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Long-Short Idea List: 09-26-19

Written by Lance Roberts | Sep 26, 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

  • Last week, we stated 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 $1740

AVT – Avnet, Inc.

  • AVT is at the top of a very volatile downward trending trading range.
  • With the buy signal close to turning up, look for a breakout above $44 for a tradeable opportunity up $48-49.
  • Buy a position on a breakout of the downtrend at $44.50-45
  • Stop is $42.50

KSS – Kohls Corp.

  • KSS has been basing near the lows as of late and the sell signal has gotten deeply oversold.
  • Buy at current levels with a very tight stop at $47.50
  • If KSS announces improved earnings it could get a decent pop higher.
  • Target for trade is $55 initially.

GT – Goodyear Tire & Rubber

  • I always try and include one very speculative, “if it works its going to make a lot of money” trade idea.
  • GT has a P/E 7x, has earnings and throws off a 4.5% yield. Yet it looks like no one is driving cars anymore.
  • The trade set up is very good with limited risk.
  • Buy at current levels with an initial rally target of $16.50
  • Stop-loss is set at $12.50

GPS – Gap, Inc.

  • GPS has been beaten up but we are heading into its best time of year, as the shopping season is getting ready to start.
  • Risk/reward is easy for this trade.
  • Buy a position in GPS at current levels.
  • Target for trade is $23
  • Stop loss is set at $16.50

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” is just about to trigger.
  • Look to short AVY on a break below the previous stop of $112.50
  • Target for trade is initially $100
  • Stop-loss is $115

BLL – Ball Corp.

  • Quite a while back we suggested a long on BLL corp. It is now time to close that trade out and look at a potential retracement of the extreme extension.
  • Sell on a break below $72.50
  • Target for trade is $60
  • Stop-loss is $75

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 on a break below the trendline at $182.50
  • Target for trade is $160
  • Stop-loss is set to $185

INCY – Incyte Corp.

  • When we initially discussed INCY we suggested that it could break either way out of the very tight consolidation it had been building.
  • It broke to the downside and triggered the “Sell signal.”
  • Short INCY on any bounce that fails to get above $80.
  • Stop loss is $82.50 after entry.
  • Target for trade is $60

HLT – Hilton Worldwide Holdings.

  • HLT has also recently registered a “sell signal” and is trading at fairly overbought levels.
  • Sell Short HLT on a break below $90
  • Target for trade is $70
  • Stop-loss after shorting the position is set at $92.50

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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

2019/09/26
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