Tag Archives: Ag sector stocks

Stocks to Watch for Wednesday, March 11, 2009

Tuesday’s Recap:  What a reversal of fortune!!  If we can string up a few more days like this …. I sure can dream of retiring!  It was a “hard to lose” day.  Pick any stock, it probably closed up.  If any one did not have a winner today, they need to check their stock picking skills … I’m serious!!

The markets were due for a bounce after such a prolonged over sold condition.  The time was ripe for some good news that the bulls could pounce upon!  It came from the City CEO Vikram Pandit before the markets opened.  He gave some rosy picture for City.  Who cares for the details!!  It was good enough for the banking stocks to rally!  Then came more news.  Congressman Barney Frank announced that SEC may consider bringing back the up-tick rule as early as next month.  Also, in the background, many traders were weighing on congressional committee meeting later this week to support temporarily relaxing the mark to market accounting rule for banks.  Race for short covering started in earnest providing more fuel to the rally as the day progressed.  This is the kind of day the TaurusTrader has been patiently waiting and ready for (please read my earlier blog, Week Ahead, March 9-13, 2009).

All three major indices saw substantial gains.  Dow ended up by 379 points (5.8%) to close at 6929, and Nasdaq fared even better picking up 90 points (7.1%) to close at 1358.3.  S&P rose by 43 points or 6.4% and closed at 719.6.  It was probably more than a short covering or dead cat bounce rally.  There was some indication of conviction buying.  The volume on NYSE was over 2 billion, which was higher than recent average volume.  Gains were wide spread across sectors.  Over 97% of S&P members advanced, and all 30 Dow components ended in green.  So, there could be more leg to this rally!

TaurusTrader had a great day with both swing and day trade picks.  WFC and JOYG hit their profit targets within 24 hours for 29.2 and 8.3% profit, respectively.  Four stocks triggered their ‘buy limit’, hence were added to the portfolio today.  They were – CPRT (added at $27.60), WDC ($15.30),  SOHU ($46.17), and MS ($19.70).  MR was dropped after being on the ‘buy’ list for 3 days without hitting the entry price.    Current swing portfolio holds 5 stocks,  BMC, CPRT, WDC, SOHU, and MS, along with two options, WDCDV (WDC April 12.50 call) and BIGCC (BIG April 15 call).

Our day trade picks for Tuesday also had a phenomenal day.  The financial picks – BAC (up 37.6%), WFC (up 23%), and UYG (up 28.5%), and Ag sector picks, MON (up 6.5%), AGU (up 8%) and IPI (up 9.6%) provided ample day trade opportunities. 

Picks for Wednesday, March 11, 2009:  I would keep a close eye on banking stocks, specifically – BAC, WFC, and MS.  They were already gaining from where they left off at close, in the after market hours.  Wednesday may see some more substantial gains for these stocks.  Energy, shipping, technology, mining, and ag sector stocks are also of interest.  I would focus on HP, DSX, MELI, IPI, AGU, and JOYG for any day trading opportunities.

Also, I would like to add the following stocks to TaurusTrader swing portfolio:

1.  DRYS – Buy above $4.65, Target $6.50, Stop $3.95

2. MBT – Buy above $28.35, Target $33.10, Stop $24.30

Good luck trading ….

TaurusTrader

http://www.taurustrader.wordpress.com

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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 Thursday, 02-26-2009

Wednesday’s Recap – Markets opened in the negative territory, and deteriorated rapidly following a dismal housing data.  There was also a renewed fear about ‘stress testing’ banks.  However, today’s testimony by Ben Bernanke to house finance committee held the market slide under check.  Mr. Bernanke looked very calm and confidant.   Two things became clear to me from his 2-day testimonies. First, he is against nationalizing banks.  Secondly, he is completely supportive of President Obama’s stimulus and capital assistance program to bolster banks and economy.  Then in the afternoon, CEO of Bank of America, Ken Lewes came out and said that his bank would pass the ‘stress test’ and BAC would exceed 100 billion in revenue in 2009.  Soon, the financials started turning around, and pulled Dow, Nasdaq, and S&P in to positive territory.  However, the rally was short lived and all three indexes ended in red by a little over 1% in the end.  President Obama’s appearance toward the end of the day did not help.  Market is still very starved for information.

Among our picks, we were able to close C and MS positions for healthy profits.  We added PBR and MELI – both had a decent day.  UYG is still up by around 10% from our entry.  Rest of the picks – DRI, CMG, ATHN, and BMC fluctuated between positive and negative territories, and ended the day almost flat.  We were unable to fill SVR and ADM as they failed to hit our ‘entry limit’.

Picks for Thursday, February 26:  I do not have any picks for tomorrow.  The market condition is somewhat fluid.  However, I would still be keeping an eye on my favorite financials – BAC, WFC, and MS to day trade or to swing trade.  I will also keep an eye on energy, technology and ag sector stocks.  In energy I will be specifically looking at HP.  In technology, my focus would be on HPQ and WDC.  DELL will be releasing its earnings tomorrow, hence, watch out for ‘sympathy’ response in rest of technology stocks.

Ag sector stocks are ripe for a good rebound.  Planting season in North America is about to begin.  Companies involved in selling seed, pesticides, and fertilizers to farmers will see their sales start go up rapidly during this time of the year.   There is also some consolidation going on in this sector (eg – AGU and CF, CF and TRA).  Many stocks have come off substantially in the past couple of days unfairly in response to fear on cuts in  farm subsidies by Obama administration.  The companies I’m interested in are MON, AGU, SYT, and IPI. 

Currently, the TaurusTrader portfolio hold – UYG, DRI, CMG, ATHN, PBR, BMC and MELI.

If there are questions, please do post.  Let us help each other navigate this market and make money!

Good trading ….

TaurusTrader

http://www.taurustrader.wordpress.com