We're struggling to hold the gap up no traders wanted to see this morning. Unfortunately, there is nothing we can do to change that. This is a finicky short-term market, so I like the idea of taking smaller positions and spreading out any long exposure I have, which is only about 25% right now.
One reversal that did catch my eye today is St. Joe Corp. (JOE). The last year hasn't been particularly good to JOE, as it is down nearly 40%, but the last two days have revitalized the stock a bit. For the first time in quite some time, there is a solid bullish reversal pattern in the long-term parabolic stop and reverse. Add to that the increase in volume on this reversal and the very strong Commodity Channel Index (CCI), and traders should take note. The last time we saw the CCI do this was back in March after a similar reversal. That trigger was good for a 10% move higher.
If you are staying conservative here, then you would prefer a close over $16.50, but I think this one is worth a shot right here for at least half a position. The stop is any close under $15, but the upside targets are $17.25 and $18.25. Options are available and the July calls have seen good action the last few days. I'm just going to buy the stock rather than the calls at the moment. Perhaps it will squeeze the 10% short interest a bit more.
If real estate isn't your thing, then maybe energy here. Phillips 66 (PSX), which seems to have a chart that screams, "I love you. I hate you. I love you...," is almost back in the love column. Then again, it isn't too far from the hate either. Over $82 and this should offer several quick dollars to the upside, but under $79 and we're likely $2 to $4 lower in a hurry. The RSI, volume action and CCI all favor the bulls here, but this one may be a bit aggressive for most.
I would absolutely wait for a triggered entry here and not anticipate. Once names like PSX and Valero Energy (VLO) start to move, there is often some time and distance to it, so catching every penny isn't necessary to achieve a solid return. This one is worth watching, but doesn't look actionable quite yet.
