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Long-Short Idea List: 04-25-19

Written by Lance Roberts | Apr 25, 2019

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

  • We recommended going long AMZN a few weeks ago as it broke out of its trading range.
  • Remain long this week, but take profits heading into earnings.
  • Sell 1/3 of position and hold balance. Use any earnings related weakness to add back into position around support at $1700
  • Stop level is $1600

GOOG – Alphabet, Inc.

  • We previously recommended going long GOOG as it broke above resistance following the December sell-off.
  • Hold onto that position now, but like AMZN, take profits heading into earnings.
  • Sell 1/3rd of position at current levels and hold balance.
  • Look to add back into the position on weakness back at $1175.
  • Stop-loss is currently $1125

MSFT – Microsoft Corp.

  • We remain long MSFT in our Equity portfolio currently.
  • Like AMZN and GOOG, MSFT is extremely extended and after good earnings yesterday, we are looking to trim some profits and wait for a pullback to add back into the position.
  • Sell 1/3rd of position and hold the balance.
  • Look to add to position at $115
  • Stop loss is moved to $110.

CHRW – C.H. Robinson Worldwide

  • After breaking the downtrend and holding support, CHRW is set to potentially move higher.
  • 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.

  • This is a pure technical speculative trade. Keep a very tight stop.
  • 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-80’s.
  • Buy at current levels.
  • Stop is set at $50 – honor thy stop.

SHORT CANDIDATES

JWN – Nordstrom

  • JWN has remained under intense pressure and broke important support last week.
  • Short at current levels.
  • Target for trade is $38
  • Stop-loss is set at $45

CAT – Caterpillar

  • CAT had disappointing earnings today and suggested that China related weakness is likely more than markets are currently anticipating.
  • This is a wait-and-see short play as you need a break below the bottom of the wedge.
  • Short on a break below $130
  • Target for trade is $110
  • Stop loss is $140

TSLA – Tesla, Inc.

  • Last week we recommneded shorting TSLA. As we said then:
    • “There is a high risk of disappointment in this earnings seasons report particularly as auto sales have declined.”
  • TSLA missed earnings and revenue numbers yesterday.
  • However, TSLA did promise to return to profitability in the future, uhm right, but was enough to get after hours TSLA-ites excited.
  • The fundamental backdrop to TSLA remains poor and this is a $100 stock at best. But that thesis will take some time to play out.
  • In the meantime, if TSLA rallies above $270 tomorrow, close out the short position for now.
  • Otherwise, continue to hold short with a target to add to the position below $260 as instructed last week.

BT – BT Group

  • BT continues to perform poorly and we have recommended shorting this position in the past.
  • Short at current levels.
  • Stop is set at $15.50
  • Target for the trade is $13

VTR – Vertias, Inc.

  • We recommended shorting VTR last week as it was close to triggering a “sell” signal.
  • That signal has been triggered and VTR is not yet oversold.
  • We blew through our initial $60 target so cover 1/2 of the position immediately.
  • Stop is now moved to $62
  • Position can be re-shorted on a failed rally to $61.50

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Lance Roberts is a Chief Portfolio Strategist/Economist for RIA Advisors. He is also the host of “The Lance Roberts Podcast” and Chief Editor of the “Real Investment Advice” website and author of “Real Investment Daily” blog and “Real Investment Report“. Follow Lance on Facebook, Twitter, Linked-In and YouTube

2019/04/25
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