The June 6, 2013 Phoenix Letter
Intro By Scott Neptune
We re-opened the Phoenix Letter to new subscribers for the first time in a while and we were greeted with an eager crowd. Makes sense, considering how this year has gone. We welcome you and will continue to work hard for you, using technical analysis and a strong focus on key individual plays to minimize risk and maximize rewards. We always begin with our spotlight stock, review current "in play" trades and then make any new recommendations. If you have any questions, feel free to email our on call trader at
[email protected].
This week is one of those rare occasions where the trade really jumps out at you without having to look very far. The Dow closed below 15,000 for the first time since May 6th and our go to etf in that situation, VXX, closed above the key 20 level. This sets up for a fantastic risk/reward trade that favors the reward from 3:1 on the low end to 8:1 on the high end. The market could fight back above 15,000 but with so much momentum and reward to the downside, we have to put something in play that is going in the same direction.
We will go over the full details for the trade below.
First, let's update the current in play trades.
FXCM (FXCM): Financial/Investment Brokerage.
We still view it as an appealing acquisition for a big name financial broker that wants to get involved or further involved in Forex. We entered at 13.85 and it hit a 52 week high of 15 but closed down yesterday, at 13.89, with the market sell off. *It paid a .06 dividend on 6/4.
Stop: 12.70
Target Sell: 20.00
Microsoft Corporation (MSFT): Technology
We entered this trade at 28.50 seven weeks ago and as of this writing, it's at 34.78. On 5/14, it paid a .23 dividend.
Stop: 33.80
Target Sell: 37.75
American Express. (AXP): Financial/Credit Services
We entered this trade at 70.25 and have moved up the stop several times since. This week's stop of 74.60 was well placed as the low was 74.64. We will be lowering the stop slightly to 74.40 to prevent being shaken out during the 9:30 am shuffle.
Stop: 74.40
Target Sell: 79.75.
The Hain Celestial Group. (HAIN): consumer goods/processed & packaged goods
This trade was fantastic because of the instant response. We targeted it between 65.25 and 65.70 for the week of May 16th. On the first day, it opened at 65.08 and then triggered our entry at 65.25, hitting 67.22 that day. The stock stalled at 70 and hit our stop of 67.70 this week for a gain of 3.75%. We are now FLAT.
CROCS, Inc. (CROX): consumer goods/textile-apparel footwear and accessories.
We entered this trade on 5/21 at 17. It had been in the money for a couple of weeks but got pulled down with the overall sell off. We are still in the trade which confirms it's individual strength. We will not be adjusting the stop or upside target sell on this trade.
Stop: 16.10
Target Sell: 21.75
Dunkin' Brands Group, Inc. (DNKN): services/restaurants
We entered this trade at 40.10 and our 39.40 stop was hit for a loss of 1.74%. This trade came just ahead of the market downturn so it didn't have much of a chance but the loss was limited. We are now FLAT.
NEW TRADE ALERT
iPath S&P 500 VIX ST Futures ETN (VXX):
This was our spotlight trade.
Target Entry Between: 20.25 and 20.80.
Stop: 19.40
Target Sell: 24.75
United Rentals, Inc. (URI): services/rental & leasing
We bought this stock at 50.30 and sold it last week at 57.70 for a gain of 14.71%. It's now back near our previous entry and we are looking for another opportunity. *Make sure it gets within our range before entering. The green line in the chart represents the trade we just made that we are looking to repeat.
Target Entry Between: 50.25 and 50.75.
Stop: 49.40
Target Sell: 57.70
Have a great week everyone!
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