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Courtesy of Scott Martindale at Sabrient
The Week Ahead
Volume increased last week as traders and virtual portfolio managers began to return to action, but it was still below expectations. Also, the market didn’t move very much, with the SPY closing at 112.49 after closing the prior week at 111.48 — i.e., up a measly buck in an uneventful week. The major indexes remain above their 50 and 200-day moving averages, which is bullish. But I’m still not comfortable that the fall rally has begun. There seems to be more downside potential at the moment.
Lastweek, I made only one virtual portfolio move when I added a new short in BKS.
Open Positions
Going into the new week, we have two long positions and three short positions.
LONGS:
We are still long 2/3 of the original position in Freeport McMoRan ( FCX) from $70.20. The stock closed Friday at $81.72. It is rated BUY in the Sabrient Ratings Algorithm, and carries an Outlook score of 72 and is still displaying strong momentum. We booked the first round of profits at the 10% profit level after it hit $77, and with the continued strength, I am going to move my mental stop up to the $77 level, although I might close at least a partial position sooner if warranted.
We are long a full position in Endo Pharmaceuticals ( ENDP) from $28.62. The stock closed Friday at $29.61. It is rated STRONG BUY in the Sabrient Ratings Algorithm, and carries an Outlook Score of 98. I have a mental stop loss for a closing price below $26.22, which was its opening price on August 18 when it started its bullish run.
We are short 2/3 of a full position in First Horizon National (FHN) from $11.23 after harvesting the first round of profits on 1/3 of the original position at the 10% profit mark. The stock closed Friday at $19.99. FHN is rated STRONGSELL by the Sabrient Ratings Algorithm and carries a Company Outlook Score of 2. I have a mental stop at a close above the entry price of $11.23.
We are short 1/3 of a full position in Texas Industries (TXI) from $32.04 after harvesting the first round of profits on 1/3 of the original position at the 12% profit mark and then stopping out of another 1/3 position when the stock rose above the entry price. The stock closed Friday at $32.18, and I am holding on to the final 1/3 position in expectation of renewed weakness, but I am watching it closely ever since I moved my mental stop to the breakeven entry price of $32.04 (which it has since exceeded, of course). It carries a STRONGSELL rating in the Sabrient Ratings Algorithm, a Company Outlook Score of 1.7.
We are short a full position in Barnes & Noble (BKS) from $15.70. The stock closed Friday at $15.88. BKS is rated STRONG SELL by the Sabrient Ratings Algorithm and carries a Company Outlook Score of less than 1. I have a mental stop at a close above its September 3 intraday high of $16.87.
Watch List
LONGS:
Some stocks that I have on my Buy watch list include the following:
AXS
VECO
XRTX
SKX
STX
SCVL
HUM
TEO
ATK
CHBT
ARLP
WDC
LXK
LRCX
RFMD
IDSA
HWK
LEA
CLF
ACGL
NANO
LMAT
LZ
RELL
IPXL
TEN
AXTI
SHORTS:
Some stocks that I have as Short candidates are the following:
USG
MGM
JOE
RAIL
CLDA
VTAL
VSAT
VRTX
ZOLT
ATPG
GDP
VMC
SCOR
CCI
AMT
STI
CIEN
SGMS
CNQR
TSLA
GHL
VSAT
PCL
TEX
TXT
GET
I will be watching the markets for buy and sell opportunities.
Regards,
Scott Martindale
Disclosure: The author holds no actual positions in the stocks selected for this virtual portfolio.
Disclaimer: This newsletter is published solely for informational purposes and is not to be construed as advice or a recommendation to specific individuals. Individuals should take into account their own unique and specific circumstances in acting on any stock selection made by Sabrient. Sabrient makes no representations that the techniques used in these reports will result in or guarantee profits in trading. Trading involves risk, including possible loss of principal and other losses, and past performance is no indication of future results.
