Long-Short Idea List: 07-25-19

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

NVDA – Nvidia, Corp

• Chip stocks have been trying to come back since their beating last year. While the trade war is not over, the technical backdrop has improved enough to warrant a trade.
• There is still a risk with earnings so stops are tight.
• With a buy signal registered, and moving averages positive we can add exposure.
• Buy at current levels.
• Stop level is $160

GOOG – Alphabet, Inc.

• Last week, we recommended a trading long in GOOG which we added to the long-short portfolio.
• GOOG has still failed to get legs under it but held up well in the face of the DOJ investigation into potential anti-trust issues.
• A break above the 50-dma, currently testing, gives GOOG decent upside.
• We are moving our stop-loss up to $1120-1125.

CRM – Salesforce.com

• We added CRM to the Long-Short portfolio last week as well.
• With earnings season approaching, an upside surprise could give the position a lift and stop-loss levels are very close.
• CRM broke above the 50-dma last week, which opens up old highs as a target.
• Stop loss is moved up to $155.

DAN – Dana, Inc.

• DAN has been consolidating for quite some time now and is looking to try and make a move higher.
• With DAN on a buy signal, look for a breakout above $21 to add a position.
• Stop loss is tight at $18 after purchase.

EMN – Eastman Chemical Co.

• EMN finally broke above its long-term downtrend and is back on a buy signal.
• Buy 1/2 position at current levels, and the second half on a break above $85.
• Stop is set at $75 – honor thy stop.

SHORT CANDIDATES

BLK – Blackrock, Inc.

• We recommended a short-position last week in BLK which is still very overbought and at the top of the trading range.
• If the market gets sloppy over the next couple of months we will likely see downside in the shares.
• Short at current levels.
• Target for trade is $410
• Stop-loss is set at $485

CAT – Caterpillar, Inc.

• CAT missed earnings pretty badly as the trade war continues.
• We recommended a short previously, and a break below current support will likely create another opportunity.
• Short on a break below $130
• Target for trade is $110-120
• Stop loss is $136

GPC – Genuine Parts, Co.

• We stated last week that GPC had been running along its bullish trend line for quite some time.
• Currently on a sell signal, and struggling with support, a break of that trendline will provide a reasonable downside target.
• GPC broke that trendline this past week and quickly headed to our target.
• Target is $90 but take a little profit now.
• Close short at $98 for a profit stop.

BMY – Bristol Meyers Squibb

• BMY has been struggling for a long-time now which doesn’t make it a “terrific” short candidate.
• However, the downtrend remains intact and the recent rallied failed which has now triggered another sell signal.
• Short at current levels.
• Stop is set at $46
• Target for the trade is <$40

BAM – Brookfield Asset Management

• BAM is extremely extended and is working to hold support with a “sell signal” approaching.
• Parameters are fairly tight for a trade.
• Sell short on a break of support at $48
• Target is $45 initial with $40 as the main target.
• Stop is set at $49.50