Todays Big Stock: Dillard’s, Inc. Common Stock (NYSE: DDS)

Being that the market has had a nice recovery over the last week or two, it’s becoming a little uncertain whether the desired trades should be long or short. Does the market still have room to run, or is a sell-off looming? Might the market simply pull back before continuing higher? To be prepared either way, it never hurts to have stocks in your watch list that present you with trading opportunities regardless of what direction the market heads. One such stock that may fit that description would be that of Dillard’s Inc.

Dillard’s, Inc. (Dillard’s) is engaged in apparel and home furnishing retail business. The company operates in two segments: the operation of retail department stores and a general contracting construction company. As of January, 2011, the company operated 308 Dillard’s stores, including 14 clearance centers, and one Internet store offering a selection of merchandise, including fashion apparel for women, men and children, accessories, cosmetics, home furnishings and other consumer goods.

To review Dillard’s stock, please take a look at the 1-year chart of DDS (Dillard’s, Inc) below with my added notations:

DDS has recovered nicely over the last couple of weeks with the rest of the market. After finding support near the $40 level, the stock has rallied all the way back above the expected $45 resistance. That $45 level should now act as support on any pullbacks. On the other hand, the next level of expected resistance for DDS on the way up should be $50.  Lastly, a break below $45 should signal lower prices for DDS, while a break above $50 should mean a higher stock price to follow.

The Tale of the Tape: DDS has moved back up in between two very important levels for the stock: $45 and $50. Long trades could be made on a pullback to $45 or on a break above the $50 level. A stop should be placed under the level of entry. On the other side, if you are bearish, you could enter short trades on DDS if it rallies to $50 or breaks below the $45 level. In that case, stops should be placed above the level of entry.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade.  Capital preservation is always key!

Good luck!
Christian Tharp, CMT

Todays Big Stock: BJ’s Restaurants, Inc. (NasdaqGS: BJRI)

BJ’s Restaurants, Inc. owns and operates 103 restaurants located in California, Texas, Arizona, Colorado, Oregon, Nevada, Florida, Ohio, Oklahoma, Kentucky, Indiana, Louisiana and Washington. BJ’s restaurants operate either as a BJ’s Restaurant & Brewery, which includes a brewery within the restaurant, a BJ’s Restaurant & Brewhouse, which receives the beer it sells from one of its breweries or an approved contract brewer of its recipe beers, or a BJ’s Pizza & Grill, which is a smaller format, full-service restaurant with a more limited menu than its other restaurants. The company’s menu features its deep-dish pizza, its own handcrafted beers, as well as a selection of appetizers, entrees, pastas, sandwiches, specialty salads and desserts, including its Pizookie dessert. Its BJ’s Restaurant & Brewery restaurants feature in-house brewing facilities where BJ’s handcrafted beers are produced for some of its restaurants.

To analyze BJ’s Restaurants’ stock for potential trading opportunities, please take a look at the 1-year chart of BJRI (BJ’s Restaurants, Inc) below with my added notations:

As with yesterday’s SFLY, BJRI could be in the process of forming a common chart pattern known as a Rectangle. The pattern is being formed with the combination of the $40 support (green) and the $45 resistance (red). The $50 level was also important as support in May, June and July. If this pattern is in fact forming, the same declining volume that SFLY had is also in place with BJRI. Some traders will watch this pattern to see which way the stock breaks, either through the $45 resistance or below the $40 support, before entering a trade. More active traders could look at additional trading opportunities at $45 or on another pullback to $40.

The Tale of the Tape: Whether or not a potential Rectangle pattern is being formed, BJRI is trading within the range of two important price levels at $40 and $45. Long trades could be made if BJRI breaks through the $45 resistance or pulls back to the $40 support with a stop placed below the level of entry. Or, short plays could be made on a rise to $45 or on a break below $40 with a stop placed above whichever level is entered. If BJRI were to break below $40, the next level down for a long trade would be at $35 (blue).

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade.  Capital preservation is always key!

Good luck!
Christian Tharp, CMT

Todays Big Stock: Shutterfly, Inc. (NasdaqGS: SFLY)

Shutterfly, Inc. is an internet-based social expression and personal publishing service that enables consumers to share, print and preserve their memories and its technology, manufacturing, web-design and merchandising capabilities. Shutterfly provides a range of personalized photo-based products and services that allow consumers to upload, edit, enhance, organize, find, share, create, print, and preserve their memories. It generates revenues by producing and selling professionally bound photo books, greeting cards and stationery, personalized calendars, other photo-based merchandise and prints ranging in size from wallet-sized to jumbo-sized enlargements. It manufactures most of these items in its Charlotte, North Carolina and Phoenix, Arizona production facilities. It also sells a variety of print and photo-based merchandise that is manufactured for it by third parties.

To analyze Shutterfly’s stock for potential trading opportunities, please take a look at the 1-year chart of SFLY (Shutterfly, Inc) below with my added notations:

SFLY could be in the process of forming a common chart pattern known as a Rectangle. The pattern is being formed with the combination of the $41 support (green) and the $50 resistance (red). The $50 level was also important as support in April and June. If this pattern is in fact forming, the declining volume a trader would expect is in place. This decline in volume is the typical “calm before the storm” leading up to the breakout. Some traders will watch this pattern to see which way the stock breaks, either through the $50 resistance or below the $41 support, before entering a trade. More active traders could look at additional trading opportunities at $50 or on another pullback to $41.

 

The Tale of the Tape: Regardless of the potential Rectangle pattern being formed, SFLY is trading within the range of two important price levels at $41 and $50. Long trades could be made if SFLY breaks through the $50 resistance or pulls back to the $41 support with a stop placed below the level of entry. Or, short plays could be made on a rise to $50 or on a break below $41 with a stop placed above whichever level is entered.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade.  Capital preservation is always key!

 

Good luck!

Christian Tharp, CMT

Todays Big Stock: Dollar Tree, Inc. (NasdaqGS: DLTR )

Yes, the stock market has had several rough weeks over the past few months and most stocks seem to be trending lower. Even though I have yet to find any stocks that haven’t sold off to some extent, there are a few stocks still maintaining an overall trend higher. In addition, there are the rare few that are near 52-week highs. Stocks that have held their ground through the current market sell-off, and are near their 52-week highs, could be the ones that rally strongest if the market eventually does move higher.

As I’ve mentioned in previous articles, when it comes to entering a stock hitting a 52-week high, I prefer to look for ones hitting a “NEW” high. To me, his would be a stock that hasn’t hit a new 52-week high in quite some time. In addition, and more importantly, I want the stock to have broken through a key area of resistance. This way I know that it wasn’t just any move higher. One such stock that fits that description would be DLTR (Dollar Tree, Inc).

To review Dollar Tree’s stock, please take a look at the 1-year chart of DLTR (Dollar Tree, Inc) below with my added notations:

As you can see, DLTR has been in a large sideways move for the last 3 months while running into a clear resistance at $70 (red). Even though the market has caused most stocks to break lower, DLTR has held trend so far. DLTR also appears to have strong support at $60 (green). If DLTR could break through $70, it would be breaking to both a new 52-week high and through a clearly defined resistance level. Also be aware of the “min-level” at $65 (blue) during any pullbacks.

 

The Tale of the Tape: While stuck in a sideways move, DLTR has formed a key resistance level of $70, which would be a 52-week high breakout if DLTR were to break above it. This should signal higher prices ahead for the stock. A long trade could be entered if DLTR breaks out above $70, or on a pullback to $65, with a stop set below the entry point either way. If the market were to sell-off substantially, and bring DLTR back down to $60, a long position could also be entered there with a stop below that level.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade.  Capital preservation is always key!

 

Good luck!

Christian Tharp, CMT

Todays Big Stock: CEPHEID (NasdaqGS: CPHD)

With the stock market having had several rough weeks over the past few months, most stocks seem to be trending lower. Although I have yet to find any stocks that haven’t sold off to some extent, there are a few stocks still maintaining an overall trend higher. Stocks that have maintained their trend higher through the current market sell-off could be the ones that rally strongest if the market eventually does move higher. If nothing else, these might be stocks that drop the least on any future market sell-offs. One such stock that may fit that description would be Cepheid (CPHD).

Cepheid is a molecular diagnostics company that develops, manufactures, and markets fully-integrated systems for testing in the clinical market. The company’s systems enable molecular testing for organisms and genetic-based diseases by automating otherwise manual laboratory procedures. Its systems integrate these steps and analyze biological samples in its test cartridges. Cepheid’s two principal systems are the GeneXpert and SmartCycler. The GeneXpert system, its primary offering in the clinical market, integrates sample preparation in addition to deoxyribonucleic acid (DNA) amplification and detection. The GeneXpert system is designed for a range of user types. The SmartCycler system integrates DNA amplification and detection to allow analysis of a sample.

To review Cepheid’s stock, please take a look at the 1-year chart of CPHD (Cepheid) below with my added notations:

Although CPHD had a rough couple of weeks at the end of July and into August, the stock has continued its overall trend higher and is holding its ground pretty well. After pulling back to its strong $30 level (green), the stock has bounced and is making a move back up towards its $35 resistance (red). If CPHD can break through that $35 resistance, the stock should make a run back to its $40 high (blue). However, if the market stalls and starts to sell-off again, CPHD will probably pull back down to the $30 level. A break of that level would pave the way for lower prices for the stock.

The Tale of the Tape: CPHD is currently in a sideways move, but is still in an overall trend higher. CPHD has an important level at both $30 and $35. A long position could be entered on a pullback to $30, or even better, on a breakout above $35 with a stop below the level of entry. If you have a more bearish view, short trades could be made at $35 or if the stock were to break the $30 level of support.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade.  Capital preservation is always key!

Good luck!
Christian Tharp, CMT