Category Archives: President Obama

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

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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

Focus List for Wednesday, 03-04-2009

Tuesday’s recap:  One more negative day for the markets, five in a row.  There were dismal existing home sales and a disastrous auto sales data.   Ben Bernanke, Tim Geithner, and even Barack Obama could not inspire the markets to close in positive territory.  Dow, however, swung in a wide 150 point range between positive and negative territories.  By the end of the day, Dow closed at 6726 shedding 37 points or 0.6%, a level not seen since April 21, 1997.  Similarly, the all important S&P could not hold the 700 level and lost 4.5 points or 0.6% to close at 696.3, a close seen way back on October 28, 1996.  Nasdaq fared a little better, closing almost flat at 1321 (-1.8 points), and still holding the November 21, 2008 low.  

PALM and THRX were our picks for today.  THRX briefly hit out entry target soon after the market open, but the volume was so low that my orders were not filled.  It never came close to trigger again rest of the day.  On the other hand, PALM triggered the entry price of 7.70.  It rose to as high as 8.00 before pulling back.  Monday’s pick, ORDC was not filled.  PBR was stopped out for a loss of  about 7.5%.  PBR is a good stock, I’ll probably re-enter the trade soon. 

We will probably be stopped out of PALM at the market open tomorrow.  PALM, surprisingly preannounced some bad news after the market close today.  The stock had dropped over 10% in after market trading.  It’s all in the game.  We need to be prepared.  Market Gods giveth some …. and taketh some away unexpectedly.

I had 3 profitable day trades with MS and WFC (please see my earlier blog entry today).  These trades netted 1.35 points in little over an hour.

Picks for Wednesday, March 3:  Last remaining 3 days in the week are extremely important, which are are loaded with release of sensitive economic data, most importantly, the employment figures.   We will get a glimpse of what  to expect wih the release of ADP report prior to market open  tomorrow.  Consensus is that Friday’s unemployment data would indicate a loss of 630K jobs.  The market may have already baked in this number, but substantial loss above 630K would be a real trouble.  If the S&P doesn’t stabilize around at least 700 (740 to 760 is preferred), it will have a difficult time ahead technically.  The next close support is around 600. 

I’ll be watching for sales and earnings report from wholesale club giants BJ and COST, and also from the home builder TOL  for trading opportunities in retail and ‘home building sectors’.  Many of the retailers will be providing same store sales figures on Thursday.  As in past couple of days, I’ll have the teen retailers ARO, and BKE on my watch list along with deep discount retailers, BIG and FDO. 

Keep an eye on Ag and fertilizer stocks.  I believe that ag sector stocks will pickup momentum very soon.  North American planting season will begin shortly. Most of these companies make more than 60% their annual sales in the next few months selling seed, pesticide, fertilizer, etc  to farmers.   They have been unfairly punished the past few days on the news that Obama administration would be target farm subsidies for cuts.   

My favorite ag stocks are – MON, IPI, AGU, and SYT.  AGU took a big hit after announcing $3.4 billion hostile bid for CF.  I believe it is over done, and AGU is due for a ‘big bounce’.  There’s also some rumor in the market place that SYT may be looking to acquire the ‘ag division’ of struggling DOW.  So, be ready to pull the trigger on any positive momentum.   IPI is also a good candidate to day trade, and my observation is that it usually moves in tandem with Crude.

I do not have any specific picks for Wednesday.  But, I’ll be ready to pull the trigger at any time with stocks mentioned above.  There is still tremendous volatility associated with financial sector stocks that could be exploited for quick day trade opportunities.  The stocks that I follow are MS, WFC, and BAC.

Good luck trading.  If there are questions or comments, please do post.

Regards,

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 Friday, 02-27-2009

Thursday’s Recap – It was a tale of two halves.  Morning session was full of excitement, anticipation, and hope – hope for a reversal.   Markets ignored some very dismal economic numbers.  It was just ready to rally.  It even liked President Obama’s roll out of enormous budget, for about an hour or so.  I even sent out a blog about it in surprise (The President Speaks …. Markets didn’t Panic!!!).  It was all rosy ….

Then it was my fault …. I tuned in to CNBC.  Oh my!!.  There was panic and pandemonium in the studio.  The ‘know-it-all’ all powerful market experts of CNBC were ranting, raving,  arguing emotionally, and throwing sensational tag lines like ‘revolt of the rich’,  ‘class warfare’, ‘war against the wealthy’, etc etc etc.  They were picking apart the budget proposal.  It must have scared the heck out of every living being watching CNBC.   The markets started drifting between positive and negative territories, and firmly ending in solid red.   I may be off a little bit, but it sure looked like the talking heads of CNBC had more clout on the market than the President!!  Dow closed at 7182, shaved 88.8 points or 1.2% .  It was over a 200 point negative turn about for Dow.  Nasdaq was even worse, losing 34 points or -2.4% to close at 1391.5.  S&P was chopped by 12.1 points or -1.6%  to close at 752.83.  S&P is about 11 points shy of November 21, 2008 low of 741.02.  S&P came just within a point of breaking this low on Monday.  It is very critical that S&P hold this low tomorrow and close out horrendous February. 

I’m not completely happy with every thing in the budget either.  But, there are some items in there that can do this country good immediately as well as in the long run.  Some sectors benefit, while there is pain for certain sectors of the market because of dramatic shift in focus.  Health care, drug, and student lending stocks took a beating.  Some of these stocks are down 30 to 40% in the past couple of days (eg. HUM, UNH, SLM, STU). 

TaurusTrader portfolio had a mixed day.  We got stopped out of DRI (-8.1% loss).  Rest of the stocks either had a slight loss or a slight profit for the day.  We were not able to add ADM and SVR which again failed to hit ‘entry limit’.  Based on my criteria (a pick is dropped if it is not filled in 3 days), I’m dropping SVR from my ‘add’ list.   

Picks for Friday, February 27  – It is the last trading day in February, and markets are bracing for worst monthly close in several years.  Markets are running on ‘ raw emotions’, and I’m looking for some sanity to return.  We need some clarity from DC, not just media events by the President.   We still do not have a clear idea on what this administration intends to do to stabilize  troubled banking sector.  Tim Geithner’s ‘stress test’ for banks is ‘stressing’ investors out of patience.  The government’s involvement  is seeping in to trading, and that is not good.  Billions of market wealth is being lost.  I hope this administration is going to realize it soon, and back off from injecting too much politics in to market.

I do not have any picks for Friday.  However, as in the past couple of days,  I’ll keep an eye on the financials – BAC, MS and WFC, for quick day trade opportunity.  If the crude trades up by over a dollar, I may also be interested in looking at – MON, SYT, IPI, HP, and SU.   I do not want to risk holding any new stocks over the weekend though.

TaurusTrader portfolio currently holds – CMG, UYG, ATHN, BMC, PBR, and MELI. 

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

Good luck trading.

TaurusTrader

https://taurustrader.wordpress.com