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.