Wk4: Stocks to Watch

20 Jan

A sideways market creates an environment less likely to produce breakouts or breakdowns in individual stocks so keep that in mind for the coming week. Keep these tickers on your radar, wait for price pattern confirmation and keep an eye on the volume for each.

BMRN (long)
Ascending Triangle
Entry: Waiting for pullback, buy above the high of the low day
Stop: Place stop under the pullbacks low
Target: $23
Option Play: FEB 20 calls
Comments: BMRN recently broke out of resistance on pretty good volume, if we see a pullback in this stock we will likely enter. It has shown relative strength to the market over the past few days along with increasing volume.

Gild (long)
Ascending Triangle
Entry: $48.75

Stop: 46.70
Target: $52

Option Play: FEB 47.5 or 50 calls
Comments: GILD is resting on its main moving averages (10, 20, 50 and 200-Day). If we see prices begin to move higher, this should be a very easy to manage trade. Keep in mind the $50 psychological resistance level and watch for hesitation by bulls or bears to step in at that point.
SINA (short)
Bounce off Resistance
Entry: $21.14, a move below Friday’s low
Stop: $22.59
Target: $19, watch to see if we get a bounce or breakdown at the $20 level
Option Play: FEB 22.5 puts, this stocks option volume and open interest are quite low.
AXP (short)
Descending Triangle
Entry: $17.50 area Stop: $20-21, or previous high
Target: $15, $10, this is a very wide triangle over a two month period so we may see a break lower, then a small rally before the final target is reached.
Option Play: FEB 17.50 puts, tight spread and high open interest.
Comments: We have been watching AXP for the last few trading sessions and it has performed very poorly on higher volume, if we see a small rally back to the down trendline one last time, the bears should step in and the stock should break lower making for a great entry point!

RL (short)
Bounce off Resistance
Entry: $41-$42 area Stop: Last swing high before moving lower
Target: $38.50
Option Play: FEB 45 or 40 puts, the 45’s will have more intrinsic value, but look to the volume and spreads upon entry.
Comments: RL finally broke down below its $42 support level last week which will now act as new resistance allowing for an easily managed trade.

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