Long-Short Idea List: 08-08-19

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

MU – Micron Corp

• We previously owned MU in our equity model and like the valuation metrics long-term. But Trump’s trade wars keep impacting the sector.
• However, MU did turn up on a buy signal recently and we decent entry point is forming.
• There is still a risk with earnings, and trade, so stops are tight.
• Look to buy at $40.
• Stop level is $37.50

GOOG – Alphabet, Inc.

• Two weeks ago, we recommended a trading long in GOOG which we added to the long-short portfolio.
• GOOG popped sharply after earnings and we closed out the position with a gain.
• The recent pullback has occurred with a buy signal forming.
• The recent test of the support at the 50-dma puts GOOG in a good trading position.
• Buy at current levels with a stop at the 50-dma.
• Stop-loss is set at $1130.

NBL – Nobel Energy

• NBL has held up well recently despite tumbling oil prices. This is a technical setup only as the fundamentals are lacking for the company.
• Buy at current levels.
• Stop is $20
• Target for trade is $24. A break above $24 will bring $27 into focus.

BMY – Bristol Meyers Squibb, Co.

• BMY was recently on our short list.
• BMY is deeply oversold and has recently triggered a buy signal.
• Buy at current levels with a stop at $43.
• Target for the trade is $49 initially.

NWL – Newell Brands, Inc.

• NWL is sporting a buy signal and has turned up recently despite market turmoil.
• With the company deeply oversold, a break above $15 sets up a move to $20.
• Buy on break above $20
• Stop must remain tight at $14.

SHORT CANDIDATES

BLK – Blackrock, Inc.

• We previously recommended a short-position two weeks ago in BLK.
• We stated then that “If the market gets sloppy over the next couple of months we will likely see downside in the shares.”
• We are approaching our initial target of $410
• Take profits on current holdings and hold 1/2 of the position for a further decline.
• Target for trade remains $410
• Stop-loss is adjusted to $460

CAT – Caterpillar, Inc.

• Last week we commented that CAT missed earnings pretty badly as the trade war continues.
• We suggested shorting the stock on a break below $130
• Our target for trade was $110-120. With CAT hitting $120 yesterday, take profits on 1/2 of the position.
• A break below $119 could see shares slide further and CAT is just now triggering a new “sell” signal.
• Stop loss is adjusted to $130

AMTD – TD Ameritrade Holding

• We previously recommended a short in TD Ameritrade.
• AMTD has now hit our initial target and is oversold.
• Close out the short-position for now.

CRM – Salesforce.com

• We previously recommended a long-position in CRM which was tripped up by Trump’s trade war.
• We closed out the position at slight loss, but CRM has deteriorated further since then.
• Short on a bounce to $150 that fails.
• Stop will be set at $155
• Target for the trade is $125

GPC – Genuine Parts Co.

• We recently recommended a short position on GPC.
• The stock collapsed over the last couple of weeks and is now deeply oversold.
• Close out the short position in its entirety.