Long-Short Idea List: 07-11-19

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

BRK.B – Berkshire Hathaway

• If the market is going to continue its rally on the expectation of “Fed rate cuts” then BRK.B is a way to play the broader market in a stock position.
• Just turning up onto a buy signal from fairly low levels is attractive.
• Buy at current levels.
• Stop level is $205

GOOG – Alphabet, Inc.

• We previously recommended going long GOOG, then shorting GOOG, and now we are suggesting going back long again.
• GOOG has gotten oversold and is lagging the rest of the tech market currently. With earnings season approaching there is upside potential for a trade.
• Buy at current levels as stop loss levels are very close.
• Stop-loss is currently $1100

CRM – Salesforce.com

• CRM has been holding support and consolidating for the last few months.
• With earnings season approaching, an upside surprise could give the position a lift and stop-loss levels are very close.
• Add a position at current levels.
• Stop loss is set at $150.

FAST – Fastenal Co.

• After a big run earlier this year, FAST has pulled back and is sitting on support.
• While on a sell signal currently, we want to remain cautious with positioning.
• Buy 1/2 position at current levels.
• Stop loss is tight at $30.50
• Add to position if FAST moves above #33
• 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.

• We recently added a position in CVS to our portfolio as the buy signal is approaching.
• 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-70’s.
• Buy at current levels.
• Stop is set at $50 – honor thy stop.

SHORT CANDIDATES

AMTD – TD Ameritrade

• We had previously recommended a short-sell on AMTD and the recent break below consolidation suggests more downside to come.
• Short at current levels.
• Target for trade is $40
• Stop-loss is set at $52

CAT – Caterpillar

• CAT has been in a long-term downtrend but with earnings approaching a disappointing announcement due to China weakness and “Trade” will not be surprising.
• Short on a break below $130
• Target for trade is $110
• Stop loss is $140

AVGO – Broadcom, Inc.

• AVGO recently made an acquisition of a weak company with old technology. I think this will ultimately prove to be a mistake.
• With AVGO on a sell signal and close to breaking important support and decent short setup seems to be forming.
• Short on a break below $270
• Target is $210
• Stop loss is $290

AMC – AMC Entertainment

• We previously recommended a short on AMC.
• It is time to close that position out.
• Buy back and close the short position tomorrow.
• Short at current levels.
• Stop is set at $15.50
• Target for the trade is $13

HBI – HanesBrands

• HBI has been “taking it in the shorts” for a while. (I know, bad joke, but I couldn’t help it.)
• HBI is very close to registering a “sell signal” and remains overbought from the recent rally.
• Sell short on a break of support at $16
• Target is $12
• Stop is set at $17.50