Guest View
User: Pass: | become a member


The Oxen Report: I Just Can’t Get Enough of You…Retail

Happy Tuesday to all! It is looking to be a nice day in the markets today. Euro is coming back! That is good news for us on our short sale of Proshares Ultrashort Euro ETF (EUO) that we got involved with yesterday and have continued to hold. We got into EUO at 24.65, and we are looking to exit at 24.15 – 23.90. Additionally, yesterday, in my Oxen Alert – Long Play of the Week, we got positioned into Aeropostale Inc. at 28.00. We are looking for 4-6% gains. The stock closed yesterday at 28.56, so we are halfway there. Those are the two open positions we have, and here is another one for you for today…

Buy Pick of the Day: Chico’s FAS Inc. (CHS)

Analysis: If you haven’t noticed, I do like my retail stocks. Today, I think I have another solid opportunity for us in the retail sector that should be a lucrative play. This morning, the market got some great earnings from Abercrombie and Fitch (ANF) and luxury retailer Saks Inc. (SKS). Saks led the way with an EPS of 0.12 vs. the expected 0.05, a surprise of 140%. The stock has kicked up over 6% in pre-market, and it, as well as ANF, should help to bring the retail sector up today. Additionally, the rest of the market is also looking very attractive after some good news about the Euro, which is on the rise and the housing market. The market saw a rise in housing starts in the month of April better than March and is a small sign that things are getting slowly better.

With that said, futures have been rising all morning. So, a lot of stocks are going to be opening over 2-3% premium at the bell. We want to find a stock that has potential for growth all day and is not just going to pop and then neutralize. That is why I like Chico’s. The company makes clothing designed for middle-aged to older women. It is in the same vein as Coldwater Creek, Ann Taylor, and Talbot’s. This specialty retailer should have a good day because of all the bullish news swirling around it. Additionally, the company reports its earnings tomorrow morning. This added buzz should help to allow CHS to continue to grow all morning and not just be a quick pop. 

The company should be getting some excitement as it has two great quarters in a row as well with 87.5% and 100% surprises. The company, though, has sold off into the announcement rather than get bought up, which only gives me more reason to like this stock. Those types of beats should help to give more fuel to Chico’s as well as the bullish day and other solid retailers. 

Technically, CHS has, as was said, been sold off recently. In the past two weeks, the stock has lost 5%. In the past three, it has lost over 10%. The company has been on the decline. It is near its lower bollinger band, which means it has lots of upside to move towards the upper band. It is oversold on stochastics, and it is undervalued on RSI. These are all the more reasons to believe this one has some great potential.

Get in early and watch this one rise!

Entry: We are looking to enter CHS at the opening of the market at 14.50 – 14.60

Exit: We are looking for a 2-3% gain before we exit.

Stop Loss: 3% on bottom.

 

Good Investing,

David Ristau

This entry was posted on Tuesday, May 18th, 2010 at 9:07 am and is filed under Uncategorized. You can leave a response, or trackback from your own site.

Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!



Comments



  1. lflantheman
    May 18th, 2010 at 9:19 am | PermalinkIgnore this user

    David…What’s your current feeling about oil, and what’s your play on it?  Thanks. 

  2. yipcarl
    May 18th, 2010 at 9:22 am | PermalinkIgnore this user

    EUO..Moving the right direction… You’re on fuego…

  3. David Ristau
    May 18th, 2010 at 9:23 am | PermalinkIgnore this user

    Lflan -

    Looks like oil may have bottomed out. I am excited about this market right now. I think the Euro and the EU are going to have a nice recovery over the next week or so. I think DIG and ERX are overvalued to start the day, but they could have huge days. I would play DIG if you want an oil play but get in quickly – it is probably 2 – 2.5% over its close though when it opens. A bit less volatile play would be with USO

  4. David Ristau
    May 18th, 2010 at 9:26 am | PermalinkIgnore this user

    Yip -

    Thank you. We are looking at an exit of 24.15 – 23.90.

  5. David Ristau
    May 18th, 2010 at 9:34 am | PermalinkIgnore this user

    CHS -

    Opened above my range, I am recommending going in at 14.65 – 14.75 now.

  6. yipcarl
    May 18th, 2010 at 9:37 am | PermalinkIgnore this user

    In at 14.70…

  7. David Ristau
    May 18th, 2010 at 9:46 am | PermalinkIgnore this user

    Oxen Alert – Entry/Exit

    Market looking good and recovering from a nice selloff to start the morning.

    CHS – We got involved at 14.65. We are looking for an exit of 14.95 – 15.09 for a 2-3% gain. It is up to 14.80 already, so keep one set of fingers crossed. Two is unlucky!

    ARO – We got involved at 28.00, and we are looking for an exit of 29.12 – 29.78. We were in the range, but it has come out. I think we should just continue to hold onto this one for now until it gets into the range and then we will see what we can get.

    EUO – Looking for an exit of 24.15 – 23.90. It is down to the 24.30s now. Again this one is a slow developer, but is chugging in the right direction.

  8. yipcarl
    May 18th, 2010 at 9:53 am | PermalinkIgnore this user

    I thought we missed ARO…i never got the entry..

  9. David Ristau
    May 18th, 2010 at 9:56 am | PermalinkIgnore this user

    Yip -

    I got an entry of 28, but it was one of those that I got into and then bam it moved up. One of the issues with this as would be with any daytrading is things are constantly moving. I sent the post, but it took a couple minutes to post. That 3-4 minute delay between when I looked at the chart and when it posted was just unlucky on that time. It was just then moving away. 

  10. David Ristau
    May 18th, 2010 at 10:13 am | PermalinkIgnore this user

    Hey all,

    If you have Facebook, Twitter, or Seeking Alpha add me as a friend/follower for my new Oxen Report accounts.

    Here is the Facebook link. For Facebook, I am going to be on there throughout the day and be able to be contacted in real time. So, if you add me you can chat me on there and we can have conversations about stocks and any questions you have.

    Here is the Twitter link. I will be doing some tweets about my entry positions as well as other news.

    Here is the Seeking Alpha link. Add me as a follower!

  11. yipcarl
    May 18th, 2010 at 10:15 am | PermalinkIgnore this user

    Seriously you have a crystal ball or something?  LOL.  you got in and within 5 minutes it moved 50 cents!!!! HAHAHA…
    Signed you up on facebook and twitter…

  12. David Ristau
    May 18th, 2010 at 10:17 am | PermalinkIgnore this user

    Yip -

    Haha…that was just unlucky timing for you and all other readers. I don’t have a crystal ball, but I just can read the market.

  13. yipcarl
    May 18th, 2010 at 10:18 am | PermalinkIgnore this user

    You sure have been able too!  Should have doubled down on CHS but it wasn’t in the 50′s long!

  14. jomptien
    May 18th, 2010 at 10:22 am | PermalinkIgnore this user

    I’m in at 14.67 – good luck to all of us

  15. David Ristau
    May 18th, 2010 at 10:28 am | PermalinkIgnore this user

    Yip and Jomp -

    My guess is we get a 2 PM surge on this if it hasn’t hit 2-3% by then. It is just dilly dallying right now. On the ones that have earnings coming up those last two hours are usually big rises.

  16. yipcarl
    May 18th, 2010 at 10:36 am | PermalinkIgnore this user

    Yea I’m pretty convinced we aren’t fading this rally to close, I think it’s just temp pullback I would agree… if CHS get’s to 55 I’m doubling down…

  17. yipcarl
    May 18th, 2010 at 10:45 am | PermalinkIgnore this user

    I held off…waiting to find a bottom here on the SP500 keeps going down…

  18. yipcarl
    May 18th, 2010 at 10:48 am | PermalinkIgnore this user

    Doubled at .49 we’ll see! 

  19. yipcarl
    May 18th, 2010 at 10:50 am | PermalinkIgnore this user

    Uh oh…

  20. yipcarl
    May 18th, 2010 at 10:52 am | PermalinkIgnore this user

    Where’s the stop 13.95-14.10..
     
    Looks like market is dying..

  21. yipcarl
    May 18th, 2010 at 11:13 am | PermalinkIgnore this user

    Interesting it’s not participating in the market reversal….yet….

  22. jomptien
    May 18th, 2010 at 11:21 am | PermalinkIgnore this user

    usually stop is 3%, making it around 14.21.
    still hangin in there at least until after 2pm like David said

  23. David Ristau
    May 18th, 2010 at 11:21 am | PermalinkIgnore this user

    Oxen Alert – The Daily Musing: GM, Its Bailout, The Aftershock

    As some of you may have read a couple weeks ago, General Motors paid back their direct loans they received from the USA and Canada with payments of $4.7 billion and $1.1 billion going to each nation, respectively. It appeared to be the first step in the right direction for a company that has struggled significantly over the past decade. The GM crisis of 2009 was catastrophic and required not only these direct loans, but the government taking a 75% stake in the company to keep it afloat – even though the government is predicted to lose billions on the deal.

    Yet, even more recently, as of yesterday, GM announced that the company made a profit for the first quarter with some exciting numbers for future growth. The company made over $4 billion in revenue and actually maintained some free cash flow just above $1 billion. This is terrific news for any company because free cash flow is extremely important to new investments, of which GM needs a lot. Yet, the profit is the first right step. Isn’t it? Is GM actually coming back? What? GM MADE $1.2 BILLION???!??!?!

    When I saw that GM had made a profit I was confused…shocked…just sort of like what this…I’m confused. Yet, the company has seen growth in its Asian and South American markets. They have cut off some of the non-profitable parts of the company (Saturn, Pontiac, and Hummer), and they have reinvested into the primo-American lines (Chevy, GM, and Buick). They actually have identified the areas of their business that make money and are investing into them…its amazing. 

    The company, though, still has a number of issues. For one, they still have the infamous Opel line, which lost $500 million in the first quarter. The company says they are cutting its capacity by 20%, but as Joe Phillippi, president of AutoTrends Consulting comments, "Fixing Opel is like catching a falling knife. You’re trying to restructure a company faced with a market that is soft and headed for turmoil." Further, while the company has redefined its image, especially with Buick. We have to wonder are they selling cars that people are going to want?

    As Ed Whitacre comments, "we…buil(t) the fuel-efficient Chevy Cruze, which has been a hit in every region where it has been introduced. An eco version of the Cruze, with a 40 miles-per-gallon highway rating, will customers the fuel economy of a hybrid without the price tag."

    The Cruze has been a hit. It will be offered across all markets. It is supposed to be sheik enough for Europe and Asia, which means it will be high quality in the states. Edmunds and US News have wrote pretty rave reviews about it. The company is introducing the Volt. They have reinvented the LaCrosse and Lucerne on the Buick line. The Lacrosse received rave reviews, has been a top seller, and is actually, according to Insideline.com, a better deal than a Lexus ES350. 

    The company has abandoned the SUV. They got the message. They have started to redefine themselves, and it looks up for GM. While I personally am an Audi S5 and Aston Martin V12 Vanquish kind of guy, I do see the company working hard to improve their lineup. They have gotten a lot of criticism, but I think that GM is taking the right steps.

    The government agrees. At one point after the $40 billion takeover of 75% of GM’s assets, the CBO predicted that Americans would lose $31 billion on that investment into GM. Their latest numbers have that number down to $8 billion. This is all dependent on an IPO that is predicted to come late this year or next year and old GM bonds. If the company continues to improve at the same rate (and they have to in order to compete), then they I think they have a shot of becoming a name not to be laughed at but taken seriously.

    The key for me is content. The company is improving now, but they have to. In two to three years, are they still improving at this rate. Are they always redefining themselves for the better? The old GM just got content with producing the same cars for years. That cannot happen again.

    What do you think? Do you think GM is back? Do you think GM has what it takes?

  24. David Ristau
    May 18th, 2010 at 11:23 am | PermalinkIgnore this user

    Yip -

    All of retail is coming down right now. I am not worried though…yet. 

  25. yipcarl
    May 18th, 2010 at 11:35 am | PermalinkIgnore this user

    LOL, not yet……I’ll defer to you but retail worry’s me almost more than any sector.  I guess because it is my fundamental belief the recovery is smoke and mirrors and the consumer is on it’s way to die.  Of course that longer term ideology if right doesn’t affect a day/swing trade per say, it’s just that I believe the longer term direction(3-6 months) is down.  The issue is that my my macro belief starts affecting my short term confidence.   HAHAH…

  26. yipcarl
    May 18th, 2010 at 11:48 am | PermalinkIgnore this user

    When I double my position size it’s almost a forgone conclusion I lose.  I 2x my trade today after the success of the last week and this is the first trade in a week that looks grim.  :( I’m putting in my order to blow at 14.21…

  27. David Ristau
    May 18th, 2010 at 12:30 pm | PermalinkIgnore this user

    Yip -

    Tough one here. I missed this one I am thinking as of now. It may get a late run up, but I am definitely thinking break even is the best we can do.

  28. yipcarl
    May 18th, 2010 at 12:34 pm | PermalinkIgnore this user

    Nice, thanks for that… I’ll try to get out at the best price I can….  Good man, like it when that you know you can be wrong, that’s a huge plus!! :)

  29. yipcarl
    May 18th, 2010 at 12:37 pm | PermalinkIgnore this user

    I’m trying ot find the most updated disaster hedge on DXD, I feel like a retard, it should be hard to find but it is for me….. I was never good in a library either!
    I went to portfolio but that looks like an older DXD trade idea…

  30. David Ristau
    May 18th, 2010 at 12:37 pm | PermalinkIgnore this user

    Oxen Alert – Midday Message

    The market had made a complete turnaround and is in the red now even though lots of great news is out there. I thought it would sustain the gains after a rough day yesterday. Maybe we will get another late day surge.

    CHS - We have our stop loss set at 14.20. The stock is at 14.32 with a low of the day at 14.30. It isn’t breaking that 14.30 mark, but I do worry that unless the market turns around we are going to get stopped out for a 3% loss. We will continue to hold, and I am hoping for that 2 PM surge before we get stopped out.

    Current Position: HOLD

    EUO - We are about even with this short sale. The Euro is bouncing back, but EUO is not dropping like we had hoped. In fact, it has made its way back to the positive side. I am going to continue to hold here, but I will probably take a small gain if we get that late surge. Otherwise, we can just take a breakeven and be happy with that.

    Current Position: HOLD

    ARO - Much like the other two, ARO has lost ground as well. I am still up 1% with this one, but we had almost 5% gains. We will continue to hold as this one doesn’t need to even be sold until Friday at the latest.

    Current Position: HOLD

     

    Good Investing,

    David Ristau

  31. David Ristau
    May 18th, 2010 at 12:39 pm | PermalinkIgnore this user

    Yip -

    Not sure what you mean by disaster hedge on DXD

  32. thegoldmanrule
    May 18th, 2010 at 12:40 pm | PermalinkIgnore this user

    Concerning GM:
    1.  They advertise constantly and spend billions more doing so than their competitors…for a reason. 
    2.  The quality and creativity is lacking…engineers do not run the company, the union and marketing employees have the power instead.  The mid-executive structure is a good ole boys club…and still exists at the lower levels.  Those who ran the company into the ground are still behind the steering wheel…amazing to say the least after losing $80 billion dollars in four short years! 
    3.  GM should have been allowed to go under.  Ford, Toyota, etc would have picked up the parts and made better products in the future.  Companies like Tesla would have gained also.  Short term gain, long term loss…the bailout was a political vote buying mechanism that the majority of taxpayers did not want…

  33. David Ristau
    May 18th, 2010 at 12:53 pm | PermalinkIgnore this user

    Goldman -

    I appreciate the comment. My reaction:

    1. When did this start? They also have a lot more models and lines than your typical company. They have four lines, whereas most have one. I would expect advertising to be at least 4x therefore. Yet, you are right if it is much more than this.

    2. I agree that it used to be this way in a lack of creativity, and I still think this is a huge concern. Why buy the ugly Chevy or the bulky GMC when you can get something much more sleek from Toyota, Ford, Hyundai, Honda, etc.? Yet, they are making some strides here as I mentioned with the reinvention of the Buicks and some new Chevy models.

    3. I disagree that it should have been let go under. The one thing that stopped us from having a Depression is the fact that we did not let companies fail. The Depression occurred because 50% of all banks failed. The government did not bail anyone out. We have lower unemployment and have bounced back much quicker because of this reason.

  34. yipcarl
    May 18th, 2010 at 1:02 pm | PermalinkIgnore this user

    No worries David i found it.  It was a Phil reco.  He called it a disaster hedge on ETF DXD
    Here it is.
     
    That DXD play I mentioned is super-sweet as it is now:

    Long Oct $23 calls at $5
    Short Oct $27 call at $3.40 (net $1.60)
    Short Oct $23 puts at $1.35 (net .25)

    That’s .25 on the $4 spread and DXD is currently at $26.89.  DXD is a 2x ultra so figure a 10% move on the Dow, to 11,500 is required to force a buy of the puts (and they can be rolled).  If you put $500 into buying 20 of these contracts, the margin is about $5,500 and you collect $8,000 if the Dow is still this low or lower in October. 
    As we discussed in the $1M portfolio article comment section (a must read for Members), if you pair a trade like this with $40,000 worth of buy/writes that have a built-in $8,000 cushion (20%) then the market would have to fall 40% before you really start losing money on your new bullish entries.  If the market goes up, even a little, against at the money buy/writes that pay 20%, then you will have $8,000 in profits and ONLY need to use some of that to deal with your putter IF the Dow is over 11,500.  That’s how we manage hedged entries in an uncertain market!

    I have a limited understand but it seems just straight buying an Oct call on DXD would give you a lot of upside if the market crashed, more than the spread and a limited loss on the call if the market continues up, I’m not sure why this spread is so good.

  35. yipcarl
    May 18th, 2010 at 1:18 pm | PermalinkIgnore this user

    I like to use the VXX as a hedge.  When the VXX got back to even on the day and our CHS started to look bleak I bought VXX and I’m up 2%, decreasing my loss in CHS, holding the 30 area pretty well….  VXX is a good hedge when going long in an uncertain market like this….Furthermore the VXX is bound to spike at some point even if we are in a recovery(which I don’t believe we are)

  36. David Ristau
    May 18th, 2010 at 1:28 pm | PermalinkIgnore this user

     Yip -

    I am really bad at options, so I am sorry I can’t help.

  37. David Ristau
    May 18th, 2010 at 1:29 pm | PermalinkIgnore this user

    Yip -

    Thanks for the insight.

  38. yipcarl
    May 18th, 2010 at 1:29 pm | PermalinkIgnore this user

    LOL.  ME 2!! 
    OF COURSE..

  39. yipcarl
    May 18th, 2010 at 1:38 pm | PermalinkIgnore this user

    David… In ref to your GM….  It’s hard to say who is going to come out of this however I think all these ‘good/blowout earnings’ are suspect.  I wouldn’t touch GM with a ten foot pole unless it was a quick trade.
     
    P.S.  The bottom line is credit…. just like with homes.  Unless we get credit back to somewhere near the level it was then homes and cars are doomed for now and there is no telling who makes it.  The U.S. car unions need to be broken or they need to renegotiate a much better wage situation for GM parent a cheaper one.  I regress, most people just don’t buy cars or houses without credit.  We have some 10′s of trillions of dollars of debt/credit/money going bad… This is going to be a recurring continual problem for years to come. This is why I see the markets declining to a MUCH lower level starting sometime in July-Sept.  Of course all in my Humble Opinion.
     
    Sold my VXX at 28.  Looking to reenter at 27.50 area… if this action keeps up..

  40. yipcarl
    May 18th, 2010 at 1:46 pm | PermalinkIgnore this user

    Wow MURDERED on CHS.  Waited hoping for a bounce got out at 14.12.  OUCH.  big loss…. had to be the biggest position since I started which put me back even for the week.  Damn…. and with EUO losing now I’m at a loss over all. Such as trading….

  41. yipcarl
    May 18th, 2010 at 1:55 pm | PermalinkIgnore this user

    Riding this downward momentum…. In TZA AT 6.27

  42. stockbern
    May 18th, 2010 at 1:55 pm | PermalinkIgnore this user

    David,  Todays chart on CHS looks just like the chart IWM.  Lately , you just can’t fight the trend.

  43. thegoldmanrule
    May 18th, 2010 at 2:04 pm | PermalinkIgnore this user

    David – If losing $80 billion in 4 years can not make GM go under, what would?  Answer….nothing…and GM knows this and will take full advantage of it in the future.  Honestly, who wouldn’t???
    The unintended consequences, moral hazards, and other hidden variables are what worry me…along with a society in which everyone gets a trophy, losers or winners.  GM "was" a loser, who got a very large trophy instead of bankruptcy at the expense of our kids and grandkids.  In the process, IMHO, it virtually guarantees they will not learn from their mistakes as repeat and rinse the process again in 10-20 years.  I believe it will be short term good, long term bad…
    Disclaimer:  As a contract product design engineer…having worked on "fixing" the H2…I know more than I should, and have definately been jaded by the experience of peeking behind the curtain.  To be honest, I even own a GM product…because I like fixing things…=)

  44. yipcarl
    May 18th, 2010 at 2:04 pm | PermalinkIgnore this user

    EUO…thoughts?  I wish I could take a break even, I’m down 1.5%…..ugg.

  45. David Ristau
    May 18th, 2010 at 2:23 pm | PermalinkIgnore this user

    Yip -

    Quick bounce back up at 2 PM like I suspected, but it stink that it had gotten so far down. I stopped out for a 3% loss. 

  46. David Ristau
    May 18th, 2010 at 2:26 pm | PermalinkIgnore this user

    The Goldman -

    Great insight, and I appreciate your concern. Only time will tell.

    Yip -

    Don’t know what to do with EUO. I think we should take our wounds. 

  47. yipcarl
    May 18th, 2010 at 2:27 pm | PermalinkIgnore this user

    S happens in trading, it’s just frustrating on my part all my previous positions were half of this position.  Seems I always falter when doubling down..

  48. David Ristau
    May 18th, 2010 at 2:34 pm | PermalinkIgnore this user

    Yip -

    Well well, we are trying to find some winners for everyone. The market is confusing right now you know. I hope to get some more successful picks going here. ARO has even started to be a loser…aiye yie yie…

  49. stockbern
    May 18th, 2010 at 2:41 pm | PermalinkIgnore this user

    yipcarl    e-mail me at hoberns@yahoo.com

  50. yipcarl
    May 18th, 2010 at 2:55 pm | PermalinkIgnore this user

    Damn crushed in Euro too.  I should use others idea’s when it doesn’t conflict with my convictions however I get confused with convictions and just making a trade.  Retail is scary to go long I believe and I’ve been telling everyone i know the EURO is going to parity with the dollar however I take trades against both of these convictions.  When will I learn… Next time I do that and stay out of the trade the security in question will probably move 10% in an hour. LOLOL.

  51. yipcarl
    May 18th, 2010 at 3:04 pm | PermalinkIgnore this user

    David, I know you’re trying man it’s all good if trading was easy everyone would be rich and we know that can’t happen.
    Stockbern…just emailed you.

  52. David Ristau
    May 18th, 2010 at 3:14 pm | PermalinkIgnore this user

    Yip -

    Never make a trade that you don’t like. It will confuse you just like you said. Better to be happy with what you are buying.

  53. yipcarl
    May 18th, 2010 at 3:19 pm | PermalinkIgnore this user

    We’ll again David it’s not about liking them per say, it’s about making money.  Although I believe retail will die and the Euro will end up at parity with the dollar I certainly clearly understand it doesn’t go straight down and some of the best trades are the counter trend trades.  HOWEVER I’m learning when these counter logic trades (for me) don’t work out, it’s more frustrating then something I really believed in not working out and just being wrong…..  Who knows..

Dashboard

 Sector Performances (Today)

 Thermal Imaging