The Short and the Long of It

06/12/2013 6:30 am EST


As he does each month, Joseph Parnes of ShorteX has recommendations for both the short and the long portions of your portfolio.

Buy Ford Motor (F). The major car manufacturer is increasing its capacity by 200,000 units. The summer break is being shortened, and the company will increase production by 40,000 units. European demand is close to bottoming out, which is causative for higher profit and cash flow.

The shares are breaking out from secondary resistance at $13.80 to $14.20, which is indicative of higher highs.

Buy Tesoro (TSO). The oil/gas/petroleum products marketer's recent quarter's net income increased by 66.1%, to $93 million from $56 million. The company's current debt-to-equity ratio is 0.38. The strong earnings growth of 71.79% is causative of TSO's surged price of 163%-plus.

The shares are in correction mode and could find primary support at $56 to $57. Challenging the previous high of $65.75 is in the offing.

Short Facebook (FB). The social network Internet company is facing a deteriorating technical pattern, whereby the steep decline broke through its primary support at $26.10 to $27.80 and secondary support at $24.90 to $25.80.

Declining relative strength is contributing to negative distribution. Exiting is rampant. Challenging the previous low of $17.55 is in the offing.

Short BHP Billiton (BHP). The world's biggest mining company is scaling back capital expenditure from an expected peak of $22 billion in the year through June. Alas, massive investments to expand capacity at a time of falling mineral prices is being questioned by the major shareholders.

The recent rebound is too shallow. The shares met resistance at $68 to $70. They are breaking down through secondary support at $67 to $69—not a good sign. Challenging previous low of $59.87 is in the offing. Volatile.

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