Tuesday’s recap -What one single person can do to the market confidence? Quite a bit indeed. It was Helicopter Ben’s 4-hour long testimony on monitory policies to senate finance committee that brought some excitement and positive sentiment back in to the market, at least for a day! Gosh … it was sorely needed. I believe this excitement should continue for few more days. President Obama’s address to joint congressional members should also help calm the jittery market as more details on economic stimulus and banking sector stability plans start emerging. I listened to the President’s speech. I liked the rare upbeat tone of our president.
Almost all sectors ended the day in positive territory, with the exception of Gold and Gold stocks. Dow picked up almost every point it lost on Monday to close at 7350.94 (+3.32%). Nasdaq went up by 3.9% to close at 1441.83, and S&P jumped 4.1% to 773.14. Even though the overall trend is still bearish, it was definitely a good day for bulls.
Our picks had a nice day too. We achieved our targets with 2 picks – C and SWHC. I sold 50% of C at 2.53, my first target for a 24.6% profit in less than 3 trading days. SWHC was even better. I closed SWHC at $3.75 for a 30.7% profit within 24 hours. Our day trade picks UYG and MS had a phenominal day with over 10% gains. Other picks – DRI, CMG, ATHN, BMC, gained a little or stayed flat. SVR did not hit the ‘buy limit’, hence was not bought.
At the end of Tuesday, I have the following positions still open that I discussed in the blog - C (50%), DRI, CMG, ATHN, BMC, UYG, and MS.
Picks for Wednesday - I expect the positive momentum to continue with the financials. I’ll ride my financial picks – C, UYG, and MS with tight stops. Will also consider WFC and BAC for day trading, with a profit target of 5 to 10%. Technology sector started to pick up some momentum toward the end of the day on Tuesday. I’ll be watching some technology stocks like HPQ and WDC, and also our Tuesday’s pick BMC.
As I said earlier, there were some positive ‘stimulus’ for the markets in President Obam’s speech. Infrastructure, cutting edge technology, financials, and education, especially those that provide educational loans - are the beneficiaries of Obama’s plan. I do not like infrastructure plays at this point. I already have some financial and technology stocks in my portfolio. I would like to focus on ‘educational loan’ companies like STU and SLM and see how they react tomorrow.
Following are my picks for Wednesday, February 25, 2009
1. PBR – Buy above 27.05, Stop at 25.00, Target 30.50 ( you could also write March 30 calls, and collect some premium)
2. MELI – Buy above 14.90, Stop at 14.50, Target 16.80 (Earnings play and a possible day trade candidate)
3. ADM – Buy above 28.50, Stop at 26.50, Target 34.00 (somewhat volatile)
4. SVR – Buy above 15.80, Stop at 14.25, and Target 19.00 (Pick from Tuesday, 02/24/09)
Stocks on the radar – MON AGU IPI SLM STU HPQ WDC. I’ll let you know as soon as I spot any trading opportunity with these stocks.
Have a great Wednesday …. and happy trading.
TaurusTrader
