It's only been about three weeks since our last Trader's Corner column, but what a productive three weeks it's been! If you aren't taking a look here on a regular basis, we think you're missing some pretty nice trade ideas.
Take Incredimail (NASDAQ: MAIL) for instance. It's up 28% from October's levels when we first put it on your radars, and it's made a habit of making higher highs and higher lows. Based on the progress here, we think it may be time to raise the stop in order to protect any profits. How about using last month's low of $7.15 as a bail-out point?
Sprint Nextel (NYSE: S) is also up nicely since we took our first look in late February, gaining 11.3% during that time. Shares are also very close to reaching new 52-week highs, having bullishly broke out of the wedge shape formed in the latter part of last year. Seeing how we have some room between here and the entry area, let's up the stop to April's low of $19.03.
Our two trades from March remain in the plus column. Cogent (NASDAQ: COGT) hit $15.11 in mid-May, meaning this stock at one point had been as much as 12% above the trading level we saw back when we first suggested it. Though it's eased off a bit since then, we still like two things about the chart. One, it can be explosive, and two, even the last few days worth of weakness have shown us relatively bullish bars, where the closes are at the upper edge of the intra-day range. We'll let it be for the time being.
China-Mobile Limited (NYSE: CHL) may finally be getting the traction we figured it was capable of getting. After we presented the idea in late March, we immediately got a pop from $44.85 to as high as $48.90 - a 9% move. The buying subsided though, as the stock sank back to a low of $44.85. Ever heard the phrase "it's darkest before dawn"? Looks like it applies to CHL - the stock rallied to $48.20 last week, pushing it to a gain of 6.9% from our entry spot. What's different this time around is volume....there's plenty of it to give this ADR a good shot at staying in a bullish mode.
Ironically, our two youngest trades are also two of the most fruitful ones we still have on our plate. Ford (NYSE: F) is up 8.8% since the beginning of the month, hitting a new high for the year in the middle of last week. It looks to us like Ford is revving its engines, and rocking the car out of the mud. The buying effort is good, but if the stock can get out of the ditch between $7.50 and $9.00, then this thing could take off like a drag-racer.
We also discussed Aetna (NYSE: AET) on the first day of May. Good thing too....it's higher by 11.2% since then - mostly on some chatter about it being a potential buy-out candidate. Maybe it is, and maybe it isn't. Either way, the stock is acting like a champ. In the wake of the big move, it might be prudent to raise this stop too. We think $49.50 sounds about right.
So what do we have on tap for today's edition of the Trader's Corner? As usual, a couple of ideas have managed to get our attention.
Ever heard of Deltic Timber (NYSE: DEL)? It's not exactly a mainstream name, partially by size, and partially by industry. Being one of the S&P 600's small caps, it doesn't get much media love. And, being in the timber/lumber arena doesn't exactly scream 'look at me' either. However, like we've mentioned more than a few times, some of the best opportunities come from the market's most obscure corners.
We think Deltic has a great-looking long-term chart. The short-term view may not be quite as nice, but that's the attraction here - an opportunity to jump in at what looks to be something closer to a low rather than a high. Besides, if you look real closely, you can see the last month or so has actually developed a little upside momentum.
One of the other nice qualities of a timber company is how natural resource stocks tend to trade independently of the rest of the market. If the market's current vulnerability starts to become a reality, we expect Deltic to resist at least the worst of that bearish tide.
We think $66.81 sounds like an achievable but worthy target area. A stop of $50.80 feels about right...it's sandwiched in-between the 50 and 200 day moving average lines.
Our curiosity was also peaked by Intervoice Inc. (NASDAQ: INTV). It's been struggling since 2004, but some recent strength is a small hint of a recovery...finally. If this is indeed the beginning of a full rebound, then the potential here is just enormous.
To really illustrate the magnitude of what the opportunity looks like, we had to zoom out to a weekly chart. Compared to 2004's high of $18.00, the current trading level of $7.51 looks like a bargain. So why would now be the right time to look at INTV? The recent cross back above the 200 day line, this time with some decent volume behind it.
Volatile and risky? Definitely! That's why we encourage anyone interested to pick and choose their spots....if they choose to play at all. If this thing can get past January's high of $8.10 though, it would be a new 52-week high, and perhaps the final ingredient needed to blast off again.
Just for starters, we'll suggest a target of $9.50, with a stop of $6.71. However, given the nature of this chart, we're pretty certain some ongoing trade 'management' will be merited....especially when it concerns INTV's upside potential.
On a side note, we know we've brought up the market's potential downside a couple of different times, yet we're still looking at long trades. If we get to the point where overwhelming bearishness just eliminates all good long/bullish opportunities, then we'll adjust. Until then though, there seems to be enough upward momentum - at least on a stock by stock basis - to continue putting ideas on our radar.
If things get bad (i.e. bearish) enough to where no ideas look strong enough to talk about, we can always fall back to bearish or 'short' ETFs....which go up when the market goes down. We'll look at those in more depth if and when the need arises.