With the market headed into the red this morning - and possibly into the red for the better part of September - investors may be able to offset some of the broad decline with a few short-term trades. Among the best trading bets materializing right now are KKR Financial Holdings LLC (KFN), Chemed Corp. (CHE), SIRIUS XM Radio Inc. (SIRI), and Manitowoc Co. Inc. (MTW). Here's a more detailed look at how you may want to handle each.
Look out -
Manitowoc Co. Inc. (
MTW) is on the verge of breaking to new multi-month highs, and in so doing would also break above a pretty significant resistance level. The line in the sand is May's high of $7.90. For reference, Manitowoc shares reached $7.93 yesterday, and closed at $7.88.
Though one could reasonably argue MTW is simply testing a prior high again as a precursor to another pullback, this move is much different than the last. This time, there's a massive amount of volume flowing in.
If the $7.90 level can be hurdled once and for all, Manitowoc is massive longer-term opportunity. A return to $40 or more isn't out of the question... for the very patient. Short-term traders may want to buy on the dips and sell at the peaks though, rather than plow in with the buy-and-holders.
Before anybody gets excited about the recent (as in the last three days) strength from
Chemed Corp. (
CHE), you should know it's nothing we haven't seen before. More importantly, you should know the stock's not followed through very well on such moves.
The fact is, Chemed Corp. shares have a problem in the form of a major resistance line around $46.00. That's not a major surprise, since that's also roughly where you'll find the first key Fibonacci retracement level (38.2%) from the 2007 peak to the 2009 trough.
Yes, CHE could break though the ceiling this time, but with the way volume is fading as the sock moves higher into a strong headwind, the odds are certainly stacked against Chemed investors.
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Trading Alerts for KFN, MTW, SIRI, and CHE.-------------------------------------------
SIRIUS XM Radio Inc. (
SIRI) isn't exactly new to us. We posted a bullish technical outlook on the satellite radio stock
back on August 19th when shares were trading at $0.60. It's been a roller-coaster ride since then, but the SIRI gamble has paid off fairly well so far.
The key to our call then was the breakout move, above resistance around $0.57. It was not totally clear then if the breakout would take hold for SIRIUS XM Radio, but with its stock reaching $0.78 on the 21st, the effort is a lot more solidified.
Perhaps more importantly, the pullback earlier in September was stopped and reversed at $0.58.... pretty much where SIRI was hitting a ceiling just a few weeks earlier. When previous ceilings become support, those floors tend to be a little more meaningful.
Bottom line? Our bullish call on SIRIUS is being reiterated, and will hold up as long as support at $0.58 does. Better to buy on the dips though (of which SIRI makes plenty).
And finally,
KKR Financial Holdings LLC (
KFN) deserves some accolades for its unlikely break above a major resistance level at $3.18. The stock struggled with that ceiling throughout August, but once KFN broke past that mark on the 28th, it never really looked back.
Though KKR Financial Holdings shares are overbought in the short run (and should not be acquired at these prices), longer-term owners don't necessarily have to worry either. The big move higher abated a lot of the lingering risks that stem from uncertain investors.
As long as support at $3.18 holds up, KFN will be a 'hold'. If/when the stock breaks past $4.30, it will be a 'buy' again - a move to $16.00 with a checkpoint target of $11.00 isn't out of the question. Why? The buying volume is really cranking up for KKR Financial shares, and this chart has explosive recovery potential now that IPOs are back en vogue.
If you'd like to know when or if we issue trading alerts specifically for CHE, KFN, MTW, and SIRI, then be sure to subscribe to our free e-newsletter. It's delivered two to three times per week.
