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Long-Short Idea List: 06-27-19

Written by Lance Roberts | Jun 27, 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

B – Barnes Group

  • B has been basing for quite some time now and the “sell signal’ is close to reversing to a “buy.”
  • With strong basing support at $51 the trading parameters are fairly tight.
  • Buy at current levels.
  • Target is $62.50
  • Stop-loss is at $51

EOG – EOG Resources

  • EOG has recently turned up from a very deep sell-signal and remains oversold.
  • The trading setup is not ideal but a break above resistance should put $110 to $115 in reach.
  • Buy at $95 with a stop-loss at $87.50

CVS – CVS Health Corp.

  • We have stated several times that we like the fundamentals and business model of CVS. We just have not had a workable entry point for the position.
  • That entry point may be approaching with the long basing period CVS has undergone.
  • With the deep sell signal turning up, and remaining oversold, the entry point is looking much better.
  • Buy at current levels
  • Carry a tight stop-loss at recent lows around $52.
  • Initial target is $62-65

DOV – Dover Corp.

  • DOV recently sold off a bit but has rallied in recent days on hopes of a “trade deal” with China.
  • We remain long the position in our equity portfolio but a breakout to new highs could see higher levels.
  • Buy on a breakout above $98
  • Raise stop-loss to $87.50

SHORT CANDIDATES

ADP – Automatic Data Processin

  • ADP is grossly extended and with signs of weakness creeping into the employment picture, ADP is vulnerable.
  • Setup for shorting is pretty clean.
  • Short at current levels with a stop-loss at $168.
  • Target is $150

CBS – CBS Corp.

  • CBS continues to consolidate in a downtrend.
  • Parameters for shorting remain very tight.
  • Short on a break of $48
  • Stop-loss is $51
  • Target is $41

NRG – NRG Energy

  • NRG has grossly lagged the Utilities sector as a whole. With Utilities very overbought the risk is to the downside for NRG currently.
  • Short at current levels.
  • Stop-loss is $36
  • Target is $24

MU – Micron Technology

  • MU rallied on Wednesday on better than expected earnings. However, that rally may be short-lived.
  • It is very likely that with the trade-war continuing and the “sell signal” still intact, a retest of recent lows is likely.
  • Short at current levels where both moving averages have converged.
  • Stop-loss is $38-39
  • Target for trade is $30

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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

2019/06/27
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