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

Week Ahead for Stocks, March 30 – April 3, 2009

Weekly Recap (March 16 – 20, 2009): Stocks made some historic progress …. gained for three weeks in a row, the largest move since 1938.  It was a huge 3-week rally.  However, markets stuttered a little bit on Friday heading into the weekend mostly from profit taking.

On Friday, the Dow fell by 148 points or 1.9% to end at 7776.  The S&P 500 fell 16 points or 2% to end at 815, while the Nasdaq lost 41 points or 2.6% to end at 1,545.

Index	Started Week	Ended Week	Change	% Change	YTD %
DJIA	7278.38	7776.18	497.80	6.8	-11.4
Nasdaq	1457.27	1545.20	87.93	6.0	-2.0
S&P 500	768.54	815.94	47.40	6.2	-9.7

For the week, the Dow rallied 6.8%, the S&P 500 gained 6.2% and the Nasdaq rose 6%.  For the month so far, the Dow is up 10.1%, the S&P is up 11% and the Nasdaq added 12.2%.  The S&P 500 is now up 22.4% from its March 6 low of 666.8 points.

The bulk of the gains however were made on Monday with the major indices gaining over around 6% on the news of Treasury Dept releasing details on its plan to remove troubled assets from the balance sheets of banks.The gains continued, albeit modestly through rest of the week, building on some better than expected data from the housing sector, February durable goods, and final 4th quarter GDP.

Believe it or nor, the treasury auctions usually a non-market event, turned out to be a major market mover this week due to some saber rattling by China by its negative comments on US debt.

Tim Geithner and Ben Bernanke appeared before Congress during the week.  Geithner also appeared on Sunday morning media circuit touting administration’s ideas and plans to jump start the economy.  Geithner is looking more and more confident, and markets are slowly warming up to the new Treasury secretary.

In the end, all ten sectors posted solid gains for the week.  Financials advanced 12.2% , industrials gained 10.5% and consumer discretionary advanced 8.8%.

TaurusTrader had a phenomenal week.  Seven positions in the swing portfolio achieved profit targets, ranging from 8.6 to 47.4%.  The positions that hit profit target, hence closed were – TCK, MELI, BMC, RY, CPRT, BX, and WSM.  Also, the April 12.50 call option in WDC (WDCDV) was also closed netting 100% profit. Please refer to my earlier posts for details.  None were stopped out.  TaurusTrader also had several successful day trade opportunities for 2 to 5% profit per trade in several recommended equities – FAS, MS, WFC, TNA, and BAC.

At the end of the week, TaurusTrader was long in – WNR, AGU, AMR, MBT, FCN, MDR, HNT, RIO, HON and BAC.

Week Ahead, March 30 – April 03, 2009: Markers are in oversold condition. Some pull back is possible, especially at the opening on Monday.  Like in previous weeks, markets will mostly be driven by news coming out of DC on auto industry bailout and banking regulations.   The G-20 meeting of finance ministers on April 2 is another media event that could have some impact on currencies.  We may need to keep an eye on how the bond and treasury auctions go. There will  be a hearing on mark to market accounting which could impact the markets.  Fed Chair, Ben Bernanke and Vice Chair Don Kohn are scheduled to speak on Friday in separate events.  On the earnings front, 52 companies are scheduled to report this week – the last week before the “official” start of 1st quarter earnings.  Some important reports that I would be watching are:

• Monday:  CALM, LAYN, SNP, CHT
  
• Tuesday: APOL, BGP, GIGM, LEN, SAH
  
• Wednesday: WOR
• Thursday: AYI, MDRX, LNN, MU, MON, RIMM
• Friday:  AZZ
  

For details on earnings calendar, please visit: http://www.zacks.com/commentary/10445/Earnings+Preview+for+Mar+30+-+Apr+3

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: None
• Tuesday: 1) 9:00 am, Mar. Consumer confidence (27.0 up from 25.0);  2)  9:00 am, Jan. S&P/Case-Shiller home price index, (unchanged -18.5%);   3) 9:45 am,  Mar. Chicago PMI (34.7, up from 34.2);
• Wednesday: 1) 8:15 am, ADP employment change; 2) 10:00 am, Feb. Construction Spending (-1.6% up from -3.3%);  3) 10:00 am, Mar. ISM index (36.5 up from 35.8)   4) 10:00 a.m. Feb.  pending Home sales (-2.0% vs -7.7%);   5) 10:30 am, US Energy Dept Oil Inventories For Mar 27;  6) 2:00 pm. Mar. Auto sales.
• Thursday: 1) 8:30 a.m. Initial Jobless Claims For Mar 28 Week;  2) 10:00 am, Feb. factory Orders (-0.3% vs -1.9%;
• Friday: 1) 8:30 am, Mar. Av. work week (33.3 unch.); 2) 8:30 am. Mar. Hourly earning (0.2% unch.);  3) 8:30 am, Non-farm payroll (650 K); 4) 8:30 am, Mar. Unemployment rate (8.5% vs 8.1%); and 4) 10:00 am, Mar. ISM services index (42 vs 41.6).

Picks for Monday, March 30: The big question on every ones mind on Monday would be “whether the rally of the past 3-weeks is real, can I jump in or wait on the side lines”.  No major economic data or earnings releases are slated for Monday.  So, it would be somewhat challenging to predict how the markets would react.  I thought  Geithner did OK with his media appearances over the weekend.  But, it may not be enough to move the markets.  I’m going to wait it out.  I’ll not have any picks for Monday for our swing portfolio.  I’ll watch my positions with tight stops.

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

ORLY, NFLX, DRYS, DSX, IPI, MOS, MON, RIMM, AXP, BWLD, AMZN, WDC, MELI, FAS, WFC, BAC, MTH, IYT, COV, HUM, DE, ARO, FOSL, and GME.  Also, Gold (GLD, DZZ or DGP) and Gold mining stocks (XME, GOLD, AUY).  I expect some accelerated “directional” movement to occur with Gold and Gold related stocks in the next few days.

As in past few weeks, I expect considerable volatility associated with financial stocks.  So, I’ll be looking at the following for day trade opportunities:  FAS, 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

The Week Ahead, March 16 – 20, 2009.

Weekly Recap (March 9 – 13, 2009):  TaurusTrader’s prophecy to begin the week, ” ….  expect some bounce up for the markets this week ……. planning on exploiting any  ‘bounce ups’ as and when they happen …..”, did indeed come true.  It was not pretty to begin with on Monday, but Gosh, things changed in a hurry … when the rally started, it did not waste any time …. it just took off.  All major indices had substantial gains not seen in a while.  It was the kind of rally, no matter what you call – a bear market rally, reversal rally, short cover rally, Obama rally, anti-Obama rally, Bank CEOs rally, Stewart-Cramer rally, etc etc etc, that the TaurusTrader was waiting patiently, totally planned with right picks, and pounced on for profits! Please refer to my blog posts through out the week for details.  I hope you did well too.

For the week, Dow traded in 800 point range (6440 to 7243) to close at 7224 and gained an impressive 597 points or 9%.  S&P gained 10.7% or 73 points to close at 756.6 (range 673 to 758), a close above November 21 low of 741.  The tech heavy Nasdaq market gained 10.6% or 138 points for the week  closing at 1432 (range 1266 to 1434).

Major worries about the stability and viability of major banks were somewhat abated by upbeat statements by CEO’s Vikram Pandit of City, Jamie Dimon of JPM, and Ken Lewes of BAC – all indicated that their banks are lending and making profits!  Even though, the GE credit was downgraded by a notch to AA+, it did not hurt as the market was expecting even worse.  So, GE gained, instead of losing ground!  More importantly, the Obama administration has started talking ‘coherently’ and in unison about their plans for rescuing financial institutions and fixing economy.  Congressional hearing about modifications in mark to market accounting practice to deal with toxic assets on balance sheet of financial institutions, and SEC’s inclination to bring back the ‘uptick’ rule for shorting stocks, also added fuel to the rally. 

TaurusTrader’s swing portfolio had a fantastic week.  Five positions hit their profit targets within a short holding period of 1 to 5 days. 

1. WFC bought on Marck 9, sold on March 10 for 29.2% gain
2. BIGCC (BIG April 15 call), bought on March 6, sold on March 11 for 70% gain
3. WDC, bought on March 10, sold on March 12 for 11.8% gain
4. MS bought on March 10, sold on March 11 for 20.1% gain
5. JOYG bought on March 10, and sold on March 11 for 8.3% gain

None of the positions stopped out this week.

Because of wide intra-day price swings, we had several reccurring  profitable day trade opportunities throughout the week with our day trade picks – MON, AGU, IPI, SYT, BAC, WFC, MS, HP, HPQ,  FAS and MELI.  I had mentioned several of those trades in my daily posts.

Week Ahead, March 16 – 20:  Please do not kid yourself.  No matter what you hear from experts on CNBC, we are still in a historic bear market.  Negativism still exists, and is likely to persist for a while about the health of our economy, viability of financial institutions, political squabbling, etc.  Even in bear market, we get some burst of enthusiasm and positive uptrend periodically, like the one we got last week.  It usually is very fast and very violent!  Now you see it, you feel it, but the very next moment it is gone heading in the other direction … even faster!!  So, as I said before, be patient and be prepared to exploit those kind of movements as and when they happen.

I expect the markets to swing widely based on ‘instant news’.  There’s a lot of scheduled events that could move the markets in a blink.  It would be interesting to see how the markets would react to the ‘weekend news events’  – Ben Bernanke’s appearance on 60 minutes, OPEC’s decision to hold the oil out put steady, meeting of G-20 finance ministers, and contradictory statements made by Obama’s honchos on the health of economy at their news media circus acts!  

I liked Ben Bernanke on 60 minutes.  Thought he was forthright and heading in the right direction.  He was emphatic in asserting that the recession could end in 2009, and no big banks would fail under his watch.  Of course, there were caveats – the ‘political will’, mostly the lack of it and how soon the finanacial system can be stabilized.  In all, no harm done with this highly anticipated event!

Tim Geithnet did OK at the G-20 meeting …. No harm done here either!

OPEC’s decision to not to cut production came as a surprise that might affect energy stocks at the open on Monday.  As I write this, the crude was down by over 4% in Asian session.

Financial stocks might continue with their momentum from last week.  A few hours ago, the CEO of HSBC announced that his bank would not ask for British government bailout.  Banking stocks in Asia were responding positively to this news, as well as to the news from G-20 meeting of coordinated efforts to stem world financial crisis.

Economic calendar is busy for the week including some important releases –

• Monday – Empire State Mfg Survey (consensus – 32.00); Industrial Production (consensus, -1.2% month to month); Bernanke speaks.
• Tuesday – Housing Starts (consensus 450 K); Producers Price Index (PPI); FOMC meeting begins
• Wednesday – Consumers Price Index (CPI); EIA petroleum stats; FOMC meeting announcement
• Thursday – Jobless claims (654K); Leading Indicators (-0.6%); Philly Fed Survey (-38.0)
• Friday – Fed Chairman Ben Bernanke speaks

For complete economic calendar for the week, please visit:

http://online.barrons.com/public/page/barrons_econoday.html

On the earnings front, 93 companies are scheduled to confess their quarterly earnings this week.  For complete list, please visit:

http://www.zacks.com/commentary/10310/Earnings+Preview+for+Mar+16+-+20

Some anticipated confessions are –

• Monday – SINA, SBLK
• Tuesday – ADBE, CSIQ, GES
• Wednesday – CLC, DRI, NKE, ORCL
• Thursday – BKS, PLCE, CRAI, FDX, WGO

At the beginning of the week, TaurusTrader’s swing portfolio contained following positions:

1. RY- filled on March 13 @ $27.70, Friday’s close @ 27.65.  Unrealized gain -0.1%.  Target 30.50.  Stop $25.60.
2. MBT – filled on March 13 @ $28.35, Friday’s close @ 28.40.  Unrealized gain 0.1%.  Target 33.10.  Stop $24.30.
3. FCN – filled on March 12 @ $47.80, Friday’s close $47.63.  Unrealized gain -0.2%.  Target $52.00.  Stop $45.15
4. MDR – filled on March 12 @ $13.40, Friday’s close $13.98. Unrealized gain 4.1%.  Target $16.00.  Stop raised to $12.90
5. CPRT – filled on March 10 @ $27.60, Friday’s close $29.43. Unrealized gain of  6.7%.  Target $30.30.  Stop raised to $27.50
6. WDCDV (WDC April 12.50 call) – filled on March 6 @ <$3.00, today’s close $4.90, gain 63%.  Target $6.00.  Stop raised to $4.00
7. SOHU – filled on March 10 @ $46.17, Friday’s close $48.66.  Unrealized gain 5.1%.  Target $50.50.  Stop raised to $46.00
8.  BMC – filled on February 24 @ $29.46, Friday’s close $29.74.  Unrealized gain 1.0%.  Target $32.00.  Stop $27.49

I’ve raised the ‘stop loss’ for WDCDV, SOHU, CPRT, and MDU to protect profits and/or to reduce losses.

Picks for Monday, March 16:  Based on the news events over the weekend discussed above, I will be watching financial and transportation sector stocks on Monday.  I will also be watching the earnings release from SINA, and for possible price action to the report.  The stocks for swing trading are –

• WFC – buy above $14.10.  Target $16.20.  Stop 11.30 (Risky and very volatile, adjust your stop to your risk tolerance)
• AMR – buy above $3.70.  Target $4.85 (50%), and $6.20 (50%).  Stop 2.80 (you could also consider DAL or CAL)

I’ll be looking at the following for day trade opportunities:  FAS, BAC, MS, ITRI, MELI, ITRI and SINA (on earnings!).  Their chart patterns and volatility look interesting!

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, March 12, 2009

Wednesday’s Recap:  A gain is a gain however small it is.  In a rather choppy trading, major indices eked out small gains to close in positive territory two days in a row in over a month!   Dow closed up 4 points, S&P gained 1.7 points, and Nasdaq fared slightly better gaining 13.4 points.  Dow failed to clear 7000, ending at 6930, S&P closed at 721.4, and Nasdaq stood at 1371.6 by the end of the day.  The financial and technology sectors held up OK, while the energy sector gave up as crude dropped 7.4%.

TaurusTrader again had a great day!  MS gapped up at open, way surpassing our target exit price.  I closed MS position immediately after open at $22.68 for a profit of 20.1% in less than 24 hours.  BIG received an upgrade this morning, and our April 15 call (BIGCC) hit our target of $5.10, for a net gain of 70%  in 4 trading sessions.  I suggested buying BIGCC on Friday the 6th, for less than $3.00. 

Our picks for today, DRYS and MBT did not hit the entry limit, hence were not bought.

As of the end of March 11,  TaurusTrader swing portfolio had following positions:

1.  CPRT – filled on March 10 @ $27.60, closed today at $28.19 for an unrealized gain of  2.1%.  Target $30.30

2.  WDCDV (WDC April 12.50 call) – filled on March 6 @ <3.00, today’s close $4.30, gain 43%.  Target $6.00

3.  WDC – filled on March 10 @ $15.30, closed today at $16.57.  Unrealized gain 8.4%.  Target $17.10

4.  SOHU – filled on March 10 @ $46.17, closed today at $49.06.  Unrealized gain 6.3%.  Target $50.50

5.  BMC – filled on February 24 @ 29.46, closed today at $28.53.  Unrealized gain -3.2%.  Target 32.00

In the past few days, we closed out MS (twice), C, SWHC, JOYG, BIGCC, WFC, and MELI for some hefty gains.  At the same time we also took some losses from UYG, PALM, PBR and ATHR after being stopped out (Please refer to my earlier blog posts).

Focus list for Thursday, March 12:  Next couple of days will be pivotal that might determine the direction of the markets for the short run.  Number of market influencing events will be taking place – 1) Traders will be watching the congressional debate tomorrow on mark to market accounting practice, 2) Treasury secretary Tim Geithnerwill be testifying before senate budget committee tomorrow, 3) advance retail sales for February are due tomorrow, along with January business inventories, and weekly jobless claims data, and 4) G-20 meeting on financial crisis and to devise coordinated efforts to mitigate the crisis.

I’ll be watching the following stocks to add to TaurusTrader swing portfolio:

1.  FCN – buy above $47.80, Target $52.00, Stop $45.15

2. MDR – buy above $13.40, Target $16.00, Stop $11.50

3.  BX – Buy above 6.31, Target $7.50, Stop $5.40

Energy stocks might see some volatility heading in to OPEC meeting over the weekend.  Technology stocks are expected to gain more on advances already made.  Banking stocks might fluctuate widely during and after the mark to market congressional hearing.  Ag and fertilizer stocks are on tear, and I expect it to continue.  So, I’ll be concentrating on following stocks for quick day trade and swing trade opportunities:

HP, HPQ, MELI, WFC, JPM, UYG, MON, AGU, and IPI.

If there are questions or comments, please do post …

Happy trading ….

TaurusTrader

http://www.taurustrader.wordpress,com