mining company with operations focused in Central Asia and the Asia Pacific region.
IVN is a mining stock that keeps popping every now and then. If you follow the previous trends, IVN pops have not lasted too long and they have been followed by sizable drops. Another pop is a potential short opportunity.
Watson Pharmaceuticals, Inc. (WPI) is a specialty pharmaceutical company engaged in the development, manufacture, marketing, sale and distribution of brand and generic (off-patent) pharmaceutical products.
Bio-tech stocks have a mind of their own. They don’t run with the overall market, but based on drug approvals. WPI had a huge up volume day which means this rally can continue. However once this trend reverses it goes down hard. Be patient and let this one go red first before shorting. Learn from the ARNA chart.
Anadys Pharmaceuticals, Inc. (ANDS) is a biopharmaceutical company focused to develop medicines in the areas of hepatitis C and oncology.
Another bio-tech stock that just wont stop. It broke out of its 2-3$ trading range and ever since been on a joy-ride. Once the stock starts trending down, go short. This has huge downside potential. It is up 255% in the last 3 months.
TeleCommunication Systems, Inc. (TSYS) develops and applies highly reliable wireless data communications technology, with emphasis on text messaging, location-based services, such as enhanced 9-1-1 (E9-1-1) for wireless carriers and voice over Internet protocol (VoIP) service providers, and secure satellite-based communication solutions for government customers.
TSYS provides an excellent short opportunity. This one did reverse today and could keep going lower based on past trends.
O’Reilly Automotive, Inc. (ORLY) is a specialty retailer of automotive aftermarket parts, tools, supplies, equipment and accessories in the United States. It sells its products to both do-it-yourself customers and professional installers.
ORLY is a potential long position. It gapped up huge on earnings result. The volume supported this runup. It also broke past its previous 31.5$ resistance. I expect the momentum to continue tomorrow.
Patterson Companies, Inc (PDCO) is a value-added distributor serving three markets: North American dental supply; United States companion-pet (dogs, cats and other common household pets) and equine veterinary supply, and the worldwide rehabilitation and assistive products supply market.
PDCO also gapped on earnings. I went long PDCO at 20.40$. I expect the run-up to continue, supported by heavy volume. It also broke past its 20$ resistance, which would now provide a good support. I intend to sell it in the 21.40 level which will provide the next resistance, with a stop loss below 20$.
Alliance Data Systems Corporation (ADS) is a provider of data-driven and transaction-based marketing and customer loyalty solutions.
ADS is purely speculative play. The stock is down 24% in the last 5 trading days, and in the red for last 9 trading days. This drop is overdone. RSI is below 20. I went long at 29.03$ today and expect to sell below today’s high (32$ level)
Disclosure: Long PDCO and ADS