Potential Short Plays After Dow Put Up A Great 379 Points Show
Sturm, Ruger & Company, Inc. (RGR) is principally engaged in the design, manufacture and sale of firearms to domestic customers. The Company’s design and manufacturing operations are located in the United States and substantially all product content is domestic. The Company offers products in four industry product categories: rifles, shotguns, pistols and revolvers. Its firearms are sold through a select number of independent wholesale distributors, principally to the commercial sporting market.
RGR saw a sell-off in the afternoon. The momentum is fading and we could see a trend reversal. Below $10.00 this could provide a good shorting oppurtunity.
Smith & Wesson Holding Corporation (SWHC) is a manufacturer and exporter of firearms. The Company manufactures an array of pistols, revolvers, tactical rifles, hunting rifles, black powder firearms, handcuffs, and firearm-related products and accessories for sale to a variety of customers, including gun enthusiasts, collectors, hunters, sportsmen, competitive shooters, protection focused individuals, law enforcement agencies and officers, and military agencies in the United States and worldwide
SWHC held up stronger than RGR in the morning, but eventually caught up with RGR. SWHC broke past $4.50 in the morning, spiking to $4.80, but it provided a strong resistance again and started reversing. Once it broke past the $4.50 mark on the downside, there was no looking back. SWHC dropped all the way to $3.884 before finishing at $4.22. Thursday it reports earnings and only reason i would stay away from shorting it.
Big Lots, Inc. (BIG) through its wholly owned subsidiaries is a national broadline closeout retailer. As of February 2, 2008, the Company operated a total of 1,353 stores in 47 states. The Company’s merchandising categories include Consumables, Home, Furniture, Hardlines, Seasonal, and Other.
BIG faces its resistance at $19.00. This does provide shorting oppurtunity if stays below the $19.00 resistance.
Longtop Financial Technologies Limited (LFT) is a software developer and information technology (IT) services provider targeting the financial services industry in China. The Company develops and delivers a range of software solutions with a focus on meeting the IT needs of financial institutions in China.
LFT did break past its $18.00 resistance and closed above it. This indicates that the bulls are still in control. Notice the big volume decline, indicating weaker buying interest. This provides scalping oppurtunity, both long and short. Go short on the break of $18.00 on the downside or go long above $18.00 with stop loss on the break.
Advanced Semiconductor Engineering, Inc. (ASX), along with its subsidiary ASE Test Limited (ASE Test), is an independent provider of semiconductor packaging and testing services. The Company’s services include semiconductor packaging, design and production of interconnect materials, front-end engineering testing, wafer probing and final testing services. ASE Inc. offers a range of semiconductor packaging and testing services.
ASX continues to keep going higher, trading up last 6 days. It did take out the critical $2.00 resistance earlier. Now it faces another critical resistance at $2.50 range. I expect this should provide shorting oppurtunity. Go short below $2.50, with stop loss on the break of it. Cover before $2.00 since that would now provide good support.
ArcSight, Inc. (ARST) is a provider of compliance and security management solutions that protect enterprises and government agencies. Its products assist customers to comply with corporate and regulatory policy, safeguard their assets and processes and control risk.
ARST enjoyed a rally up on solid earnings. However the buying interest is fading as clearly indicated in the volume trend. $12.00 holds key resistance for it, and it has failed twice to break above it and hold up. This is a potential short around today’s high $11.80 with stop loss on break of $12.00.
Leap Wireless International, Inc. (LEAP) is a wireless communications carrier that offers digital wireless service in the United States under the Cricket brand. Cricket service is offered by Cricket, a wholly owned subsidiary of Leap, and is also offered in Oregon by LCW Wireless Operations, LLC (LCW Operations), and in the upper Midwest by Denali Spectrum Operations, LLC (Denali Operations).
LEAP chart suggests strong buying has been followed with strong selling. I don’t expect any different result this time around. It will face its critical resistance at $35.00 level which also was close to its previous high as well as its 200 dma. I expect it to reverse below that level. Keep watching.
iPCS, Inc. (IPCS) is a holding company that operates as a PCS Affiliate of Sprint Nextel Corporation (Sprint) through three wholly owned subsidiaries, each having its own affiliation agreements with Sprint Nextel Corporation (Sprint PCS). A PCS Affiliate of Sprint is an entity whose sole or predominant business is operating (directly or through one or more subsidiaries) a personal communications service business pursuant to affiliation agreements with Sprint Spectrum L.P. and/or its affiliates or their successors.
IPCS is up on recent earnings news. It has broken past all its key resistance and sitting above $10.00. Its next key resistance would be at $11.00. Keep watchin this stock. RSI indicates overbought levels, but lets wait for the selling to start before taking a short position.
Casey’s General Stores, Inc. (CASY) operates convenience stores under the name Casey’s General Store in nine Midwest states, primarily Iowa, Missouri and Illinois. The stores carry a selection of food (including freshly prepared foods, such as pizza, donuts and sandwiches), beverages, tobacco products, health and beauty aids, automotive products, and other nonfood items.
CASY posts an excellent Q3, causing the stock to fly 27%. Generally I would stay away from shorting companies that report good earnings. However as charts show, today it tried breaking past its 200dma but it did not succeed, closing 0.85cents below its day’s high. Could this resistance hold ? Can it make a second attempt at breaking past it ? If it fails to break above it again, this provides shorting opprtunity for a quick scalp.
Related Posts: