Long-Short Idea List: 06-27-19

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

B – Barnes Group

• B has been basing for quite some time now and the “sell signal’ is close to reversing to a “buy.”
• With strong basing support at $51 the trading parameters are fairly tight.
• Buy at current levels.
• Target is $62.50
• Stop-loss is at $51

EOG – EOG Resources

• EOG has recently turned up from a very deep sell-signal and remains oversold.
• The trading setup is not ideal but a break above resistance should put $110 to $115 in reach.
• Buy at $95 with a stop-loss at $87.50

CVS – CVS Health Corp.

• We have stated several times that we like the fundamentals and business model of CVS. We just have not had a workable entry point for the position.
• That entry point may be approaching with the long basing period CVS has undergone.
• With the deep sell signal turning up, and remaining oversold, the entry point is looking much better.
• Buy at current levels
• Carry a tight stop-loss at recent lows around $52.
• Initial target is $62-65

DOV – Dover Corp.

• DOV recently sold off a bit but has rallied in recent days on hopes of a “trade deal” with China.
• We remain long the position in our equity portfolio but a breakout to new highs could see higher levels.
• Buy on a breakout above $98
• Raise stop-loss to $87.50

SHORT CANDIDATES

ADP – Automatic Data Processin

• ADP is grossly extended and with signs of weakness creeping into the employment picture, ADP is vulnerable.
• Setup for shorting is pretty clean.
• Short at current levels with a stop-loss at $168.
• Target is $150

CBS – CBS Corp.

• CBS continues to consolidate in a downtrend.
• Parameters for shorting remain very tight.
• Short on a break of $48
• Stop-loss is $51
• Target is $41

NRG – NRG Energy

• NRG has grossly lagged the Utilities sector as a whole. With Utilities very overbought the risk is to the downside for NRG currently.
• Short at current levels.
• Stop-loss is $36
• Target is $24

MU – Micron Technology

• MU rallied on Wednesday on better than expected earnings. However, that rally may be short-lived.
• It is very likely that with the trade-war continuing and the “sell signal” still intact, a retest of recent lows is likely.
• Short at current levels where both moving averages have converged.
• Stop-loss is $38-39
• Target for trade is $30