The Oxen Group Watchlist – May 16, 2011

The market is making buys tough. A lot of the stocks on our watch got slammed down today. Actually, they dropped so much that DKS actually is no longer a momentum play but actually could be a nice value play for a bounce back tomorrow. DKS is a strong company that has dropped over 5% today, and we continue to watch this one. We would love to buy it if it can get back over its 20-day EMA at 40.50.

We will also continue our watch of Buckle (BKE). This company is actually up on this down day and is looking strong. If we can get a really solid recovery day, BKE would definitely breakout and could make some very significant strides.

Buy Pick Virtual Portfolio

CVE – Cenovus Energy was upgraded today by RBC Capital. The upgrade sent shares of a stock that has little to celebrate as of late soaring higher. The stock moved up 3% on the morning before hitting a top and falling as oil prices began a significant decline intraday. The stock is now trading in the red. The stock has been dropping since the beginning of the month with the steep decline in crude prices. Yet, this is a solid company that has a mixture of crude (oil sands) and natural gas. They have not performed exceptionally on their earnings, missing estimates consistently. Yet, with an upgrade and recent price declines, if we get a nice up day from oil in the next couple days, CVE could be ready to make a move.

GME – Gamestop is one of our top-rated longterm companies we cover at The Oxen Group. We have a PT on GME at $29 with a Hold rating, but it is one of our holdings in our virtual portfolio. We like this company a lot with loyal customers, strong rewards program, and a growing online presence with digital downloads. The company has taken market share from other big names like Best Buy (BBY), and we love this company to continue to grow. Much like we may be doing soon, Wedbush raised their price target on the stock to $33. Additionally, the company has earnings this Thursday. The company jumped tremendously on Friday from good news on video game sales and a big quarter is expected. We will look for a nice rebound on the stock as it has a very bullish looking chart right now.

Short Sale Virtual Portfolio

Oil seems to want to continue down, and natural gas, despite is up day, should probably come under weakness as well if a major commodities pullback continues as is expected.

Two stocks that worry me at their current technical levels are Hess (HES), which we recently owned but sold on the selloff and Chesapeake Energy (CHK). Both stocks are right at key support lines and price channels. If these commodities continue down and they break these levels, HES and CHK could be in for a downward breakout with no support below it. The key line for HES is 75, and the stock is right below it. It most likely will not fly down today, but another big drop in oil, HES will be primed for a short. CHK has been in free fall and is in a downward price channel. It appears to be ready to break that downward channel and has not quite broken through just yet. Similarly to HES, a leg down in natural gas could spell trouble for CHK.

Good Investing,

The Oxen Group