Tag Archives: EQUITY PICKS

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

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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

Weekly Market Recap – April 06 to 09, 2009

Another incredible week …. five consecutive week of gains!!  The week however began on a negative note with a downgrade of prominent banks and a downbeat forecast for banking sector by Calyon Securities analyst Michael Mayo.  But the tides turned on Wednesday with the news of a $1.3 billion merger deal between home building giants PHM and CTX.  insurers also got a boost on a news that certain insurers might get help from the TARP moneys.  Thursday was a note worthy when Wells Fargo (WFC) preannounced a surprise forecast of $3 billion first quarter profit.  Stocks rallied across the board. 

For the week, the Dow was up 0.8%; the S&P 500 gained 1.7%, and the Nasdaq rose 1.9%.  Crude almost remained unchanged, but Gold lost a little luster (-1.4%). 

The volatility Index (VIX), otherwise known as the “fear index” sank below the 40-point mark for the first time since last September, 2008.

Index

Started Week

Ended Week

Change

% Change

YTD %

DJIA

8018

8083

65

0.8

-7.9

Nasdaq

1622

1653

31

1.9

4.8

S&P 500

843

857

14

1.7

-5.2

Crude

$52.51

$52.24

-$0.27

-0.5

17.1

Gold

$894.6

$881.7

-$12.9

-1.4

0.1

 

In TaurusTrader swing portfolio, we added 3 new positions – CMED, OMTR, and XRT.  Two positios – WFC and OMTR were stopped out.  Two recommendations, BCE and RRC did not hit the target buy price.   By the end of the week, TaurusTrader portfolio had following positions:

Stock

Bought on

Entry price

Stop

Target

4/9 close

Gain/loss (%)

WNR

Mar 17

11.80

10.95

13.60

12.95

9.75

AGU

Mar 19

37.50

34.50

41.50

38.47

2.48

AMR

Mar 16

3.70

2.80

4.85

4.52

22.16

FCN

Mar 12

47.80

45.15

52.00

48.48

1.42

HON

Mar 24

29.01

26.50

32.40

31.04

7.00

HSP

Apr 02

31.41

28.60

35.50

32.15

2.36

WDC

Apr 02

20.10

17.98

23.00

22.11

10.00

TNA

Apr 02

20.05

17.95

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

14.20

18.60

17.84

8.25

XRT

Apr 09

24.28

22.40

26.78

25.65

5.64

Picks stopped out

WFC

Apr 03

16.26

14.90

19.00

19.27

-8.36

OMTR

Apr 06

15.01

13.90

17.10

14.20

-7.40

Picks that did not trigger & dropped

RRC

Apr 06

46.04

43.20

50.50

42.72

dropped

BCE

Apr 03

21.77

19.90

24.50

20.90

dropped

Apart from these. TaurusTrader also has small open positions in WFC  (bought at $13.75), and MS (bought at $22.30).  These trades were discussed in my April 2 blog.

Next week is a heavy economic and earnings data driven week …. please trade cautiously.

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

Week Ahead for Stocks – April 6 to 10, 2009

It’s been great 4 weeks for the stock markets which saw 4 straight weekly gains. For Dow, this 4-week gain is the largest percentage gain since 1933.  The gains were widespread.  Nine out of 10 sectors in S&P gained, and the lone exception was health care which lost about 2%.   Nasdaq is now over 2% positive for the year.  There were some good news amidst several negative economic data that market ignored in anticipation that the bottoming process of economic downturn is imminent.  There are still concerns abound, especially with the housing, commercial real estate, unemployment, and of course the banks and their balance sheet.   Any bad news can pull the indices back down to earth easily.

Official earning season kicks off on Tuesday with Alcoa stepping in to earnings confession.  Earnings estimate for major companies have dropped significantly.  More than 70% of S&P companies are expected to post a decline in earnings compared to the past year.  So, the earnings season is a major concern for markets.

Around 30 companies are expected to report earnings this week.  I’ll be watching the following releases closely –

  • Monday:  APOG, BLUD
  • Tuesday: AA, BBBY, MOS, RT
  • Wednesday: STZ, FDO, GBX, SGR, WDFC, SMSC
  • Thursday:  CBK, MTRX
  • Friday: Market is closed for Good Friday.

For details on earnings calendar, please visit:  http://www.zacks.com/commentary/10514/Earnings+Preview+for+Apr+6+-+10

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

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

  • Monday: Fed Gov. Kevin Warsh speaks on Financial Markets.
  • Tuesday: Red book, Consumer credit data.
  • Wednesday: MBA purchase applications, Whole sale trade, EIA petroleum reserve data, FOMC minutes.
  • Thursday: Chain store sales, International trade data, Initial weekly jobless claims, Import-export prices, EIA nat gas report. Larry Summers speaks at 12 pm.  Money supply.
  • Friday: Treasury surplus.  Markets closed for Good Friday.

Picks for Monday, April 6: Markets have gone up too fast too soon.  No major data releases are scheduled, hence markets will have a calm day to digest past moves.  Weekend news events may influence a positive market open.  Ben Bernanke indicated that the credit markets may be thawing …. this is a good sign.  Also, the European banking giant, HSBC raised $17 billion in a largest ever rights offer in UK, which was well received.

As I complete this post, Asian markets are doing OK, and pretty much ignored North Korea’s Rocket launch and the following world condemnation.

I will keep the following stocks on my radar through out the week for possible inclusion in swing portfolio or for day trading opportunities:

KMB, COP, SGP, WAB, OMC, TTC, UL, HLF, TIE, WLL, MET, SII, HAIN, PTEN, AA, SD, HXL, OIS, EXM, ADM, PBR, SLAB, DRYS, MOS, MELI, FAS, BAC, MTH, IYT, ARO, FOSL, DZZ, and DIG.

If the stocks continue with their momentum to upside, I expect to see considerable downside potential for Gold (GLD, DGP) and Gold mining stocks (XME, GOLD, AUY).  So, watch carefully if you have any gold or gold mining stocks.

I’ll be looking to add the following to TaurusTrader swing portfolio on Monday:

  1. CMED – Buy above 16.48, stop $14.20, target $18.60 (very volatile)
  2. RRC – Buy above $46.04, stop $43.20, target $50.50
  3. OMTR – Buy above $15.01, stop $13.90, target $17.10 (very volatile)

Per my previous post, I’ll not be day trading.  hence, will not provide any day trade picks for Monday.

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

Have a great week and happy trading.

TaurusTrader

http://www.taurustrader.wordpress.com