Stocks to Watch for Wednesday – April 15, 2009

Tuesday’s Market Recap:  Markets pulled back responding to unexpected poor retail sales data and also on worries about banks ahead of key earning reports.  Markets were in extremely overbought condition, and in my opinion, this pull back was needed. 

For the day, Dow lost 138 points or 1.7%, to close at 7920. The S&P 500 lost 17 points or 2%, to 841, while the Nasdaq shed 28 points or 1.7%, to 1626.   Crude fell 64 cents to settle at $49.41 a barrel, and gold lost $3.80 to $892 an ounce.

Financials led the stock market lower on Tuesday as investors brushed off an upbeat earnings by GS and focused on disappointing economic data.  Retail sales for March came in at -1.1%, far below the expected, a 0.3-percent increase.  Excluding the autos, sales fell 0.9%.  January and February sales figures were, however,  revised upward.  Still, the unexpected sharp drop spooked the market.  Meanwhile, the PPI dropped 1.2%.  Excluding food and energy costs, core PPI was flat.  Business inventories dropped 1.3% in February as expected.

A spirited speech by President Obama explaining the origin and nature of the economic crisis, and an all out effort by the administration to grow the economy – could not inspire the markets.  Similarly, Ben Bernake’s speech was also ignored despite his observation that “the economic decline is slowing down off late”

TaurusTrader portfolio closed a position for profit and added a new position.  CMED hit the profit target of $18.60 in the morning for a 12.9% profit.  AGU and AMR came very close to hitting target before retreating. Very volatile  TNA lost about 10% for the day.  Today’s pick, GNK was bought at $15.67.  The other pick, FAS did not activate the buy limit, hence was not bought.

Focus list for Wednesday:  Earnings and economic data will be the center of focus again on Wednesday.  INTC reported earnings of 11 cents a share after the close on Tuesday.  This beat the street expectation handily, but the shares were down in after-hours trading as the chip giant refused to provide an outlook.  The rail-road giant, CSX was up over 3% in the after hours trading following it’s better than expected earnings report.

On the economic front, the scheduled events for Wednesday include:  Weekly mortgage applications; NY Fed Empire State survey; CPI; industrial production; weekly crude inventories; NAHB housing index; Fed’s beige book.

Markets are still in a flux …. It is hard to predict the short term direction.  TaurusTrader portfolio has 12 open positions, and is well diversified.  I’ll be watching my positions with tight stops.  I do not want to risk more capital on new positions.  I’ll be happy to watch from the side lines, at least for now on Wednesday.

If there are questions, please do post ….

Happy trading …

TaurusTrader
http://www.taurustrader.wordpress.com

Stocks to Watch for Thursday – April 09, 2009

Wednesday’s Market Recap: Earnings season earnestly began on a jittery note, but major indices somehow managed to have a first positive close for the week. With the disappointing earning report from AA already out, the day began with a pair of good news. First, a  WSJ report that the insurance companies might be able to tap in to TARP funds. Second, a $1.3 billion merger deal between two home building giants – PHM and CTX. SEC regulators met and put out proposals to restrict short selling for public comments. Markets greeted these news with some enthusiasm – technology, retail, and insurance stocks saw good buying interest. However, the release on recent FOMC meeting minutes in the afternoon session put a damper on the markets. The members saw escalating economic and unemployment risks through 2009 and 2010. This spooked the investors, and the sellers threatened to drag stocks lower for the third straight session. But, in the last hour of trading, buyers showed resolve and pushed all three of the major indices higher in to positive territory.

The Dow rose 47.5 points or 0.6%, to 7837, the S&P 500 rose 9.6, or 1.2%, to 825.2, and the Nasdaq gained 29.1 points or 1.9%, to 1,590.7. S&P found support around 814 for two consecutive days. Crude fell 23 cents to settle at $49.38 a barrel, and gold gained $2.60 to $885.90 an ounce.

TaurusTrader portfolio had a mixed day. OMTR was downgraded two days in a row, and was stopped out. The irony is that it was also upgraded to “buy” from RBC capital yesterday. Rest of the positions did OK. Ten of the remaining 11 picks have positive unrealized gains. Not bad!

Stocks to Focus for Thursday, April 09: Thursday will be the last trading day of the week. Markets are closed on Friday for Good Friday observance. Retailers will be in focus again tomorrow. Same stores data will be out in the morning. BBBY, JOSB, FDO, and other retailers had a fantastic Wednesday, and the sector is likely to continue with the momentum. Weekly jobless claim data could have some influence too.

I do not have any specific recommendations for Thursday. However, depending on the same stores data, I  might consider buying:

1. XRT – buy above $24.28, stop $22.40, target $26.78

Expect volatility as we are heading in to a long weekend.  Please trade carefully, and always trade with protective stops.

If there are questions or comments, please do post …

Have a great extended weekend,

TaurusTrader

http://www.taurustrader.wordpress.com

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

Stocks to Watch for Friday April 3, 2009

Thursday’s market recap: Another great day!  Even though it could not hold on to it  at close,  Dow breached 8000 mark for the first time since Febrauary 9.  Nasdaq is now positive for the year!  S&P somehow managed to hold above the critical 833 support level.

The Dow gained 216 or 2.8%, to close at 7978.  It had earlier gained as much as 314 points.  The S&P index gained 23 points or 2.9%, to end the day at 834. The Nasdaq rose 51 points or 3.3%  to close at 1603.

Crude rose $4.25 to settle at $52.64 a barrel, while gold fell $18.80 to $908.90 an ounce.

Traders were in buying mood.   Markets opened up nicely in the morning despite some negative data on jobless claims.  There were again small doses of good data that helped.  Banking sector had a some relief with FASB’s decision to relax mark to market rule on toxic assets.  Markets also liked the news coming out of G-20 meeting in London of heads of states.  G-20 leaders decided to fund IMF over $1 trillion to help troubled nations around the world, and also agreed to formulate stricter global regulation of financial institutions.  ECB lowered interest rate by 0.25%, to bring the rate down to 1.25%.  Factory orders posted a larger increase in February.  This news came on the heels of yesterday’s better than expected data on pending home sales, manufacturing activity and auto sales.

TaurusTrader’s swing portfolio had a nice day.  All 4 of yesterday’s picks – EXP, WDC, HSP, and TNA, were bought, and had decent  gains.

Focus list for Friday, April 3: There are signs to support that this rally may have more ‘juice’ left in the tank to run.  As I said in my earlier posts, small doses of good news have started coming in indicating that this recession has started to recede.  Benefits from innovative plans, at least some, put forth by the new administration appear to slowly seeping in to the economy.   CNBC’s Bob Pisani observed that mutual funds are getting back to the market to scoop up stocks.   Commodity prices are going up.  Copper just made a new 5-month high.  Copper is a good indicator of economic growth.  Similarly the transportation index, which went on a tear today!   I also expect that the Banking stocks to continue their momentum following the boost they got from Thursday’s favorable mark to market ruling by FASB.  RIMM reported exceptional quarter after Thursday’s close, and was up over 20% in aftermarket hours.  Folks, these are some good signs ….

However, we can’t let our guard down.   The optimism could be easily crushed if tomorrow’s jobs report surprise us with lousier than lousy expected data.  Economists predict  a loss of 654 K jobs in March, and unemployment rate  to rise to 8.5%,  from 8.1%  in February.

TaurusTrader swing portfolio picks for tomorrow, Friday April 3 are:

1. FMX – Buy above $27.08, stop at $24.90, target $30.60
2. BCE – Buy above $21.77, stop at $19.90, target $24.50
3. WFC – Buy above $16.26, stop at $14.90, target $19.00

There are no day trade picks for Friday.

Please follow all trades with protective stops. The markets  may be kind to you,  but  it can turn against you any time unexpectedly!

Good luck trading.

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 Focus for Tuesday, March 31, 2009

Monday’s market Recap: A down day as predicted, but did not expect that it would be so miserable.  All three major indices lost about 3% for the day.  It could have been worse if not for a little rally in the last hour before close!

Dow tumbled 254 points for the day or 3.3%  and closed at 7522.  The S&P fell 28 points or 3.5%, to 788, while the Nasdaq lost 43 points or 2.8%,  to 1,502.  The decline was wide spread.  All 10 sectors and 90% of S&P components ended in red.  Crude lost nearly $4.00 (7.6%) to close at 48.41, and even gold fell by $7.60, to $917.30 an oz.  The dollar however,  gained against most foreign currencies.

Markets were in oversold condition, and needed some excuse to sell off.  An announcement by Obama administration to let GM and Chrysler to go bust, and presumably, Tim Geithmer’s assessment over the weekend that banks may need more federal injection of funds, provided just the pretense to sell off.  In my opinion, nothing had changed from last week to this week with auto makers and the bankers.  This pull back was some what prudent considering that the markets had such historic gains within a short period.  Despite the two-day drop, the Dow is still up 975 points or 14.9%, from its low of 6547 on March 9, when it ended at its worst level since April 1997. The S&P 500 index is also still up 16.4%  from its low.

In TaurusTrader swing portfolio, some positions were stopped out.  We were prepared for this pull back, hence the stops were raised for some volatile positions after the big market run up. Stops were hit with BAC (-12.6%), RIO (-4.9), HNT (-7.3%), MDR (+1.2%), and MBT (+3.9%).  If you remember we had  12 straight winners before this! We won MORE, and lost a FEW … However, above all, we knew exactly how much we would lose, if we lost, and how much we would win, if we won!.  That’s “peace of mind” trading, which comes from discipline and adherence to a set of trading rules.

At the end of the day, TaurusTrader portfolio was left with positions in – FCN, AMR, WNR, AGU, and HON.

I did not day trade.  None of the day trade picks from yesterday worked out for day trading!

Picks for Tuesday, March 31: No major market moving economic events are scheduled, so expect for more volatility and choppiness in the market. Traders will be positioning for jobs and unemployment data to be released later in the week as well as for the official beginning of the 1st quarter earnings season beginning next week.  It is also the last day of the quarter, and some funds might even try to push price of some stocks higher to make their portfolio look good for customers!

Even though I’m very tempted, I do not want to add any new position to swing portfolio.  I’ll wait for another day or two before adding long positions.  Congressional Hearing on Thursday on Mark to market will have significant impact on the markets in general and financial stocks in particular.

For day trading, I’ll reluctantly focus on – FAS or FAZ, DUG or DIG, DGP or DZZ, and  TNA.

If there are questions or comments, please do post.

Happy trading ….

TaurusTrader

http://www.taurustrader.wordpress.com

http://www.headhurts.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

The Week Ahead, March 16 – 20, 2009.

Weekly Recap (March 9 – 13, 2009):  TaurusTrader’s prophecy to begin the week, “ ….  expect some bounce up for the markets this week ……. planning on exploiting any  ‘bounce ups’ as and when they happen …..”, did indeed come true.  It was not pretty to begin with on Monday, but Gosh, things changed in a hurry … when the rally started, it did not waste any time …. it just took off.  All major indices had substantial gains not seen in a while.  It was the kind of rally, no matter what you call – a bear market rally, reversal rally, short cover rally, Obama rally, anti-Obama rally, Bank CEOs rally, Stewart-Cramer rally, etc etc etc, that the TaurusTrader was waiting patiently, totally planned with right picks, and pounced on for profits! Please refer to my blog posts through out the week for details.  I hope you did well too.

For the week, Dow traded in 800 point range (6440 to 7243) to close at 7224 and gained an impressive 597 points or 9%.  S&P gained 10.7% or 73 points to close at 756.6 (range 673 to 758), a close above November 21 low of 741.  The tech heavy Nasdaq market gained 10.6% or 138 points for the week  closing at 1432 (range 1266 to 1434).

Major worries about the stability and viability of major banks were somewhat abated by upbeat statements by CEO’s Vikram Pandit of City, Jamie Dimon of JPM, and Ken Lewes of BAC – all indicated that their banks are lending and making profits!  Even though, the GE credit was downgraded by a notch to AA+, it did not hurt as the market was expecting even worse.  So, GE gained, instead of losing ground!  More importantly, the Obama administration has started talking ‘coherently’ and in unison about their plans for rescuing financial institutions and fixing economy.  Congressional hearing about modifications in mark to market accounting practice to deal with toxic assets on balance sheet of financial institutions, and SEC’s inclination to bring back the ‘uptick’ rule for shorting stocks, also added fuel to the rally. 

TaurusTrader’s swing portfolio had a fantastic week.  Five positions hit their profit targets within a short holding period of 1 to 5 days. 

1. WFC bought on Marck 9, sold on March 10 for 29.2% gain
2. BIGCC (BIG April 15 call), bought on March 6, sold on March 11 for 70% gain
3. WDC, bought on March 10, sold on March 12 for 11.8% gain
4. MS bought on March 10, sold on March 11 for 20.1% gain
5. JOYG bought on March 10, and sold on March 11 for 8.3% gain

None of the positions stopped out this week.

Because of wide intra-day price swings, we had several reccurring  profitable day trade opportunities throughout the week with our day trade picks – MON, AGU, IPI, SYT, BAC, WFC, MS, HP, HPQ,  FAS and MELI.  I had mentioned several of those trades in my daily posts.

Week Ahead, March 16 – 20:  Please do not kid yourself.  No matter what you hear from experts on CNBC, we are still in a historic bear market.  Negativism still exists, and is likely to persist for a while about the health of our economy, viability of financial institutions, political squabbling, etc.  Even in bear market, we get some burst of enthusiasm and positive uptrend periodically, like the one we got last week.  It usually is very fast and very violent!  Now you see it, you feel it, but the very next moment it is gone heading in the other direction … even faster!!  So, as I said before, be patient and be prepared to exploit those kind of movements as and when they happen.

I expect the markets to swing widely based on ‘instant news’.  There’s a lot of scheduled events that could move the markets in a blink.  It would be interesting to see how the markets would react to the ‘weekend news events’  - Ben Bernanke’s appearance on 60 minutes, OPEC’s decision to hold the oil out put steady, meeting of G-20 finance ministers, and contradictory statements made by Obama’s honchos on the health of economy at their news media circus acts!  

I liked Ben Bernanke on 60 minutes.  Thought he was forthright and heading in the right direction.  He was emphatic in asserting that the recession could end in 2009, and no big banks would fail under his watch.  Of course, there were caveats - the ‘political will’, mostly the lack of it and how soon the finanacial system can be stabilized.  In all, no harm done with this highly anticipated event!

Tim Geithnet did OK at the G-20 meeting …. No harm done here either!

OPEC’s decision to not to cut production came as a surprise that might affect energy stocks at the open on Monday.  As I write this, the crude was down by over 4% in Asian session.

Financial stocks might continue with their momentum from last week.  A few hours ago, the CEO of HSBC announced that his bank would not ask for British government bailout.  Banking stocks in Asia were responding positively to this news, as well as to the news from G-20 meeting of coordinated efforts to stem world financial crisis.

Economic calendar is busy for the week including some important releases -

• Monday – Empire State Mfg Survey (consensus – 32.00); Industrial Production (consensus, -1.2% month to month); Bernanke speaks.
• Tuesday – Housing Starts (consensus 450 K); Producers Price Index (PPI); FOMC meeting begins
• Wednesday – Consumers Price Index (CPI); EIA petroleum stats; FOMC meeting announcement
• Thursday – Jobless claims (654K); Leading Indicators (-0.6%); Philly Fed Survey (-38.0)
• Friday – Fed Chairman Ben Bernanke speaks

For complete economic calendar for the week, please visit:

http://online.barrons.com/public/page/barrons_econoday.html

On the earnings front, 93 companies are scheduled to confess their quarterly earnings this week.  For complete list, please visit:

http://www.zacks.com/commentary/10310/Earnings+Preview+for+Mar+16+-+20

Some anticipated confessions are -

• Monday – SINA, SBLK
• Tuesday – ADBE, CSIQ, GES
• Wednesday – CLC, DRI, NKE, ORCL
• Thursday – BKS, PLCE, CRAI, FDX, WGO

At the beginning of the week, TaurusTrader’s swing portfolio contained following positions:

1. RY- filled on March 13 @ $27.70, Friday’s close @ 27.65.  Unrealized gain -0.1%.  Target 30.50.  Stop $25.60.
2. MBT – filled on March 13 @ $28.35, Friday’s close @ 28.40.  Unrealized gain 0.1%.  Target 33.10.  Stop $24.30.
3. FCN – filled on March 12 @ $47.80, Friday’s close $47.63.  Unrealized gain -0.2%.  Target $52.00.  Stop $45.15
4. MDR – filled on March 12 @ $13.40, Friday’s close $13.98. Unrealized gain 4.1%.  Target $16.00.  Stop raised to $12.90
5. CPRT – filled on March 10 @ $27.60, Friday’s close $29.43. Unrealized gain of  6.7%.  Target $30.30.  Stop raised to $27.50
6. WDCDV (WDC April 12.50 call) – filled on March 6 @ <$3.00, today’s close $4.90, gain 63%.  Target $6.00.  Stop raised to $4.00
7. SOHU – filled on March 10 @ $46.17, Friday’s close $48.66.  Unrealized gain 5.1%.  Target $50.50.  Stop raised to $46.00
8.  BMC – filled on February 24 @ $29.46, Friday’s close $29.74.  Unrealized gain 1.0%.  Target $32.00.  Stop $27.49

I’ve raised the ‘stop loss’ for WDCDV, SOHU, CPRT, and MDU to protect profits and/or to reduce losses.

Picks for Monday, March 16:  Based on the news events over the weekend discussed above, I will be watching financial and transportation sector stocks on Monday.  I will also be watching the earnings release from SINA, and for possible price action to the report.  The stocks for swing trading are -

• WFC – buy above $14.10.  Target $16.20.  Stop 11.30 (Risky and very volatile, adjust your stop to your risk tolerance)
• AMR – buy above $3.70.  Target $4.85 (50%), and $6.20 (50%).  Stop 2.80 (you could also consider DAL or CAL)

I’ll be looking at the following for day trade opportunities:  FAS, BAC, MS, ITRI, MELI, ITRI and SINA (on earnings!).  Their chart patterns and volatility look interesting!

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

Have a great week and happy trading.

TaurusTrader

http://www.taurustrader.wordpress.com

Stocks to Focus for Tuesday, 03-03-2009

Monday’s recap:  First day of trading in March began on a wrong foot.  Major averages ended in deep red for four straight days.  Navigating this market is like  ‘chinese water torture’.  You know you are going to survive, but never know when the suffering ends …. you wait, wait, and wait in agony! 

Monday’s losses were very steep and wide spread.   All 30 Dow stocks declined, over 98% of S&P components ended in red, so did all 10 groups of S&P .  There were no places to run, and hardly any place to hide.   Dow shed about 300 points (4.2%) to close at  6763, and Nasdaq lost a hefty 55 points (4%) to close at  1323.  S&P took a haircut by 35 points (4.7 %) and closed at 700.89, a level not seen since October, 1998.  Crude lost 11.6% to end at 40.15 dragging the energy sector down by 6.4%.  Financials (6.8%), materials (6.9%), and industrials (6.4%) also saw deep losses.  Even gold, considered a safe bet,  fell 0.3% finishing at $940 an ounce. 

The largest corporate loss in US history in a quarter of over $60 billion by AIG spooked the market and intensified the fear about the health of financials, again.   Basically, AIG lost over half a million dollars a minute during the 4th quarter.  Unbelievable!!! Uncle Sam decided to inject another $30 billion in to AIG hoping to stem the bleeding.  There was also bad news from across the pond with another banking giant HSBC reporting lower profits, and announcing drastic measures to bolster its books.  These followed the news late last week of Uncle Sam’s decision to own 36% of Citigroup and drastically diluting the City common shares.  Bad news after bad news is hitting  nation’s biggest  financial institutions real hard.

Monday’s economic data failed to inspire investor sentiment.  January personal income and spending were better than expected. The February ISM Manufacturing Index was also a couple of points better than expected and came in at 35.8, up slightly from 35.6 in January. Even though the  reading remained below 50, there’s a slight indication that the rate of contraction has slowed. 

Regarding TaurusTrader portfolio, we got stopped out of UYG (-12%), and CMG (-6.5%).  As of Monday, the portfolio holds PBR and BMC.  We came close to adding ORBC, but were not able to add any new stocks today. 

Stocks to focus for Tuesday, March 3:  The market is broiled with extreme pessimism.  Even, Warren Buffet expressed pessimism for markets through 2009 in the newsletter sent to his share holders.  Traders will be watching the all important S&P at 700.  If S&P breaches this all important round number, there’s no support in sight till the next round number at 600.  Traders will also be watching the release of January pending home sales data tomorrow morning. Fed Chairman Bernanke will testify on the U.S. economy and budget before the Senate Budget Committee tomorrow.  Also, the Treasury Secretary Geithner is coming out of hiding to testify before the House Ways and Means Committee on the federal budget.  I hope that these two will provide some “ray of hope” for the markets to latch on.  I’ll be keeping my fingers crossed! 

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

1.  PALM – enter above $7.70, stop at 7.00, target $9.25

2.  THRX – enter above 14.48, stop at $13.60, target $16.65

Bear market rally is possible at any time with a whiff of any good news.  During and after testimonies by Ben Bernanke and Tim Geithner, the financials may take wide swings and provide some opportunity for profitable day trading.  I would prefer WFC, BAC, and MS.

I’ll also focus on some retail stocks – ARO, BKE, FDO, and BIG, heading in to same store data to be released later this week.

Please do post if you have comments or questions ….

Have a great day!

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