Long-Short Idea List: 01-17-19

Each week we produce a chart book of 5 to 10 stocks which have hit our watch list for potential additions to our long-short equity trading portfolio.

We have broken down the list into two sections – Long and Short and have provided targets for potential actions.

Importantly, these equities are not part of our long-term investment themes and are far trading purposes only. We may, or may not, implement any of the ideas on this list. They are simply for consideration.

Also, it is entirely possible that our long-term themed equity model could be long a position which could show up on the “short-idea” list temporarily. Trading and investing, while having many commonalities, are different based on time frames and objectives and are not always handled exactly the same.

HOW TO READ THE CHARTS

There are four primary components to each chart:

• The price chart is contained within the shaded area which represents 2-standard deviations above and below the short-term moving average.  
• The Over Bought/Over Sold indicator is in orange at the top.
• The Support/Resistance line (green) is the longer-term moving average which also acts as a trailing stop in many cases.
• The Buy / Sell is triggered when the green line is above the red line (Buy) or vice-versa (Sell).

LONG CANDIDATES

ABT – Abbott Laboratories

• Stock has held the long-term moving average as support and is currently consolidating its 2017-2018 gain.
• Short-Term Positioning: Bullish
  • Add to existing position: $71
  • Stop-loss is $66

AMT – American Tower Corp.

• Outside of only a small correction in December, AMT remains a strongly trending candidate.
• Long-term support remains solidly intact.
• Short-Term Positioning: Bullish
  • Buy either on pullback to $160 or on breakout above $165
  • Stop-loss is currently $150

AVGO – Broadcom, Inc. 

• The correction in AVGO came early last year. 
• AVGO is now back on an important “buy signal” and above long-term supports. 
• Short-Term Positioning: Bullish
  • Buy on either a pullback to $240 or above $260.
  • Stop-loss is currently $230

FL – Foot Locker, Inc.

• Long-term bullish trend line continues to hold.
• FL is now back on a “buy signal”
• Short-Term Positioning: Bullish
  • Buy on “breakout”: $60
  • Stop-loss is currently $47.50

HSY – Hershey Foods Corp.

• Long-term bullish trend line continues to hold.
• HSY still on a “buy signal” but it is weakening.
• Short-Term Positioning: Bullish
  • Buy with an initial target of $112
  • Stop-loss is currently $104

SHORT CANDIDATES

ALB – Albemarle Corp.

• ALB broke critical support in December.
• Has now triggered a “Sell Signal” and is looking to break recent support.
• Short-Term Positioning: Bearish
  • Short @ current levels
  • Stop-loss is currently $77

GT – Goodyear Tire & Rubber

• Failed at overhead resistance withing a long-term downtrend.
• Triggered a new “sell signal” and broke recent lows.
• Short-Term Positioning: Bearish.
  • Short at current levels.
  • Stop-loss is currently $22.50

IFF – International Flavors & Fragrances

• IFF continues to struggle.
• With a new “sell signal” close to registering look for short opportunity.
• Short-Term Positioning: Bearish
  • Short on a break below $132.50
  • Stop-loss is currently $140

LYB – LyondellBasell Industries

• Recent rally failed at downtrend resistance.
• LYB remains on a deep “sell signal” currently with very “bearish” momentum.
• Short-Term Positioning: Bearish
  • Short at current levels.
  • Stop-loss is currently $87.50

SHW – Sherwin Williams Co.

• Recent rally failed at downtrend resistance.
• SHW on a “sell signal” currently with weak price momentum.
• SHW also forming an important “head and shoulders” formation.
• Short-Term Positioning: Bearish
  • Short at current levels and add to short at $370
  • Stop-loss is currently $420