By Joey Vazquez
We continue our search for the most attractive companies to buy and sell right now. Today the markets extended gains into a second day, after better-than-extended economic data. Today, I strive to find attractive companies with strong or weak fundamentals and technicals that will outperform or underperform the markets. Should you buy or sell these companies?
Coca-Cola Co. (KO):
(Click charts to enlarge)
Coca Cola has enjoyed a solid year netting over 10% year to date. As reported by The Wall Street Journal, KO has been investing heavily in emerging markets such as China, Brazil and India. KO has also been cutting costs and taking market share from PepsiCo (PEP). KO`s stock is trading at its highest level since the 1990s and it looks poised to continue climbing for the year. KO recently bounced off support from its pivot point, 20-day and 50-day MA. KO now has very solid support at the $74.68-$74.99 area. Its MACD has just bounced off its signal line and will look to go higher. KO CCI indicator has just entered the +100 area giving us a bullish indicator. Its stochastics have also crossed the signal line and are headed higher, confirming our bullishness.
Trade Idea: Go Long KO
Entry Range: 76.00- 76.35
Targets: 76.90, 77.66
Stop Loss: 74.62
Our Entry: 76.14
Walt Disney Co. (DIS):
Disney has been in a very strong upward price channel since the start of October of last year. DIS has hit a new 52-week high in almost every month since October and is up a whopping 70% since then. The Wall Street Journal reported Pixar`s latest film "Brave" captured the top spot at the weekend's box office, earning DIS $66.7 million in its first weekend. DIS also recently dumped THQ (THQI) and joined forces with Activision (ATVI), who made great games like World of Warcraft and Call of Duty, to help its video game segment of the company prosper. DIS recently bounced off support at the $46.93 area and looks poised to break its resistance at $48.14. Its CCI indicator indicates it will do so as it's about to enter the favorable +100 area, indicating the start of a new bullish trend. DIS' OBV indicator has been in a strong upward channel since early May and this trend doesn't appear to change anytime soon. Its stochastics is on the verge of crossing its signal line up, which would give us another bullish indicator.
Trade Idea: Go Long DIS
Entry Range:47.83- 48.08
Targets: 48.43, 48.91
Stop Loss: 46.99
Our Entry: 47.95
Nordstrom Inc. (JWN):
Nordstrom has not been able to get back on track since the bearish month of May took the stock for a ride. JWN continued its weakness today as Citigroup (C) cut the ratings of upscale retailers Macy`s Inc. (M), Saks Inc.(SKS) and JWN on concerns that high-end spending may slow in the second half of the year. JWN was downgraded to Neutral from Buy, and its price target was cut subsequently. JWN very recently tried to rally, but the stock hit strong resistance from its top BB and has broken down since. JWN broke down through its crucial 200-day MA and middle BB price channel. Its chart is a couple of bearish trading sessions away from forming a death cross, which would give us a very bearish indicator. JWN MACD looks poised to break through its signal line, which would give us another strong bearish indicator. Its CCI indicator is headed into bearish territory and its stochastics continue to go lower, confirming our bearishness.
Trade Idea: Go Short JWN
Entry Range: 47.39- 47.14
Targets: 46.78, 46.31
Stop Loss: 48.21
Our Entry: 47.26
Alcoa Inc. (AA):
Alcoa has seen a 44% decline in its stock price over the last 12 months. The bad news continued today as Deutsche Bank cut AA's outlook for its third-quarter earnings estimate. Deutsche Bank cited lower aluminum prices and production cuts, and AA's 7% growth slowdown as the main reasoning for the earnings estimate slash. AA's pivot point is showing strong resistance as it recently failed to break it and subsequently broke down through its 20-day MA. Its MACD indicator will look to break down through its signal line and start a new bearish trend. AA's CCI indicator is anticipating going into the -100 area, which would indicate the stock will see more weakness. Its stochastics continue to travel lower, confirming our bearishness.
Trade Idea: Go Short AA
Entry Range: 8.45-8.40
Targets: 8.33, 8.25
Stop Loss: 8.59
Our Entry: 8.42
Disclosure:I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
