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Long-Short Idea List: 08-08-19

Written by Lance Roberts | Aug 8, 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

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.

Talk with an Advisor & Planner Today!

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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

2019/08/08
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