Long-Short Idea List: 04-25-19

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

AMZN – Amazon.com

• We recommended going long AMZN a few weeks ago as it broke out of its trading range.
• Remain long this week, but take profits heading into earnings.
• Sell 1/3 of position and hold balance. Use any earnings related weakness to add back into position around support at $1700
• Stop level is $1600

GOOG – Alphabet, Inc.

• We previously recommended going long GOOG as it broke above resistance following the December sell-off.
• Hold onto that position now, but like AMZN, take profits heading into earnings.
• Sell 1/3rd of position at current levels and hold balance.
• Look to add back into the position on weakness back at $1175.
• Stop-loss is currently $1125

MSFT – Microsoft Corp.

• We remain long MSFT in our Equity portfolio currently.
• Like AMZN and GOOG, MSFT is extremely extended and after good earnings yesterday, we are looking to trim some profits and wait for a pullback to add back into the position.
• Sell 1/3rd of position and hold the balance.
• Look to add to position at $115
• Stop loss is moved to $110.

CHRW – C.H. Robinson Worldwide

• After breaking the downtrend and holding support, CHRW is set to potentially move higher.
• Currently the position is not overbought and is close to registering a buy signal.
• Add a position to portfolios with a tight stop at $87

CVS – CVS Health Corp.

• This is a pure technical speculative trade. Keep a very tight stop.
• CVS is extremely beaten up and oversold after a brutal few months of selling.
• We are looking for a tradeable bounce in CVS back to the mid-80’s.
• Buy at current levels.
• Stop is set at $50 – honor thy stop.

SHORT CANDIDATES

JWN – Nordstrom

• JWN has remained under intense pressure and broke important support last week.
• Short at current levels.
• Target for trade is $38
• Stop-loss is set at $45

CAT – Caterpillar

• CAT had disappointing earnings today and suggested that China related weakness is likely more than markets are currently anticipating.
• This is a wait-and-see short play as you need a break below the bottom of the wedge.
• Short on a break below $130
• Target for trade is $110
• Stop loss is $140

TSLA – Tesla, Inc.

• Last week we recommneded shorting TSLA. As we said then:
  • “There is a high risk of disappointment in this earnings seasons report particularly as auto sales have declined.”
• TSLA missed earnings and revenue numbers yesterday.
• However, TSLA did promise to return to profitability in the future, uhm right, but was enough to get after hours TSLA-ites excited.
• The fundamental backdrop to TSLA remains poor and this is a $100 stock at best. But that thesis will take some time to play out.
• In the meantime, if TSLA rallies above $270 tomorrow, close out the short position for now.
• Otherwise, continue to hold short with a target to add to the position below $260 as instructed last week.

BT – BT Group

• BT continues to perform poorly and we have recommended shorting this position in the past.
• Short at current levels.
• Stop is set at $15.50
• Target for the trade is $13

VTR – Vertias, Inc.

• We recommended shorting VTR last week as it was close to triggering a “sell” signal.
• That signal has been triggered and VTR is not yet oversold.
• We blew through our initial $60 target so cover 1/2 of the position immediately.
• Stop is now moved to $62
• Position can be re-shorted on a failed rally to $61.50