Long-Short Idea List: 04-11-19

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

GDX – Gold Miners ETF

• We have owned gold-miners for a while with expectations the Fed will mis-step and drive investors toward safehavens like gold. That likelihood is becoming more likely.
• Currently on a buy signal, GDX has been running along the 50-dma moving average support. A break above $23 will likely see higher prices.
• Buy at $23 with an initial target of $25
• Stop level is $22

GS – Goldman Sachs Group

• GS is trying to break above the 200-dma with the 50-dma close behind to cross above it.
• Currently on a “buy” signal and not tremendously overbought, there is upside to the position currently.
• We added a position to our long-short portfolio at $202
• We have an initial target for $215-220.
• Stop-loss is currently $190

EGHT – 8×8, Inc.

• EGHT is not a fundamental play by any stretch of the imagination, however, for a “trade” there is a decent setup.
• Just triggering a buy signal and with the 50-dma crossing above the 200-dma, there is upsdie to recent highs.
• Buy at current levels.
• Target for trade is $23
• Stop-loss is $19.50

VLO – Valero Energy Corp.

• VLO is in technically and fundamentally in a good
• Having just triggered a buy signal recently, and starting to recover from an oversold condition, the technical setup for a trade is good.
• Fundamentally, VLO benefits from positive crack spreads and the recent run up in oil prices should bode well for earnings.
• We took on a position in the long-short portfolio and will add to the position if our thesis plays out.
• Stop Loss is set at $85

WELL – Welltower, Inc.

• WELL has consistently tested and bounced off of the running 50-dma.
• This is a very tight trade with a target of $79-80
• Buy at current levels.
• Stop is set at $75

SHORT CANDIDATES

BRK.B – Bershire Hathaway B-Shares

• With BRK.B in a fairly tight consolidation range, our expectations is that the HNZ debacle from last quarter is not yet behind them.
• Furthermore, BRK.B has failed to perform with the rally in the market which makes it susceptible if the market declines.
• Short at current levels.
• Target for trade is $190
• Stop-loss is set at $206

WFC – Well Fargo & Co. (AKA “Wiley F$%#@*! Criminals”)

• WFC continues to erode due to scandal after scandal from their actual criminal activities conducted over the last several years.
• This is finally started to work its way through their system and customers are moving to other banks. Assets under management are declining and they will likely report a “not so great quarter.” It will be their outlook for redemption which may save the bank in the near term.
• The recent failure at the 50-dma suggests lower prices in the near-term.
• Short at current levels
• Target for trade is $44
• Stop loss is $50

TSLA – Tesla, Inc.

• TSLA has continued to struggle with cash burn, production, bad press, and issues with the SEC.
• There is a high risk of disappointment in this earnings seasons report particularly as auto sales have declined.
• TSLA continues to struggle in a downtrend of the 50-dma and the $260 level is extremely critical support.
• However, if the $260 level is broken, the downside will be fast and furious and unshortable at that point.
• Short at current levels with a stop @290
• Add to the position on a break below $260
• Target is initially set at $190

UAA – Under Armour, Inc.

• UAA has struggled during the entirety of the rally from the December lows.
• Currently the setup for a short is not great, but there is a decent expectation of an earnings related disappointment particularly if recent retail sales reports are accurate.
• Short at current levels.
• Stop is set at $23
• Target for the trade is $17

VTR – Vertias, Inc.

• VTR is very close to triggering a “sell” signal and is extremely overbought.
• After a failure at multiple tops, look for a break below $62 combined with a confirmed sell signal to enter the short.
• Short below $62
• Set stops at $64.50
• Initial target for trade is $60