Current Trade Idea Updates
Baker Hughes (BHI)
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March 26: Baker Hughes (BHI) triggered our entry price today, although it closed back below it to form a small tail. Given the broader market weakness today the lack of momentum is not surprising, and this trade idea is in motion.
March 25: Baker Hughes has been forming a wedge pattern since starting the year in volatile fashion. It has reclaimed the support of its 8- and 21-day EMA, showing healthy strength. A break and close above $63 could open the door for potential new highs. Stops could be placed at $61 with a target at $67.
Facebook (FB)
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March 26: Facebook (FB) fell 6.95% today after last night announcing another large acquisition ($2 billion for virtual-reality headset creator Oculus). The stock fell short of our $60 downside target by 38 cents during today's sell-off, but due to its highly oversold condition we go ahead and remove it from the short watch-list.
March 23: Facebook broke below $66.82 to trigger our short entry price on Friday. This trade idea is now in motion. You could use $69.60 as your stop-loss level.
March 20: Facebook has been forming a micro Head and Shoulders pattern that points to lower prices if the stock breaks below the neckline at $66.82. The measured move from this pattern gives us a target of $60 where it would re-test the earnings gap. Stops could be placed at $69.60 in this trade idea.
New Long Idea
Diamondback Energy (FANG)
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March 26: Diamondback Energy (FANG) has been building a tight base above its 21-day EMA over the last three weeks to digest a strong rally in January and February. The stock could regain momentum with a break above our entry price of $66. We place our target on this trade idea up at $72 with stops in the bottom part of the range at $63.
New Short Ideas
America Movil (AMX)
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March 26: America Movil (AMX) has shown significant relative weakness so far this year, currently trades below all moving averages and during the month of March has been building a bear flag pattern that could point to further downside. The stock could accelerate to the downside out of the slightly ascending bear flag pattern with a move below $19.41. Our target on the trade idea is $17.50 with stops at $20.35.
Questcor Pharmaceuticals (QCOR)
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March 26: After leading the market higher for much of the last several years, the biotech sector have been getting hard recently. Questcor Pharmaceuticals (QCOR) is part of that group, and since selling off sharply over the last three days of February has been holding lower in a tight bear flag type pattern. The stock could accelerate to the downside with a break below $60.50. Our target on the trade idea is $50.80 with stops at $65.00.
Deutsche Bank (DB)
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March 26: Deutsche Bank (DB) has sold off sharply since mid-January and has been trading below its 200-day EMA since early March. Western European economies are particularly exposed to financial risks in Ukraine and Russia, and Deutsche Bank has been weighed down by that ongoing crisis. While the stock has made attempts to bounce, it has ultimately been forming a lower-level wedge pattern to digest the losses. Deutsche Bank could resume its downside momentum with a break below Tuesday's low of $43.91. Our target on this trade idea is down at $40, which is a major support level from last Summer. Stops could be placed in the top end of the wedge at $45.64.
Scott Redler is long PRAN calls. Steve Levay is long PRAN calls. Daniel Darrow is long FANG calls.