Long-Short Idea List: 05-23-19

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

ALE – Allete Inc.

• ALE sold off to support recently and turned up and is testing previous highs.
• Buy at $83.50 with a target of $100
• Stop level is $77.50

AZN – Astrazeneca

• AZN sold off and broke support and is on a sell signal. However, we are currently seeing the early stages of a rotation into Healthcare so if AZN can break back above the 200-dma a trading position can be added.
• Currently AZN is oversold and is turning up.
• Buy at $39 with a target of $44.
• Stop-loss is currently $37

EGHT – 8×8, Inc.

• We previously recommended going long EGHT on a decent “trade” setup with a target of $23.
• That target was reached, so sell 1/3rd of the position and take profits.
• Stop-loss on balance of position is $22

GOOG – Alphabet, Inc.

• We previously recommended taking a position in GOOG on the break above the 200-dma.
• That rally has now failed and is retesting the 200-dma.
• For now GOOG remains on a buy signal which suggests a long-position can be entered with a decent risk/reward setup.
• Buy at current levels.
• Stop Loss is set tight at $1120

VZ – Verizon Communications

• VZ is a long position in our equity portfolio currently.
• With VZ testing a triple top, we are looking to add to the position on a break out above that resistance level.
• Buy on confirmed breakout (must hold above) $61
• Stop loss is set at $56

SHORT CANDIDATES

CAT – Caterpillar

• CAT recently broke below its consolidation pattern and is now triggering a “sell signal.”
• CAT is getting oversold short-term and is impacted from one-day to the next on “trade war” news.
• Look for a rally to $130ish to short CAT.
• Target for trade is $100
• Stop-loss is set at $135

GPS – Gap, Inc.

• The retail sector is and will remain under pressure from both the slowing economy and from the resurgence of the trade war.
• Short on any rally to $24
• Target for trade is $16
• Stop loss is $26

TSLA – Tesla, Inc.

• We recommended shorting TSLA a couple of weeks ago as it broke long-standing support. To wit:
• “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.”
• The break and furious sell-off did occur and now the brokerages are piling on.
• Our target was initially set at $190 which has now been reached so close out 1/2 of the position and look to re-short TSLA on any rally back to $250/

ROST – Ross Stores

• ROST is close to signaling a sell signal and is susceptible to both the trade war and consumer spending contraction.
• The set up currently for shorting is “not ideal.” Therefore, be a little patient and wait for a break of the 200-dma.
• Short at $92.
• Stop is set at $95
• Target for the trade is $77.50

AMC – AMC Entertainment

• Movie theaters are impacted by constrained consumer spending. Plus, with the continuing ramp up of online streaming services, the need to go to movie theaters is fading.
• The recent rally to $17 failed and AMC is now close to triggering a “sell signal.”
• The shorting setup is not great but there is a reasonable risk reward tradeoff.
• Short below $13
• Set stops at $15
• Initial target for trade is $9