Stock Market Watch for Wednesday April 08, 2009

Tuesday’s Market Recap:  Stocks fell for second day in a row.  Traders, bracing for a grim earning season, took some profit off the table from the mammoth rally in stocks for 4 consecutive weeks.  There were no major events that could have pushed the markets up.  The trading volume was very light, just as on Monday.

The Dow lost 186 points or 2.3% to 7790, and the S&P 500 was down 20 points or 2.4%, at 816. The Nasdaqshed 45 points or 2.8%, to 1562.  The losses were broad based.  Only 2 Dow members ended positive for the day, and about 90% of S&P components ended the day in red.  Commodities trading was mixed.  Crude closed at $49.28 per barrel, down 3.5%. In contrast, Gold rose $10.10 or 1.2% higher to close at $883.30 per ounce.

TaurusTrader portfolio had a mixed day. Position in WFC was stopped out for 8.4% loss. If you remember, TaurusTrader still has a small position inWFC, which was bought @ $13.75, a couple of days earlier. At the end of the day, the portfolio had 12 positions – WNR, AGU, AMR, FCN, HON, HSP, WDC, TNA, EXP, FMX, CMED, andOMTR. And, small positions in WFC and MS. BCE andRRC are still on the focus list, but have not hit the ‘buy limit’.

Market Watch for Wednesday, April 08:  The Dow component Alcoa (AA) unveiled its latest quarterly result, thus kicking off the new earning season.  AA reported a loss of 59 cents a share, about 3 cents worse than the estimate, but the revenue came in slightly ahead of consensus.  AA Shares were slightly lower (about 1.5%) in after hour trading. 

On the retail front, the home goods store, BBBY also reported after the markets closed today and topped the estimates.  Consequently, BBBY shares were trading up over 12% in the after hour trading.

However, the ag fertilizer giant MOS provided a dismal report.  The net income of MOS fell 88%  due to rising materials costs and falling sales volumes.  The company also warned potash sales would continue to be weak in the fourth quarter.  MOS shares fell about 6%  late trading. 

There was a lot of optimism around MOS.  If you had recently watched Fast Money on CNBC, you know what I mean!  However, if you were a regular reader of this blog, you probably were not surprised by the poor quarter by MOS.  In my blog on April 1, while talking about DE, I said ” ….. In fact,  …… there was a newly released negative USDA report that could potentially impact fertilizer and ag equipment stocks. US farmers will be planting more soybean acres, a crop that requires less fertilizer and equipment utilization compared to corn …….”.  So, you were warned ahead of time! 

Ag and fertilizer stocks will be affected tomorrow in sympathy with MOS.  I’ll watch our AGU position carefully, even though AGU is not similar to MOS in its business dealings.  AGU makes bulk of its revenue in selling and distributing seeds, ag chemicals, and nitrogen fertilizer.  And, it reported a stellar quarter a few days ago.

So, it should be a interesting day of trading on Wednesday.  The earning reports discussed above may have some impact on overall market at the open, but probably a minimal impact toward the close.  Again, for the quarter in general, the  expectations are very low, and nobody expects the first quarter earnings to be good. Companies were conservative and lowered their expectations substantially. Very few have warned recently. This could mean that there may be relatively few negative surprises.

Potential market moving events on Wednesday are – 1) Federal Reserve will release its March meeting minutes, which should provide more details on the state of the economy. Also, 2) SEC is expected to discuss proposals related to the re-institution of the uptick rule for shorting stocks.

TaurusTrader swing portfolio is long in 12 positions and is well diversified.  I do not want to add any new position at this time of market uncertainty.  However, I will watch my positions closely with tight stops.

If there are questions or comments, please do post ….

Happy trading …

Best regards,

TaurusTrader

http://www.taurustrader.wordpress.com

Market Watch for Thursday – April 2, 2009.

Wednesday’s recap: What a way to begin the new quarter … down by triple digits at open and up by over 150 points by close!! Some sense of optimism is slowly building about the economic recovery. Today’s dismal opening was attributed to a couple of factors. News from Asia were not good. China’s manufacturing index came in lower than expected, and Japan’s business sentiment among big manufacturing firms came in at a record low. Further, prior to markets opened, the ADP report indicated a dismal private sector employment condition, a drop by 742,000 in March. This figure was higher than anticipated. So, the markets opened in deep red.

As the day progressed, small doses of good news trickled in, and the markets responded. The next economic reports came in showed a rebound in pending home sales and improving manufacturing activity. Despite massive public protests, there’s some good news out of G-20 meeting. British Prime Minister Gordon Brown said that the G20 was close to agreeing on global reforms for the financial system. This was not expected.

The Dow rose 153 points or 2%, to 7762. The S&P 500 index gained 13.2 points or 1.7% to close at 811 and the Nasdaq picked up 23 points or 1.5 percent, to close at 1552. Crude oil fell $1.27 to settle at $48.39 a barrel. Gold prices rose by $2.70 to $927.70 an ounce. The dollar was mixed – slightly weaker against the yen, but was stronger against the euro and pound.

Chemicals, gold miners, banking, and technology stocks had a stellar day. TaurusTrader had an OK day. No big gain or losses. No position was stopped out. However, it was a decent day for day trading. Had a nice success with TNA and FAS among the picks.

I also initiated small positions in MS ($22.30) and WFC ($13.75) at the open today ahead of FASB’s decision on mark to market scheduled for tomorrow. I wrote about it in my yesterday’s blog.

Stock Picks for Thursday, April 2: There are good news coming in small doses. The worst is not over, yet. The pain is still there, but there is some optimism building that the pain from recession is beginning to recede. If FASB modifies the mark to market rule tomorrow in favor of banks, it should bode well not only for the banking sector, but also to the whole market in general. The markets may have already baked in for a slight disappointment in Friday’s jobless data. Unless it comes out real bad and out of whack, the markets should do fine. But, any improvement in employment numbers, however unlikely, should help vault markets higher …. Omen!!

I would like to add the following stocks to TaurusTrader swing portfolio:

1. EXP – Buy above $25.50, stop at $22.75, target $28.50 (volatility is high)
   
2. WDC – Buy above $20.01, stop at $17.98, target $23.00
3. HSP – Buy above $31.41, stop at $28.60, target $35.50
4. TNA – Buy above 18.60, stop at $15.75, target 21.50 (very volatile and risky)

Chemical sector is showing some momentum.  If you have additional capital to commit, I would suggest looking at DD and DOW.  Both these picks also have strong ag portfolio that compliment  their chemical business.

I’ll not day trade tomorrow as I’ll be away on my other business interest that I detailed in my earlier post on Wednesday.  However, if interested, the financials may again provide some opportunities for profitable trades.  My favorite ones are – WFC, FAS, and MS.

MON is scheduled to report earnings prior to open on Thursday.  Expect high volatility in ag and fertilizer stocks in sympathy.

If there are questions or comments, please do post.

Best regards, and happy trading ….

TaurusTrader

http://www.taurustrader.wordpress.com

Stocks to Watch for Friday, March 27, 2009

Thursday’s Recap:  Another great day at the market!  All three major indices finished solidly positive.  Dow ended the day up 175 points to its highest level in six weeks.  Dow has gained nearly 21% since close to hitting a 12-year low on March 9.  Nasdaq has now erased all losses for 2009 and is now back in black.  AMAZING!  Dow, however is still down 9.7% for the year.

Mainly 3 factors contributed to today’s rally. 1) Better than expected earnings and future guidance by retail giant BBY, food processor CAG, and soft drink company DPS – relaying the fact that the consumer spending is still intact, 2) Contrary to yesterday’s disappointing auction, today’s auctioning on long term debt was received with enthusiasm, lifting the fear  about the government’s ability to fund its economic stimulus and financial bailout programs, and 3) shorts got squeezed and forced to cover some of their positions.  Stocks have been aggressively shorted during the market decline  and the short interest had risen 11% by mid March.  Enormous amount of sideline money is slowly venturing to get back in to the buying mode.

Economic data (GDP and unemployment) were not great, but the numbers came within forecast.  Hence, did not have major impact on markets. Tim Geithner appeared very confident and handled questions with ease in his testimony to the house finance committee.  Markets and for that matter the congress, are becoming comfortable with our new treasury secretary.

When the closing bell rang, the Dow had gained 175 or 2.3% for the day and it closed at 7925, its highest close since February 12.   The S&P500 index rose 19 points or 2.3%, to 833, and the Nasdaq rose 58 points or 3.8%, to 1587.  Gold prices also rose modestly.  Oil reached a new high for the year, settling up $1.58 at $54.34 a barrel.

Today’s gains were widespread as all 10 major sectors in the S&P 500 closed the session higher. Contrary to recent form, the gains came without leadership from the financial sector.   The dollar is stabilizing and it rose marginally against other major currencies.  This brings to the comments I made last Thursday, when dollar took a dive after fed announced a trillion dollar infusion to bolster economy.  Here is what I said: 

Is Dollar Worry Over Blown? -  ……. In my opinion, the dollar related reaction to fed decision is a little over done.  US economy is still the strongest economy in the world despite all our problems.  Dollar is still the dominant currency.  People who are squabbling over greenback, should just look back a little.  Just 6 months ago, EUR/USD pair was trading at over 1.60.  Now, when it jumped from 1.30 to 1.35 or so, all hell breaks loose!  ………………………  So, relax folks.  A slight decline in dollar is not the end of the world as the dooms day pundits like Larry Kudlow and his friends on CNBC rant about.  The dollar is already stabilizing against the Euro and Yen as I write this blog around mid night.

That was last Thursday …. Friends, how true that statement turned out to be.  … PATIENCE …. Patience is what we need to navigate this market.  Do your home work and do not be swayed by hype!!

TaurusTrader swing portfolio had a superb day.  MELI was closed out for 13.5% profit in two days.  All positions, except BAC advanced.  TCK. MBT and WNR are very close to hitting their profit target. 

It was not a bad day for day trading.   There were opportunities to trade for 3 to 5% profit with  TNA.  Rest of the picks did not pan out well.  As discussed before, I use 10-min chart to determine entry and exit points.

Picks for Friday, March 27:  President Obama and Treasury Secretary Geithner will be meeting with banking industry CEOs to discuss on banking crisis, bailout money, toxic assets, and regulations, etc.  Any post meeting snippets from participants may have some impact on financial sector stocks.  Friday’s economic data releases include, Personal Income ( Expected: -0.2%), Personal Spending (Expected: +0.3%), and U Mich Sentiment Index (Expected: 57). 

Even though I’m very tempted, I do not want to add any new position to swing portfolio.  The current portfolio of 11 stocks is well diversified, and a few positions are very close to hitting profit target.  So, I’ll wait till next Monday or Tuesday to add new positions.

For day trading, I’ll focus on financial, technology, energy, ag and commodity sectors for trading opportunities.  Some of the specific stocks that I would be following are – FAS, TNA, DUG, MOS, and JOYG.

If there are questions or comments, please do post. 

If you are interested in receiving my posts directly via email, please email me at –  TAURUSTRADER@SBCGLOBAL.NET  or click on the ‘comments’ below to request.  I can do the rest!!

Happy trading ….

TaurusTrader

http://www.taurustrader.wordpress.com

Stocks to Watch for Wednesday, March 25, 2009

Tuesday’s Market Recap:  Profit taking was the game of the day, especially at the open and at the last hour before closing!  This was quite expected after a big market rally on Monday.  Major indices briefly traded positive around mid-day after the testimony by Geithner and Bernanke to House finance committee over AIG issues.  Sellers came out in force toward sessions end pushing Dow down to 7660 or a loss of 116 points (1.5%).  All Dow components, except 3 ended in red.  S&P lost 16.9 points or 2.05% to close at 806, two consecutive days above 800 and also above 50 day MA.   Nasdaq fell 39.25 points or 2.5%, to 1516.

The dollar was mostly higher against other major currencies, while gold prices fell $28.8 or 3% to $923.30.

Oil gained 18 cents to settle at $53.98 a barrel on the New York Mercantile Exchange.

WSM hit its profit target this morning and closed for a nice 19.8% profit (please see my earlier post for details).  All three recommended picks for today, MELI, BAC, and HON, were bought and added to TaurusTrader swing portfolio.  None of the positions got stopped out.   At the end of the day, the portfolio had following open positions – WNR, TCK, AGU, AMR, MBT, FCN, MDR, HNT, RIO, MELI, HON, and BAC.

Among the day trade picks – FAS, BAC, WFC and MS gave great profitable setups.  As discussed in earlier posts, I follow 10-min chart for day trade setups.

Picks for Wednesday, March 25:   I expect the choppy trend to continue throughout the week.  Market movement has become increasingly news driven.  Unless some encouraging news comes out in the next few days, there is a possibility that all the gains made on Monday might disappear!  President Obama in his speech to the nation, in my opinion, spoke well and made a positive case in front of American public  for his policies and budget proposal.   

I made a case for a group of stocks in my blog on March 17.  These stocks are seeing some momentum building.  So, I thought the piece is worth repeating.  This is what I said on March 17 – “There are some positive signs that the economic activities around the word is showing signs of recovery.  I expect companies that make it happen in early stages are expected to benefit immediately, such as copper producers, dry bulk shippers, railway and trucking companies, etc.  Copper price is increasing which generally indicates increase in industrial and construction activities.  Shipping activities involving essential products across globe is picking up.  Further, I also think that Ag seed, chemical, and fertilizer companies will pick up momentum as planting season in North America is about to begin.  These companies will generate more than 60% of their revenues in the next couple of months selling seeds, pesticides, and fertilizers to farmers.  So, I’ll be keeping an eye on the following companies for the next few days” -

• TCK  - Producer of copper and other metals (TCK is up by over 10% since March 17)
• SBLK, DRYS – Dry bulk shippers.  SBLK reported good earnings after the markets closed on Monday. DRYS is again up over 10%.
• ABFS, YRCW, CSX, GBX – Railway and trucking,
•  AGU, SYT, MON, TITN, ADM – Ag seed, chemical,  fertilizer, and equipment companies
• WNR, VLO – oil refiners

TaurusTrader swing portfolio is well diversified and currently has 12 open positions.  I do not want to add any more new position until I close some.

I’ll closely watch the following stocks for day trade opportunities: FAS, BAC, and MS.

If there are questions or comments, please do post.

Regards,

TaurusTrader

http://www.taurustrader.wordpress.com

Stocks to Focus for Tuesday, March 17, 2009

Monday’s Market Recap:  Four days of rally came to an end.  Stocks in some sectors, especially financial and technology, have gone too far too fast.  So, this pause (pull back!) is rather considered a good sign.  The day started great with Dow gaining over 150 points by mid-day with financial sector stocks flying high .  However, the sellers came out in the afternoon session and pushed the financial  and technology stocks down, and so went the major indices, down losing steam. 

Dow and S&P gave up all gains and ended the day almost flat.  It could have been worse.  Hey …. it was the anniversary of the fall of BSC which started all this mess!  Dow closed at 7217 (range 7206 to 7393) losing just 7 points or 0.1%.  S&P also had a similar trend, closing at 754 (range 753 to 774) losing 2.7 points or 0.3%.  Nasdaq shed a bit more, -1.9% or 27.5 points, and closed near day’s low at 1404.  For the day, Nasdaq traded between 1402 and 1445.

TaurusTrader added BX, AMR, and WFC to swing portfolio.  SOHU was stopped out.  Since the stop was raised over the weekend, we came out almost even with a loss of just 0.3%.  In fact, SOHU came within 20 cents short of hitting its target ($50.50) last Thursday.  So was CPRT, which came within 5 cents of target ($30.30) before retracing!  It is not fair …. but, I understand is just a part of vagaries of trading!   DRYS, added to the focus list on March 11, is dropped from the watch list.  It failed to hit buy limit within 3 days after placed on the list.

Among the day trade picks – FAS, BAC, and MS gave great profitable setups.  As discussed in earlier posts, I follow 10-min chart for day trade setups.

Picks for Tuesday, March 17:  It is a “triple winch” week for options.  I expect the choppy trend to continue throughout the week.  Market internals look OK.  It is likely that 741 (November 21 low) on S&P would be defended.  Please watch out …. there appears to be some sector rotation beginning to happen.  Money is moving out favored sectors like financial, technology, precious metals, etc in to less favored sectors, such as ag and fertilizers, air lines, shipping, refiners, etc. 

There are some positive signs that the economic activities around the word is showing signs of recovery.  I expect companies that make it happen in early stages are expected to benefit immediately, such as copper producers, dry bulk shippers, railway and trucking companies, etc.  Copper price is increasing which generally indicates increase in industrial and construction activities.  Shipping activities involving essential products across globe is picking up.  Further, I also think that Ag seed, chemical, and fertilizer companies will pick up momentum as planting season in North America is about to begin.  These companies will generate more than 60% of their revenues in the next couple of months selling seeds, pesticides, and fertilizers to farmers.  So, I’ll be keeping an eye on the following companies for the next few days -

• TCK  - Producer of copper and other metals
• SBLK, DRYS – Dry bulk shippers.  SBLK reported good earnings after the markets closed on Monday.
• ABFS, YRCW, CSX, GBX – Railway and trucking,
•  AGU, SYT, MON, TITN, ADM – Ag seed, chemical,  fertilizer, and equipment companies
• WNR, VLO – oil refiners

Swing trade picks for Tuesday are:

1. WNR – buy above $11.80, Target 13.60, Stop $10.95
2. TCK – buy above $4.41, Target $6.50, Stop $3.75
3. AGU – buy above $37.50, target 41.50, Stop $34.50

I’ll also closely watch the following stocks for day trade opportunities:

FAS, BAC, MS, VLO, MON, SYT, DUG, and SBLK (earnings play).

If there are questions or comments, please do post.

Regards,

TaurusTrader

http://www.taurustrader.wordpress.com

Stocks to Watch for Friday, March 13, 2009

Thursday’s Recap:  WOW!! What a rally … three days in a row !  It did not look that promising at the open, when Dow opened up in the red.  But as the day progressed, major indices steadily picked up steam and ended the day in solid green.  Dow gained 240 points or 3.5% to close at 7170.  S&P gained 29.4 points or 4.1% to close at 750.7  where as, the tech heavy Nasdaq gained 54.5 points or about 4% and closed at 1426.  Crude gained 11.1%  to close at $47.03 lifting energy stocks.  Banking, technology, and energy sectors gained the most.

In the past 3 days, Dow vaulted 622 points or 9.2%, the biggest 3-day jump since late November.  Nasdaq too gained 12% in the same period, which is its biggest 3-day rally since late October.

S&P’s close abobe 741 (November 21 low) is technically noteworthy, as this level might support any pull back in the future.  The next major resistance for S&P is about 790, or the 50-day moving average.

TaurusTrader portfolio also had a impressive day!  In the past 3 days, 5 of our picks (WFC, BIGCC, WDC, MS, and JOYG) hit their profit targets, and all remaining picks have positive unrealized gains.  The WDC position hit its target of $17.10 today for a nice 11.8% profit in little over 2 days!

From yesterday’s watch list, FCN and MDR were bought today.  BX, DRYS, and MBT are still on watch since their entry price are not triggered yet.

As of the end of March 12,  TaurusTrader swing portfolio had following positions:

1.  FCN – filled on March 12 @ $47.80, closed today at $48.19.  Unrealized gain 0.8%.  Target $52.00

2.  MDR – filled on March 12 @ $13.40, closed today at $13.94. Unrealized gain 4.0%.  Target $16.00

3.  CPRT – filled on March 10 @ $27.60, closed today at $29.51 for an unrealized gain of  6.9%.  Target $30.30

4.  WDCDV (WDC April 12.50 call) – filled on March 6 @ <$3.00, today’s close $5.00, gain 67%.  Target $6.00

5.  SOHU – filled on March 10 @ $46.17, closed today at $48.08.  Unrealized gain 4.1%.  Target $50.50

6.  BMC – filled on February 24 @ $29.46, closed today at $29.55.  Unrealized gain 0.3%.  Target $32.00

Among the day trade picks – HP, HPQ, MELI, WFC, JPM, and UYG  provided quick profitable trading opportunities.

Focus list for Friday, March 13:  I would trade carefully tomorrow.  Stocks and major indices have gone up too much too fast.  Some pull back from profit taking may be expected heading in to weekend.  I will be looking to add the following stocks in tomorrow’s trading -

1.  WSM – Buy above $10.10.  Target $12.10.  Stop $8.90

2.  RY – Buy above $27.70.  Target $30.50.  Stop $25.60

Also interested in are stocks that are not filled yet from past 3-day focus list – BX, DRYS, and MBT.

Financial, ag and fertilizer, mining, and technology sector stocks will be watched for day trade opportunities, and those stocks include:

FAS, BAC, AGU, IPI, RIO, JOYG, HPQ, SY and CTRP.

If there are questions or comments, please do post. 

If you are interested in receiving my posts directly via email, please let me know.  I can do it!!

Happy trading ….

TaurusTrader

http://www.taurustrader.wordpress.com

Stocks to Watch for Thursday, March 12, 2009

Wednesday’s Recap:  A gain is a gain however small it is.  In a rather choppy trading, major indices eked out small gains to close in positive territory two days in a row in over a month!   Dow closed up 4 points, S&P gained 1.7 points, and Nasdaq fared slightly better gaining 13.4 points.  Dow failed to clear 7000, ending at 6930, S&P closed at 721.4, and Nasdaq stood at 1371.6 by the end of the day.  The financial and technology sectors held up OK, while the energy sector gave up as crude dropped 7.4%.

TaurusTrader again had a great day!  MS gapped up at open, way surpassing our target exit price.  I closed MS position immediately after open at $22.68 for a profit of 20.1% in less than 24 hours.  BIG received an upgrade this morning, and our April 15 call (BIGCC) hit our target of $5.10, for a net gain of 70%  in 4 trading sessions.  I suggested buying BIGCC on Friday the 6th, for less than $3.00. 

Our picks for today, DRYS and MBT did not hit the entry limit, hence were not bought.

As of the end of March 11,  TaurusTrader swing portfolio had following positions:

1.  CPRT – filled on March 10 @ $27.60, closed today at $28.19 for an unrealized gain of  2.1%.  Target $30.30

2.  WDCDV (WDC April 12.50 call) – filled on March 6 @ <3.00, today’s close $4.30, gain 43%.  Target $6.00

3.  WDC – filled on March 10 @ $15.30, closed today at $16.57.  Unrealized gain 8.4%.  Target $17.10

4.  SOHU – filled on March 10 @ $46.17, closed today at $49.06.  Unrealized gain 6.3%.  Target $50.50

5.  BMC – filled on February 24 @ 29.46, closed today at $28.53.  Unrealized gain -3.2%.  Target 32.00

In the past few days, we closed out MS (twice), C, SWHC, JOYG, BIGCC, WFC, and MELI for some hefty gains.  At the same time we also took some losses from UYG, PALM, PBR and ATHR after being stopped out (Please refer to my earlier blog posts).

Focus list for Thursday, March 12:  Next couple of days will be pivotal that might determine the direction of the markets for the short run.  Number of market influencing events will be taking place – 1) Traders will be watching the congressional debate tomorrow on mark to market accounting practice, 2) Treasury secretary Tim Geithnerwill be testifying before senate budget committee tomorrow, 3) advance retail sales for February are due tomorrow, along with January business inventories, and weekly jobless claims data, and 4) G-20 meeting on financial crisis and to devise coordinated efforts to mitigate the crisis.

I’ll be watching the following stocks to add to TaurusTrader swing portfolio:

1.  FCN – buy above $47.80, Target $52.00, Stop $45.15

2. MDR – buy above $13.40, Target $16.00, Stop $11.50

3.  BX – Buy above 6.31, Target $7.50, Stop $5.40

Energy stocks might see some volatility heading in to OPEC meeting over the weekend.  Technology stocks are expected to gain more on advances already made.  Banking stocks might fluctuate widely during and after the mark to market congressional hearing.  Ag and fertilizer stocks are on tear, and I expect it to continue.  So, I’ll be concentrating on following stocks for quick day trade and swing trade opportunities:

HP, HPQ, MELI, WFC, JPM, UYG, MON, AGU, and IPI.

If there are questions or comments, please do post …

Happy trading ….

TaurusTrader

http://www.taurustrader.wordpress,com

Stocks to Watch for Wednesday, March 11, 2009

Tuesday’s Recap:  What a reversal of fortune!!  If we can string up a few more days like this …. I sure can dream of retiring!  It was a “hard to lose” day.  Pick any stock, it probably closed up.  If any one did not have a winner today, they need to check their stock picking skills … I’m serious!!

The markets were due for a bounce after such a prolonged over sold condition.  The time was ripe for some good news that the bulls could pounce upon!  It came from the City CEO Vikram Pandit before the markets opened.  He gave some rosy picture for City.  Who cares for the details!!  It was good enough for the banking stocks to rally!  Then came more news.  Congressman Barney Frank announced that SEC may consider bringing back the up-tick rule as early as next month.  Also, in the background, many traders were weighing on congressional committee meeting later this week to support temporarily relaxing the mark to market accounting rule for banks.  Race for short covering started in earnest providing more fuel to the rally as the day progressed.  This is the kind of day the TaurusTrader has been patiently waiting and ready for (please read my earlier blog, Week Ahead, March 9-13, 2009).

All three major indices saw substantial gains.  Dow ended up by 379 points (5.8%) to close at 6929, and Nasdaq fared even better picking up 90 points (7.1%) to close at 1358.3.  S&P rose by 43 points or 6.4% and closed at 719.6.  It was probably more than a short covering or dead cat bounce rally.  There was some indication of conviction buying.  The volume on NYSE was over 2 billion, which was higher than recent average volume.  Gains were wide spread across sectors.  Over 97% of S&P members advanced, and all 30 Dow components ended in green.  So, there could be more leg to this rally!

TaurusTrader had a great day with both swing and day trade picks.  WFC and JOYG hit their profit targets within 24 hours for 29.2 and 8.3% profit, respectively.  Four stocks triggered their ‘buy limit’, hence were added to the portfolio today.  They were - CPRT (added at $27.60), WDC ($15.30),  SOHU ($46.17), and MS ($19.70).  MR was dropped after being on the ’buy’ list for 3 days without hitting the entry price.    Current swing portfolio holds 5 stocks,  BMC, CPRT, WDC, SOHU, and MS, along with two options, WDCDV (WDC April 12.50 call) and BIGCC (BIG April 15 call).

Our day trade picks for Tuesday also had a phenomenal day.  The financial picks – BAC (up 37.6%), WFC (up 23%), and UYG (up 28.5%), and Ag sector picks, MON (up 6.5%), AGU (up 8%) and IPI (up 9.6%) provided ample day trade opportunities. 

Picks for Wednesday, March 11, 2009:  I would keep a close eye on banking stocks, specifically – BAC, WFC, and MS.  They were already gaining from where they left off at close, in the after market hours.  Wednesday may see some more substantial gains for these stocks.  Energy, shipping, technology, mining, and ag sector stocks are also of interest.  I would focus on HP, DSX, MELI, IPI, AGU, and JOYG for any day trading opportunities.

Also, I would like to add the following stocks to TaurusTrader swing portfolio:

1.  DRYS – Buy above $4.65, Target $6.50, Stop $3.95

2. MBT – Buy above $28.35, Target $33.10, Stop $24.30

Good luck trading ….

TaurusTrader

http://www.taurustrader.wordpress.com

Good Riddance, February …. March on to March.

February was a disaster for markets to put it bluntly. Despite some resiliency at times, any hope for a rebound was dashed in the last week. It was the worst February since 1933. Major averages dropped through a series of long term lows. For the month, S&P lost 10.9% to close at 735.09, and Dow lost 11.7% to close at 7062.9. Dow has fallen steadily (- 38%) for 6 months in a row. However, Nasdaq is still holding the November 21,2008 low of 1295.5, and it closed at 1377.84. For the first two months of this year, Dow is down by 19.5%, S&P by 18.6%. Nasdaq is a little better, but still down by 12%.

It was a bad Friday, the last day of trading in February. Bad news came from all directions. Before the open, news came out that Uncle Sam would own 36% of City (C) effectively diluting current share holder value to just 26% of the company. Then came the worst GDP data (-6.2%) since 1982, indicating a deeper contraction in the economy than originally announced. And, on top later in the day, GE announced that it would slash dividend to 10 cents from 31 cents in order to preserve about 9 billion in capital and to maintain AAA credit rating. This action is the first for GE which had maintained or increased its dividend for 32 consecutive years. This spooked the market even further. 36 companies in S&P have cut their dividends in the past 6 months. Many more are likely to follow in the next few months as companies are trying whatever they can to preserve capital and survive this economic down turn.

Let the “March Madness” begin …. I believe that ‘volatility’ will be again the name of the game. There is still a lot of uncertainty about the direction of the market. Markets are in extremely oversold condition and want to bounce up with any whiff of good news. But, any good news is hard to come by. The political rhetoric in DC is not helping out a bit. It looks like ‘traders’ have revolted against the proposed policies of President Obama’s administration. Market is worried about the sweeping unprecedented changes proposed in health care, education and energy policies. Questions about the health of nation’s biggest financial institutions are still murky despite the government action with City (C) last week. Worries about toxic assets on their balance sheet still plague the markets. Many market pundits are predicting another leg down as a path of least resistance.

March will begin with a flood of economic data in the first week. Expect significant volatility and wide swings within a short period of time as the markets try to digest numbers. Some important economic data scheduled for release during the week are -

Source: http://bloomberg/markets/ecalendar/index.html

Monday - Personal income; ISM manufacturing index; Construction spending
Tuesday - Motor vehicle sales; pending home sales
Wednesday - ADP employment; ISM non-manufacturing; Beige book; crude inventory
Thursday - chain store sales; jobless claims; productivity and costs; factory orders;
Friday - Unemployment and non-farm pay roll; consumer credit.

Apart from these, also watch for Fed chief Ben Bernanke, who is scheduled to appear before senate budget committee on Tuesday morning.

On Earnings front, about 240 companies, including 8 members of S&P are scheduled to report.  

Source: http://www.zacks.com/commentary/10168/Earnings+Preview+for+Mar+2+-+6.

I would be keeping an eye on the following companies -

Monday - ABM, DISH, EGLE, SATS, MDR, POM, SWHC,
Tuesday - AZO, ARD, SSW,
Wednesday - BJ, COST, URS, MATK, MR, PETM, AUY
Thursday - CIEN, CNQ, COO, URBN, WNR, EBS, FTEK, IPI,
Friday - HRB

TaurusTrader portfolio recap - We were very conservative in our picks, as well as in our stops and profit targets. Despite the market downturn, our portfolio had a decent week. As I said before, who cares what the overall market does … we don’t. What we care is how our ‘picks’ do!! Please check my blog entry on February 24 – Is this the bottom … I don’t care, so shouldn’t you. We pick the ‘right’ stock to trade using our research and best judgement. So, because of this philosophy within a short period of time (1 to 4 days), we booked tidy profits with our ‘swing’ picks – C (av. 30%), SWHC (30.7%), MS (11.7%) and MELI (11.3%). We were stopped out of DRI (-8.1%)and ATHN (-6.2%).  We still hold UYG, CMG, PBR, and BMC, which are either up or down by 1 to 3% for the week. ADM and SVR failed to hit our target entry price, hence were not filled.

The day trade picks suggested throughout the week (BAC, UYG, WFC, MS, IPI, SYT, SU, HP, MON, HPQ) provided excellent intraday volatility to pocket any where from 2 to 13% within a day depending on ones entry and closing targets. However, two picks – WDC and AGU did not turn out well.

Picks for Monday, March 2: I’ll be on a ‘holding’ pattern. I’ll monitor my longs carefully, and follow with predetermined stops. On my day trade picks, I will be conservative and at the same time very nimble. In might even liquidate profitable positions even before they hit my profit target if the markets start to turn against me. I’ll protect my profit. If I liked a stock so much, there will be chances to reenter at a later time. If not, there are always other equities with a greater probability for a favorable outcome.

Following equities are on my watch list for Monday, March 2:

Drop ADM from ‘add’ list per my rule. It did not hit the “entry limit” of $28.50 within being on the list for 3 days.

ORBC – Buy above 2.07, stop 1.69, target 2.50 (very volatile, reports on 3/16/2009).
SWHC – will be releasing earnings on 3/2/2009. Would re-enter on a good earnings report.

Retail sector will be in focus next week. RTH had a good day on Friday. Same store data is due on 3/5/2009. I expect, some members of this group to gain some more momentum heading in to the data release. I’ll be watching ARO and BKE. These the two teen retailers have consistently reported good same store sale numbers in the past. I’ll also watch for movements in BIG and FDO, which are looking good technically.

As in last week, Ag and energy sector stocks will be the focus for day trade opportunities. The equities include – MON, AGU, SYT, MOS, IPI, SU, and HP. I would closely follow the crude price when I’m trading these stocks. They tend to move in tandem with crude, especially the ETF’s DIG or USO on intraday basis.

MELI hit our profit target of $16.80 on Friday. The stock is still riding on its earnings momentum. I may consider re-entering MELI above $17.15, to a profit target of 19.25.

As usual, if there are questions, please do post …. Let us help each other profit from good trading ideas!

Please watch out for volatility ….

Wish you a very pleasant and profitable day

Regards,

TaurusTrader

http://www.taurustrader.worlpress.com

Stocks to Focus for Thursday, 02-26-2009

Wednesday’s Recap - Markets opened in the negative territory, and deteriorated rapidly following a dismal housing data.  There was also a renewed fear about ‘stress testing’ banks.  However, today’s testimony by Ben Bernanke to house finance committee held the market slide under check.  Mr. Bernanke looked very calm and confidant.   Two things became clear to me from his 2-day testimonies. First, he is against nationalizing banks.  Secondly, he is completely supportive of President Obama’s stimulus and capital assistance program to bolster banks and economy.  Then in the afternoon, CEO of Bank of America, Ken Lewes came out and said that his bank would pass the ‘stress test’ and BAC would exceed 100 billion in revenue in 2009.  Soon, the financials started turning around, and pulled Dow, Nasdaq, and S&P in to positive territory.  However, the rally was short lived and all three indexes ended in red by a little over 1% in the end.  President Obama’s appearance toward the end of the day did not help.  Market is still very starved for information.

Among our picks, we were able to close C and MS positions for healthy profits.  We added PBR and MELI – both had a decent day.  UYG is still up by around 10% from our entry.  Rest of the picks – DRI, CMG, ATHN, and BMC fluctuated between positive and negative territories, and ended the day almost flat.  We were unable to fill SVR and ADM as they failed to hit our ‘entry limit’.

Picks for Thursday, February 26:  I do not have any picks for tomorrow.  The market condition is somewhat fluid.  However, I would still be keeping an eye on my favorite financials – BAC, WFC, and MS to day trade or to swing trade.  I will also keep an eye on energy, technology and ag sector stocks.  In energy I will be specifically looking at HP.  In technology, my focus would be on HPQ and WDC.  DELL will be releasing its earnings tomorrow, hence, watch out for ‘sympathy’ response in rest of technology stocks.

Ag sector stocks are ripe for a good rebound.  Planting season in North America is about to begin.  Companies involved in selling seed, pesticides, and fertilizers to farmers will see their sales start go up rapidly during this time of the year.   There is also some consolidation going on in this sector (eg – AGU and CF, CF and TRA).  Many stocks have come off substantially in the past couple of days unfairly in response to fear on cuts in  farm subsidies by Obama administration.  The companies I’m interested in are MON, AGU, SYT, and IPI. 

Currently, the TaurusTrader portfolio hold – UYG, DRI, CMG, ATHN, PBR, BMC and MELI.

If there are questions, please do post.  Let us help each other navigate this market and make money!

Good trading ….

TaurusTrader

http://www.taurustrader.wordpress.com