Buys and Shorts for Today's Market

04/22/2013 9:30 am EST


After screening for the good and the bad, Joseph Parnes of ShorteX recommends some of each, either to buy or short.

Buys include Cree (CREE), a provider of energy efficient lighting (LED) technology. The company’s five-year growth rate for annual revenue is 23.6%, with margins of 36.3%. Shares are rocketing through primary resistance at $42 to $44 and secondary resistance at $47 to $50, with stepper upped-gap.

Lululemon Athletica (LULU) is a maker-distributor of athletic apparel for women, female youth, and men. Shares are pressured by the possible write-off on its yoga pants, reducing its revenue by $45 to $50 million. Manufacturing problems/quality control are a temporary setback.

A bullish bounce in call spread developing. Secondary support sits at $58 to $62. Shares are challenging primary resistance $64 to $66, and secondary resistance $68 to $70 is in the offing. They are volatile.

Oracle (ORCL) is a provider/licensee of database/application/middleware software. The company has seen dividend growth of more than 40% in recent years, which is indicative of strong financial performance. The current slowdown is temporary. Purchase of Acme Packet will strengthen its network capabilities.

The recent plunge could find secondary support at $28 to $30. Relative strength has been damaged temporarily. Short covering/accumulation could see refilling of the downed gap at $33 to $35. An attempt to challenge primary resistance at $32 to $34 in the offing.

Shorts include Juniper Networks (JNPR), a global provider of network infrastructure for enterprises, governments, and research organizations. Soft carrier spending and competitive/rapid disruptive changes are the cause for the company’s disappointments.

Shares are falling below the 50-day MA, approaching the secondary support at $18 to $19—its 200-day MA. Distribution is in a negative pattern. Shares are retesting the previous low at $14.01.

Magellan Health (MGLN) is a specialty managed behavior health-care company. The loss of the State of Arizona contract that generated $758 million in revenue annually was “a significant loss." The company is forecasting lower guidance in its earnings and revenue.

Shares have recently plunged through primary support at $51 to $53 and secondary support at $49 to $50. The rebound is too shallow. They could find resistance at $49.80 to $51.30. Challenging the previous low of $40.24 is in the offing.

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