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Long-Short Idea List: 07-11-19

Written by Lance Roberts | Jul 10, 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

BRK.B – Berkshire Hathaway

  • If the market is going to continue its rally on the expectation of “Fed rate cuts” then BRK.B is a way to play the broader market in a stock position.
  • Just turning up onto a buy signal from fairly low levels is attractive.
  • Buy at current levels.
  • Stop level is $205

GOOG – Alphabet, Inc.

  • We previously recommended going long GOOG, then shorting GOOG, and now we are suggesting going back long again.
  • GOOG has gotten oversold and is lagging the rest of the tech market currently. With earnings season approaching there is upside potential for a trade.
  • Buy at current levels as stop loss levels are very close.
  • Stop-loss is currently $1100

CRM – Salesforce.com

  • CRM has been holding support and consolidating for the last few months.
  • With earnings season approaching, an upside surprise could give the position a lift and stop-loss levels are very close.
  • Add a position at current levels.
  • Stop loss is set at $150.

FAST – Fastenal Co.

  • After a big run earlier this year, FAST has pulled back and is sitting on support.
  • While on a sell signal currently, we want to remain cautious with positioning.
  • Buy 1/2 position at current levels.
  • Stop loss is tight at $30.50
  • Add to position if FAST moves above #33
  • 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.

  • We recently added a position in CVS to our portfolio as the buy signal is approaching.
  • 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-70’s.
  • Buy at current levels.
  • Stop is set at $50 – honor thy stop.

SHORT CANDIDATES

AMTD – TD Ameritrade

  • We had previously recommended a short-sell on AMTD and the recent break below consolidation suggests more downside to come.
  • Short at current levels.
  • Target for trade is $40
  • Stop-loss is set at $52

CAT – Caterpillar

  • CAT has been in a long-term downtrend but with earnings approaching a disappointing announcement due to China weakness and “Trade” will not be surprising.
  • Short on a break below $130
  • Target for trade is $110
  • Stop loss is $140

AVGO – Broadcom, Inc.


  • AVGO recently made an acquisition of a weak company with old technology. I think this will ultimately prove to be a mistake.
  • With AVGO on a sell signal and close to breaking important support and decent short setup seems to be forming.
  • Short on a break below $270
  • Target is $210
  • Stop loss is $290

AMC – AMC Entertainment

  • We previously recommended a short on AMC.
  • It is time to close that position out.
  • Buy back and close the short position tomorrow.
  • Short at current levels.
  • Stop is set at $15.50
  • Target for the trade is $13

HBI – HanesBrands

  • HBI has been “taking it in the shorts” for a while. (I know, bad joke, but I couldn’t help it.)
  • HBI is very close to registering a “sell signal” and remains overbought from the recent rally.
  • Sell short on a break of support at $16
  • Target is $12
  • Stop is set at $17.50

Talk with an Advisor & Planner Today!

lance_sig

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

2019/07/10
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