Stocks to Focus for Thursday – April 16, 2009

Wednesday’s recap:  What a mad dash to finish …. Stocks surged in the last hour before closing, lifting all three major indices from deep red to green.  

The last-hour surge pushed the Dow up 109 or 1.4%  to 8030.  The S& P 500 index rose 10.6 points  or 1.3%  to 852, and the Nasdaq snuck in to green with a final minute thrust and edged up 1.08, or 0.1% to 1627.   Crude 16 cents to settle at $49.25 a barrel, while gold was down $1.50 to $893.50 an ounce.

The impetus for the final hour turn around was provided by the observation in Federal Beige Book that economic contraction may be slowing down.  The market interpreted this as ‘the end is closer’ ….

TaurusTrader portfolio had a decent day.  AMR was one of the stars in today’s rally, hit it’s first target of $4.85 for a profit of 31.1%.  50% position in AMR was closed today.  For the remaining 50%, the second target is $6.50.  XRT was stopped @ $24.60 (stop moved up once), but still made over 1% profit.  AGU again came very close to hitting the profit target for the second day in a row.  FCN, HON, and EXP had decent gains.

Picks for Thursday, April 16:  An increasing stream of quarterly results from companies is likely to add to the market’s volatility.  Reports from JPM andGOOG on Thursday could reshape how investors feel about the financial and technology industries. Figures are also due on home construction and unemployment claims.

I’ll wait for reports from JPM and GOOG before committing fresh money on new picks.  However, if JPM reports a great quarter, and the market responds positively, I would buy FAS (Financial 3X long ETF) at around $9.50, and hope to ride the momentum till it hits $11.60.

I’ll also have following stocks on my radar for any swing trading opportunities:  WFC, MS, MELI, IPI, HP, TCK, and BX

That’s it for now …. Good luck trading.

TaurusTrader

http://www.taurustrader.wordpress.com

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

Week Ahead for Stocks – April 13 to 17, 2009

The coming week is filled with market moving economic and earnings data releases.  It would be interesting to see whether the momentum built upon WFC preannouncement would continue with other positive earning releases.  29 of S&P 500 companies, including 5 Dow components (highlighted in bold) are scheduled to announce earnings.  I would be watching the following releases intently:

• Monday: JBHT, TLB
• Tuesday:  FAST, GS, JNJ,ADTN, CSX, INTC
• Wednesday:  ABT, SCHW, INFY, LUFK, BTU, PGR, CCK, KMP, LSTR, LLTC, STX
• Thursday:  APH, BAX, BGG, GPC, ITW, JPM, NOK, NVR, PH, PII, SON, LUV, TITN, VIP, BIIB, GOOG, ISRG, SNDK, TK, WERN
• Friday:  AOS, BBT, C, GE

Economic data:  Following economic data releases are scheduled:

• Tuesday:  March producer prices and Retail sales
• Wednesday:  Consumer price index, industrial production data for March, New York manufacturing survey, and housing market index for April, Beige book, Crude inventories
• Thursday:  Housing starts, Jobless claims, Philly Fed survey, and Natural gas report
• Friday:  Consumer sentiment from the University of Michigan, and Ben Bernanke speaks

For details on economic data releases, please refer to:   http://online.barrons.com/public/page/barrons_econoday.html

TaurusTrader portfolio:  To begin the week, the portfolio contains 12 positions.  All 12 have positive unrealized gains and some have have substantial accumulated profits.  So, I’ll be moving the ‘stop loss’ limit on these picks to protect profit and to reduce losses if the market turns against us.  The new stops are noted in “bold” in the following table. 

Stock	Bought on	Entry price	Stop	Target	4/9 close	Gain/loss (%)
WNR	Mar 17	11.80	11.85	13.60	12.95	9.75
AGU	Mar 19	37.50	34.50	41.50	38.47	2.48
AMR	Mar 16	3.70	3.55	4.85	4.52	22.16
FCN	Mar 12	47.80	45.15	52.00	48.48	1.42
HON	Mar 24	29.01	28.50	32.40	31.04	7.00
HSP	Apr 02	31.41	28.60	35.50	32.15	2.36
WDC	Apr 02	20.10	19.98	23.00	22.11	10.00
TNA	Apr 02	20.05	18.50	23.80	23.10	15.21
EXP	Apr 02	25.50	22.75	28.50	26.51	3.96
FMX	Apr 03	27.08	24.50	30.50	27.89	2.99
CMED	Apr 06	16.48	16.03	18.60	17.84	8.25
XRT	Apr 09	24.28	24.60	26.78	25.65	5.64

I do not have any picks for Monday … I’ll wait for a day or two and see how this earnings season would roll out. Per my previous post, I’ll not be day trading.  hence, will not provide any day trade picks for Monday also. 

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

Have a great week and 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

The Week Ahead – March 23 – 27, 2009

Weekly Recap (March 16 – 20, 2009):  Even though markets sputtered to a whimper toward the end of the week, major indices gained for two weeks in a row which hadn’t happened in a while.  For the week, Dow eked out a 0.8% gain to close at 7278, where as, S&P and Nasdaq gained a modest 1.6% and 1.8%, respectively.  S&P made a strong attempt to break 800 point barrier and the 50 day MA, but did not succeed and closed at 769.  Similarly, Nasdaq also mounted a valiant crack at 1500 and the 50 day MA, but unable to hold either and closed at 1457.  The 50 day MA is serving as a major overhead resistance for all three indices. 

Concern about massive deficit from excessive spending to tackle the financial crises and to prop up the economy by the new administration appeared to hurt the market sentiments.  Inflationary worries dragged the dollar lower against major currencies.  Commodities mounted a huge rally with CRB index gaining over 7.1% for the week.  Crude oil gained 10.7% and vaulted to $52.07 at the closing on Friday’s trading.  Gold gained 2.4% ($952.3 per oz) as traders bought gold as a hedge against anticipatory inflationary pressure.

TaurusTrader swing portfolio had a mixed week.  WFC achieved the target and was closed for a nice 15% profit in 3 days.  None were stopped out, but a couple of stocks came very close to being stopped out.  At the end of the week, the swing portfolio was long in 13 positions, out of which 9 had unrealized gains (TCK, RY, MBT, BX, MDR, CPRT, WDCDV, BMC and WSM)  and 4 had some losses (WNR, AGU, AMR and FCN). 

CPRT, MBT, RY and BMC came within just a few cents of reaching the profit target before retracing …. ouch!!

Week Ahead, March 23 -27, 2009:  It will be a very crucial week for the markets.  Actions coming out of Washington will greatly influence the market direction.  There’s a big struggle going on between Wall-street and Washington.  Unless this struggle is resolved, and mutual trust restored, the choppiness of the market will continue.  As individual traders, we can’t influence either, and it is frustrating.  But, what we can do is be vigilant and very reactive (not proactive) with out trades.

Treasury will be laying out its private-public partnership program to rescue the financial markets tomorrow (Monday) morning.  This announcement will dictate the market direction at least for all of next week.  It is hard to predict how the markets will react, but the anticipation is high.  As I write this blog past midnight , the Asian markets are up in anticipation of a positive proposal by Tim Geithner.

On the earnings front, just 58 companies are scheduled to report this week.  Some important reports that I would be watching are:

• Monday:  FMCN, PVH, SONC, TIF, and WAG
• Tuesday: CCL, CMC, JBL, MKC, WSM (TautusTrader is long WSM)
• Wednesday: CTRN, CKR, PAYX, and SAI
• Thursday: ACN, BBY, DPS, ERJ, FINL, GME, LEN, and UTIW

For details on earnings calendar, please visit:  http://www.zacks.com/commentary/10374/Earnings+Preview+for+Mar+23+-+27

 Economic Calendar:  Following economic news might have impact on the markets -

• Monday: 10:00 a.m. Feb Existing Home Sales: Expected: -0.2%. Previous: -5.3%.
• Tuesday:   1) 7:45 a.m. ICSC Chain Store Sales Index For Mar 21: Previous: -0.1%. 8:55 a.m.;  2) Redbook Retail Sales Index For Mar 21: Previous: unch.;  3) 10:00 a.m. Mar Richmond Fed Mfg Survey: Previous: -51;  4) 4:30 p.m. API Oil Industry Report For Mar 20;  5) 5:00 p.m. ABC/Wash Post Consumer Conf For Mar 21: Previous: -47;  6) Ben Bernanke testifies.
• Wednesday:  1) 7:00 a.m. Mortgage Applications Refinance Index: Previous: +29.6%.;  2) 8:30 a.m. Feb Durable Goods Orders: Expected: -1.6%. Previous: -5.2%;   3) 10:00 a.m. Feb New Home Sales: Expected: -3.6%. Previous: -10.2%;   4) 10:30 a.m. US Energy Dept Oil Inventories For Mar 20.
• Thursday:  1) 8:30 a.m. Initial Jobless Claims For Mar 21 Week: Expected: +8K. Previous: -12K.; 2) 8:30 a.m. 4Q Final GDP: Expected: -6.7%. Previous: -6.2%;  3) 10:00 a.m. DJ-BTMU Business Barometer For Mar 14: Previous: +0.5%;  4) 10:30 a.m. EIA Natl Gas Inventories For Mar 20.
• Friday:  1) 8:30 a.m. Feb Personal Income: Expected: -0.2%. Previous: +0.4%;  2) 8:30 a.m. Feb Personal Spending: Expected: +0.3%. Previous: +0.6;  3) 10:00 a.m. End-Mar Reuters/U Mich Sentiment Index: Expected: 57. Previous: 56.3. 

Picks for Monday, March 23:  Treasury’s announcement of financial rescue plan will have significant impact on the markets – finacials in particular.  Based on the news events before markets open, I may open some position in financial ETFs – FAS or FAZ.    Other than this, my picks for swing portfolio are:

• HNT – buy above $15.75, Target $17.32, Stop $14.40
• RIO – buy above $14.26, Target $16.20, Stop $13.65

Thre could be a lot of volatility assciated with financial stocks tomorrow.  I’ll be looking at the following for day trade opportunities:  FAS, FAZ, WFC, BAC, and MS. 

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 Friday, March 20, 2009

Thursday’s Recap:  Rally faltered a little bit.  Markets declined for only the 2nd time in 8 days.  Financials lost steam and took the major averages down.  It is probably a good thing.  Banking sector had gone up too far, too fast.   XLF has been up over 60% in less than 2 weeks.  Some cool off was overdue.  XLF ended the day losing about 8%. 

Dow shed almost all the gains it made yesterday by losing 86 points or 1.2%, and closed at 7401.  Nasdaq lost 0.52% or 7.74 points to close at 1483.5, while the S&P 500 declined by 1.3% or 10.3 points to 784.

So, technically speaking…. looks like 50 day MA is the Achilles heel for major averages to overcome.

All three indices are at technically interesting juncture. Dow is 220 points away from its 50 day MA, which it has not crossed since January 7. Dow came very close to taking out 50 DMA on February 9, but it was flatly rejected. S&P has breached 50 day MA for two consecutive days now, but could not close above it.  S&P also has not closed above 50 DMA since January 6th.   Current 50 DMA for S&P stands at 794,  just 10 points away from today’s close.

Nasdaq has however, closed above 50 day MA for 2 consecutive days now.  But,  is barely above (by 22 points) the 50 DMA (1461).   It would be interesting to see whether Nasdaq would be able to hold above its 50 day MA in the next couple of days.

Is Dollar Worry Over Blown? - There were renewed worries about the greenback following yesterday’s fed decision to spend another trillion dollars to bolster economy.  Dollar declined against major currencies for 2 session in a row since then.  Dollar lost 4% against Euro in less than 24 hours.  That’s a big move.  This led to a bounce in commodities and commodity related stocks in today’s trading.  The CRB Commodity Index rose more than 5% (largest single-session advance by percent this year). Crude oil gained 6.5% to close at $51.25 per barrel.  Gold advanced by 7.8% to close at $958.50 per ounce.  Energy stocks (+1.4%) and materials stocks (+1.4%) also rose. 

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!  Very strong dollar in the past few months had hurt US companies doing business abroad.  An example is ORCL, which reported a great quarter yesterday.  ORCL beat the street estimate by 2 cents.  Still, ORCL numbers would have been 5 cents better if it were not for a stronger dollar.  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.

TaurusTrader swing portfolio had a decent day.  AGU and TCK were bought and added to the portfolio.  None were stopped out.  Today’s gainers include – AGU, TCK, BX, MDR, CPRT, +WDCDV, BX, BMC, and WMS.  Stocks – MBT, WNR, and RY shot up at the open, but lost steam later in the day ending in red, along with AMR and FCN.  CPRT, RY and MBT came within just a few cents of hitting the target before retracing!!!

It was just one of those very rare days that I could not find a decent trading setup to day trade!  It is better NOT to trade when there are no trades to be made with confidence!!

Picks for Friday, March 20:  It is a tripple witching day for options.  Expect a very choppy session and the stocks to trade in a wide range.  I do not want risk picking any stock to go long at this kind of market condition.  However, I do want to ‘day trade’ precisely at this kind of market condition, and exploit the market volatility . 

I’ll focus on financial, energy, ag and commodity sectors for trading opportunities.  Some of the specific stocks that would be following are – FAS, WFC, MS, TNA, DIG, DUG, IPI,  AGU, and JOYG.

If there are questions or comments, please do post. 

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Happy trading ….

TaurusTrader

http://www.taurustrader.wordpress.com