Anthracite Capital, Inc. (AHR) - long/bullish
If the name Anthracite Capital rings a bell, it's because we dissected this chart yesterday following the stock's break above a major resistance line. At the time the plan was to let AHR slide back and then restart the uptrend before jumping on board. The pullback fizzled yesterday though, and is being followed by a strong, high-volume gain today. In other words, the buyers aren't waiting.
So, though it's not our preferred beginning of a trade, we'd rather risk being in too early than being in too late.
To limit your risk on this position, you may want to take on a half-sized trade as opposed to your regular position size.
United Therapeutics Corp. (UTHR) - short/bearish
As for target levels, there are two - one very attractive, and one barely attractive. The latter is the support around $45.25, which held the stock up for the better part of last month. The former is $33.70, or the lower side of the gap from late May.
Though we're clearly gunning for the $33.70 mark, a slide to the $45 area would give us a great start, and some wiggle room.
United Therapeutics has a modestly-active options market, though spreads are a little bigger than average, and it may not be easy to take on an option trade of significant size. Still, it would definitely add some major leverage to the trading idea (particularly if UTHR stops falling at the $45 level).
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We've got several things we want to look at today, but first and foremost we need to take care of business.... either raise the stops or make exits on a few trades.
We pointed out in the blog yesterday how the surge from RealNetworks shares, though very enjoyable, wasn't likely to jump-start a beeline move to higher highs... RNWK is just too volatile to expect that. However, the fact that its wild swings are indeed taking the stock to new multi-year highs - even if erratically - is still plenty bullish.
Needless to say, that's why we're not sweating today's slight dip. In fact, the dip could get very big and we still wouldn't sweat it.
The only things you may want to do are (1) disregard the original resistance line we were watching, since it's been broken three times now, and (2) raise the stop to protect this 45% profit, maybe to $3.15 level or so. That's been support as well as resistance in RealNetworks' recent past, yet leaves the stock a little room to breathe.
Agilent Technologies Inc. (A)
We're not going to insert a chart of Agilent Technologies, since we can tell you just as easily the stock has continued to move higher, extending our gain to more than 50%. The move since our last update is big enough to merit raising the protective stop again. Be sure to leave Agilent a little room; maybe the $27 area would be a good exit point.
The trade we've looked at the least since its inception has actually turned out to be one of our best - Management Energy Inc. (MMEX) is currently 100% above our entry at $0.78. Clearly we want to protect the bulk of that gain, so let's raise our stops to whatever you're comfortable with. (I see support around the $1.45 area, but I'll let this one be your call.)
While it looks like the stock's overall momentum is slowing down as the accumulation spikes taper off, it's not dead yet. There was some pretty strong buying behind yesterday's push to new highs.
Whatever the case, it's time to apply a little maintenance to the trade.
There are also a couple of trades we need to just exit - both of them are short trades. They've been fine as a hedge, as their losses have been offset by other gains. But, being stubborn won't help us any in the long run.
Even though Thor Industries shares look like they're testing a pullback today after yesterday's jump, discipline is more important than hope; let's just go ahead and cut bait on this one. The decision to nip a small loss in the bud before it becomes a big loss is made easier by the way resistance at $27.45 - which had held up for a week or so - was broken with yesterday's surge.
I still contend THO is headed lower, but we've all got better things to do with our trading capital in the meantime.
EnerNOC, Inc. (ENOC)
EnerNOC's story is the same as the Thor Industries saga... I still expect it to move much lower before it moves higher again, but I'm not going to fight the trend. Resistance at $31.20 was broken last week, on average volume.
Let's go ahead and cover this short trade as well.
With all that being said, you should also know there are a few trades that we're not quite ready to bail out of yet, but they're hanging by a thread. In fact, you should probably go ahead and set up your own exit parameters since we may not be able to get an alert out to you in time to do you any good.
This trade's one of our oldest, and also a healthy one; EW is up about 20% since our January entry. In fact, it's on the verge of new multi-month highs. So what's the problem? Nothing major yet - we're just concerned about a potential triple-top at the $68.30 level. That's where this rally stalled, but that's also where the rallies stalled in June and July.
No big deal... just make sure you've got a line in the sand in case the triple-top worries are valid.
WMS Industries Inc. (WMS)
I probably should have bailed on this short trade as well, if I wanted to be a true stickler about my own trading rules. I let it go though, for two reasons. First, the recent push past resistance levels was completely anemic - we're barely in the red. And second, we really need to hang onto at least a little bearish/short exposure now.
The big gap from late July is still looming too.
Amylin Pharmaceuticals, Inc. (AMLN)
The support line that prompted the Amylin trade in the first place is being tested again after we got off to such a great start. As of right now, AMLN is a hair under it, but not decisively enough to say it's been broken. If the early September low of $12.28 fails, then it would be wise to pull the plug.
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