Value Level: Price at which to enter a GTC limit order to buy on weakness. The letters mean; W-weekly, M-monthly, Q-quarterly, S-semiannual and A-annual. Pivot: A level between a value level and risky level that should be a magnet during the time frame noted. Risky Level: Price at which to enter a GTC limit order to sell on strength.
Buy-and-Trade Strategies for Today's Woodshed Stocks:
Cliffs Natural Resources ( CLF) ($28.84) declined from $36.61 on Feb. 12 to $28.62 on Feb. 19 after missing EPS estimates by 16 cents earning 41 cents per share. The stock is rated a hold with a negative weekly chart profile with its five-week modified moving average at $33.55. My monthly value level is $28.53 with a weekly risky level at $34.40. Coinstar ( CSTR) ($54.55) was taken to the woodshed to a low of $47.25 on Feb. 8 despite an earnings beat of $0.20 reported on Feb. 7. The stock rebounded as investors realized the over-reaction to the downside to a high of $56.28 on Feb. 14. The stock is rated a hold with a positive weekly chart profile and the five-week MMA at $51.17. My weekly value level is $49.24 with an annual pivot at $50.73 and a semiannual risky level at $54.90. The power of the pivots supported this stock. Humana ( HUM) ($73.01) declined from $77.99 on Feb. 15 to $69.78 on Feb. 19 after indicating that U.S. government Medicare Advantage payment rates were less than the company expected. The stock has a buy rating and a neutral weekly chart profile and the five-week MMA at $73.93. My monthly value level is $65.01 with a semiannual pivot at $77.58 and weekly risky level at $79.07. NetGear ( NTGR) ($34.13) reported an earnings miss of 4 cents a share on Feb. 12 and took another trip behind the wood shed with a low of $32.10 on Feb. 13. The stock is rated a hold with a negative weekly chart profile and the five-week MMA at $36.69 and the 200-week simple moving average (SMA) at $29.70. My weekly pivot is $35.75 with a quarterly risky level at $38.62.