| D.R. Horton (DHI) -- Monthly |
I've shown a monthly chart of D.R. Horton in order to put the time and price element in perspective. I've also highlighted the last three peaks that form a bearish head-and-shoulders pattern. With RSI moving lower, but not yet oversold, the downward momentum could persist for a while. This short idea is really meant to be a long-term trade -- just flip the chart over in your mind and think about it. If you saw this same pattern, only upside down, it would be an inverse head-and-shoulders pattern. That's the type of pattern that would have you licking your chops because of all the upside potential. Get used to the idea that some stocks can be held short for an extended period of time. On a
Updates on Previous Picks
- Accredited Home Lenders (LEND): Last week I made a boo-boo. I suggested Accredited Home Lenders as a short idea and completely forgot about the pending sale to Lone Star Fund. Many folks contacted me about this, wondering whether I knew something they didn't. My answer is no -- actually, you knew something I didn't. There's nothing more to say except that I'll try to do better next time. So I'm taking Accredited Home Lenders off the watch list as there's no short here.
- Arrow Electronics (ARW) has been trending lower, but
the stock advanced more than 4% on Tuesday. The current stop at $40.90 remains intact. Shares closed at $39.97 Tuesday.
- Assisted Living Concepts (ALC) hit its stop at $10.75 last week and was closed out.
- Continental Airlines (CAL) hit its stop at $36.50 on Tuesday and was closed out.
- Goldcorp (GG): The
short entry was at $25, and the adjusted stop is currently $24.55. No change in that level. Shares closed at $24.41 Tuesday.
- Las Vegas Sands (LVS): After trading a couple of points below
the short entry, Las Vegas Sands rallied to trigger the stop and has been closed out. While I might be accused of keeping stops too tight, in light of the bull market we are enjoying, I don't give short positions much room.
- Mattel (MAT): Since the
short entry at $27.75, Mattel has been moving lower and fell to $24.90. The stock is firming up at this level, but remains below the current buy stop of $26.10. No change in the stop. If Mattel runs back above $26, there's no reason not to just take the profit and move on. Shares closed at $25.64 Tuesday.