Long-Short Idea List: 10-10-19

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

AMZN – Amazon.com

• Last week, we noted that “if the market is going to move higher into year-end, then AMZN should lead the way particularly as we head into holiday shopping season.”
• The trade setup didn’t change much this past week, and with AMZN’s sell signal pretty deeply oversold there is a decent entry point.
• Buy at current levels.
• Stop is adjusted to $1700 hard stop.

ABBV – AbbiVie Inc.

• ABBV recently bounced off of critical support and has triggered a buy signal.
• We are looking to add a position to both the Equity and Long-Short portfolios as we like the almost 6% yield in this environment.
• With the buy signal in place, we are looking for a pullback to $70 that holds to add 1/2 of our position. We will add the second 1/2 position on a break above resistance.
• Stop after initial entry is $64

CAT – Caterpillar, Inc.

• I am not crazy about this trade but CAT has been consistently holding support and is deeply oversold at this juncture.
• Buy at current levels with a very tight stop at $115
• Take profits at $130.

CRM – Salesforce.com

• CRM has gotten pretty oversold and the sell-signal is very deep. Importantly, CRM has held a rising trendline support which is bullish.
• CRM has a tendency to beat earnings and do well, so there is a decent trade setup here.
• Buy CRM at current levels.
• Stop loss is set at $142.50

DE – Deere & Co.

• Both DE and CAT should do well if there is some sort of trade deal.
• However, DE has been in a long-term consolidation and is close to breaking out to the upside.
• Buy a position in DE only IF it breaks above current resistance at $170.
• Stop loss is set at $150.

SHORT CANDIDATES

AVY – Avery Dennison Corp.

• Last week, we suggested AVY for a long-trade on a breakout above $117.50. That didn’t happen and the “sell signal” has now been triggered.
• We had originally suggested a short of AVY on a break below the previous stop of $112.50
• That level has been triggered.
• Target for trade is initially $100
• Stop-loss is $115

AMD – Advanced Micro Devices

• We recently suggested a short-position on AMD if it broke below its consolidation pattern and triggered a sell signal. Both have occurred.
• Sell short at current levels.
• Target for trade is $22
• Stop-loss is $30

FB – Facebook, Inc.

• Last week, we discussed shorting FB which had been consolidating in a tightening pattern over the last couple of months.
• With a “sell signal” now triggered at a fairly high level, downside risk remains decent.
• Sell short FB at current levels.
• Target for trade is $160
• Stop-loss is set to $185

BUD – Anheuser-Busch InBev

• BUD had a very good run this year but that now appears to be over.
• With the break of the bullish uptrend line, the risk is currently to the downside.
• Short BUD on any failed rally to $95
• Stop loss is $97.50 after entry.
• Target for trade is $80

STZ – Constellation Brands, Inc.

• STZ has been in a choppy uptrend from the December 24th lows. We actually like the company and will probably add it back to the portfolio at lower levels.
• However, for now, it has broken important support and looks to go lower.
• Sell Short at current levels.
• Target for trade is $170
• Stop-loss after shorting the position is set at $195