Long-Short Idea List: 06-13-19

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

BMY – Bristol Meyers

• This is not a great long-term set up but for a short-term trade there is an opportunity.
• BMY is very oversold and is close to registering a short-term buy signal.
• Buy BMY at current levels.
• Target is $52
• Stop-loss is at recent lows of $45.

CVS – CVS Health Corp.

• We had an unsuccessful trade in CVS previously. We stated that while we like the fundamentals and the business model, the price was simply not cooperating.
• CVS is now extremely oversold and has been basing for almost 3-months.
• Buy 1/2 position at current levels.
• Buy the second 1/2 position on a buy signal and break above $58
• Stop-loss is set at $52.

DEO – Diegeo PLC

• We previously recommended a long-position in DEO back in January.
• The trade has gotten crazy overbought
• Take profits and reduce overall weight to 1/2 position and wait for a correction to add back into it.
• Stop-loss is $155

INTC – Intel Corp.

• INTC had a very sharp correction following earnings and the company has been basing along important support.
• The “sell signal” and the stock are very oversold.
• This is a decent trade setup on INTC with a target of $52-54
• Buy position at current levels with a very tight stop at $43

JNJ – Johnson & Johnson

• JNJ took a previous hit due to their settlement over “talc.” However, as we stated then, that settlement was a non-event for the company and the stock has completely reversed the sell-off.
• The breakout from the consolidation is bullish and sets JNJ up for a further advance. We remain long the position in our equity portfolio.
• Look to buy, or add to, JNJ on a break above resistance at $142.
• Stop loss on new positions is $135

SHORT CANDIDATES

AMTD – TD Ameritrade Holding Corp.

• AMTD is not looking good.
• With a sell signal being triggered and the downtrend holding firm, it looks like AMTD is going to break to the downside of this consolidation pattern.
• Look to short AMTD on a break below $50
• Stop-loss is set at $54
• Target for trade is $40.

CAT – Caterpillar

• CAT is a casualty of the trade war with China ultimately.
• The break below the consolidation pattern combined with the onset of a sell-signal suggests lower prices.
• The current bounce is likely a decent short set up.
• Short CAT at current levels.
• Stop-loss is $132.50
• Target is $100

CRM – Salesforce.com

• CRM is just stupidly overvalued and is ultimately going to be one of the great shorts.
• The current topping process continues combined with a current sell-signal following a bounce.
• Short on a break of support at $150
• Stop-loss is $160
• Downside target is $120

EIX – Edison Intl., Inc.

• The Utility space has been a clear winner but not so much for EIX
• EIX is close to triggering a sell signal and remains modestly overbought.
• Short EIX below $59
• Target for trade is $52
• Stop-loss is $63

EMN – Eastman Chemical Co.

• The trade war has not been kind to basic material companies and EMN is no exception.
• On a newly issued sell signal following a brief bounce, more downside is currently likely.
• Short on a break of previous support at $67.50
• Stop-loss is $75
• Target for trade is $60
• The short has now hit our previous targets and is oversold.
• Close out the short-position and look to re-enter on a failed rally to $14.