October 9 2009

In Mantech (MANT) and Myriad Genetics (MYGN) at the moment. Paradoxically, I like both the dollar (UUP) and gold, particularly Rubicon (RBY) on any pullback to longer term (100- or 200-day) moving averages.. if it'll go that low!! One of only 2 gold equities I can find breaking out to new all time highs (the other being GOLD, but that's a $73 stock). Will try to be more active with the blog. Used Wabash National to quintuple my retirement accounts in the last couple of months. Of course, had I bought BAC at $2.45 like I'd thought about, I'd be up closer to 800%! Still like WNC as a turnaround... still only an $85M company. Trying to further refine my 'system' in order to become more of an investor and less of a trader. Funny how more money to work with seems to make everything easier... Also like TranS1 (TSON) forming a double bottom and Wendy's (WEN) on any pullback. I foresee the uplift in the markets to lose some steam and drift lower for an extended period. I'll keep scanning the chart for more winners. Otherwise, concerned about my position in First Horizon (FHN). I thought it was great of them to distribute shares in lieu of cash dividends (why can't BAC or JPM do this?) while cash was tight... reward the shareholders for sticking with them. But with all of the businesses they've sold off, how much of a dividend could they afford to pay if it went back to a cash distribution? Might it only warrant a fraction of the return the equity offers now?

Where to Next?

Looking quickly at the S&P 500 chart this morning, I still see mid term downside but with the potential for some quick explosive short lived run ups. Sold CGR and SGEN calls last week for some moderate gain. Noticed SGEN at $9.97 since (naturally). Sold UA, HAS, and CPKI shares to pocket some double digit gains. Will watch UA and HAS for reentry points again. Like the charts of a host of equities for a sooner rather than later bull market but again I see declines ahead for good measure and firm footing. I do have a keen eye on COIN as I started a position - stock, not options - on Monday. Also watching to see how CAH behaves as it nears $28... again. PLA is also intriguing with the pullback. We shall see...

Fresh Buys

Stil long CGR and awaiting something, anything to happen with SGEN. I've found the following charts demonstrating strong buy signals: CPKI, CLH, NFLX and WBMD. Normally I look for new lows, but I'm trying to expand my search parameters. Each of the four has already provided high returns, but expect something more in the near future... a la GMCR when it jumped from the low 50s - and I was admittedly negative on it's valuation on April 15 - to 80 in the last month!! I'll also be tracking my picks with Yahoo Finance, assuming I buy 100 shares of each of my picks on the day I post - positively - about it. Starting with these four...

Still Waiting...

It's been longer than I anticipated, but I'm still holding my June SGEN $5 calls. Relatively unchanged and I still see a strong buy signal so will continue to hold looking for at least one good pop. Also still holding CGR even though it's up 20%. I still like gold's technicals and fundamentals. Will try my darndest to let this one ride out and see where it goes. Keep watching PLA move up through the low $3s...
Still formulating my business plan. Here are my latest premises:
Buy low - how low? The absolute bottom, of course.
Inherently can't lose money if you do (see Buffett's Rules #1 and #2).
See ya....

More Bullish Equities...

Briefly, I am intrigued by the ascending 9-, 13-, and 20-week moving averages illustrated by S, CHUX, BSX, and YHOO. Additionally, PLA, BVF, and HOTT - all previously identified using my system - have continued strength.

GM a Strong Buy

With GM retesting the $1.60 area (again) I see it as a terrific opportunity to start accumulating shares. This is predicated on the fact that previous overhead MACD resistance since the beginning of 2008 is now support, the paramount signal of my system.

Update

With the previously named equities trending higher - especially CRR - I've had to look hard for opportunities. Ended up buying the June $5 SGEN calls for $3.90 with the underlying equity trading for $8.75. A 15 cent premium with a strong buy signal seemed to offer compelling risk/reward as it tested the recent $8.75 support. We'll see.
On a different note, another equity I'd place in the category of "Wish I'd bought some... I should buy some... Every time I look it's higher and higher..." is GMCR. Starting following it around 5 years ago when it traded near $30 before the 3:1 split. (At the same time CLH, another in this category, was trading at $7). My only going concern is whether it is genuinely a $1.25B company. Not as compelling as a $250M market cap... with DF and SJM currently at $3B and $4.5B, respectively.
Lastly, I like ABAX on this pullback. Too high a premium for an options play, but a solid health tech growth opportunity nonetheless.
Until next time...

Cautious Optimism

Still think the market is overbought. Have my eyes on the following companies (targets):
BVF (10.25)
CHTT (How low will it go? Reminds me of UST before it was bought by MO)
CRR (28; buy signal still strong)
HRB (retesting 15)
KR (retest 19.50)
Q (moving avergages moving higher)
SRCL (below 46?)
WMT (below 48?)
Waiting for a downdraft...

Roll 'em Up!

... in the immortal words of Clark W. Griswold. Quickly, I sold my CRR calls last week for a 25+% gain. Tripled my money in the last month. In scanning for new opportunities yesterday, I COUDN'T FIND ONE SINGLE EQUITY TO TRADE! In cash until such an opportunity arises. Long gold as well.

Two Reasons to Sell Now

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The daily MACD and the weekly RSI of the S&P 500 say sell, sell, sell this rally! Until these 2 trend lines get broken, retested from above, and subsequently beaten down from above, the market will continue to deteriorate. These are 2 of the basics of my system. It is why RIMM tumbled in February and oil, or at least the USO and OIH funds, collapsed when they did. It is why I like CRR and CGR right now. Not all equities are created equal - even on the worst of days, there's still a list of top performers, aren't there? We shall see shant we...

Ahead of Schedule... For Now

Sold my MVL calls today for a swift 45% gain and bought the CRR $25 calls for $4.70 with the underlying equity trading at near long term support at $29.30. Took the money and ran out of PLA and into the junior gold miner CGR. Like PLA as a turn around and will continue to watch, having seen what's happened with HOTT in the last year. We shall see shant we...

Leap of Faith

Took my quick 22% gain in GSS and bought the MVL April $20 calls for $3.70. Showing a buy signal, although a bit hesitant to take off. Held around $23.30 intraday (so far) so we'll see what transpires. Looks strong on a weekly and even more so on a monthly basis over the long haul. Watching closely. Also cashed out a 35% gain in BGG. Hard to give up a position with such a great entry price, but profits are profits and weekly resistance is just above 16. Would love to see it back down below $11.50 again. Also bought SEPR at $13.73. Watching closely...

Buy Low, Buy Gold

As I said before, I believe the market has bottomed. Well, I believe the process has begun, the line drawn in the sand if you prefer, and I expect the low to be challenged at least one more time. I expect double and triple bottoms to be established in a multitude of equities in the ensuing months, if not quarters. The rally so far has been a big bounce. Obama came out and declared that in effect 'things aren't as bad as we thought they were'. Pandit sent out a 'feel good' memo. Banks have responded in kind. In the end, you can still buy C for $3.05 and BAC for $6.90 and be paid a whole penny every three months simply for holding on to the stock. Now we see how AIG's tax-payer funded doomsday bailout has 'trickled down' to large foreign banks and hedge funds. All those shiny new dollar bills printed have gone nowhere of use... unless you're a salesman at Land Rover, an illegal landscaper, or a prostitute. It is this printing press which fundamentaly supports my view of a palpable bull market in gold. If the run up in price over the last couple of years isn't real enough, or the fumbling of the global economy and monetary policy, just look at the 13- and 20-week moving averages... or the decreased selling pressure in the last month. But you have to pick your spots... all gold equities are not created equal. Which is why I like GSS - besides demonstrating a nice buy signal using my system, look at either the 20- and 50-day OR 13- and 20-week moving averages. Real estate - the 'source of the problem' - is starting to attract customers what with the fire sales and all, including me. But I'm afraid that with the scent of buyers returning, the market is going to be flooded with even more homes for sale in the busy summer season, leading to bigger and better deals as sellers try to undercut each other in order to get out at whatever cost. I sincerely hope Americans know better. We shall see, shant we...
Ciao for now.

Phew

HBI took longer than I thought to pan out... with some serious gut checks along the way. Was holding on to the March $5 calls. Value declined by over 70% before I was able to unload them today with the stock briefly above $8.70 for a 40+% gain in the last 2 weeks. BGG has done well, as has BVF which I bought near $10.30...
Have implemented more bullet-points to my protocol before letting it rip, namely multiple tests of support on a weekly basis, as far as my more serious investments go (see the aforementioned BGG over the last 2 years). Eyeing MVL, but I'm in less of a hurry... I'm trying to do better research and pick my spots better with patience and confidence (in the system that is). Wouldn't be surprised if it coasted down to the $22 area before take off.
I believe the market has bottomed... Obama is doing what you'd expect of a dem in the white house with a majority house and senate. A different kind of investing - a new market - is slowly being accepted by investors. We shall see, shant we...
Ciao for now.

Update

In short, made a small profit in HSY and CELG. Long HBI now. Patiently awaiting turnaround at Playboy. Have compiled a list of cheap high yield stocks I want to accumulate:

BGG BVF FHN NI GLP PFE DUK METPRA

I also like HOTT.

It's On

I took $1500 from my yearly bonus to 'recapitalize' my system. Here's what I've done:

Bought HSY March $30 calls for $6 with HSY trading at $35.90
Thursday Close $36.54

Bought CELG February $50 calls for $2.40 with CELG trading at $51.75
Thursday Close $53.30

One Bank Worth Owning

As I've been following stocks for several years now, I've come to realize that not all stocks are created equal. There are as many one hit wonder fads as there are stodgy blue chips that have grown so large that inertia has taken over. Members of either category get the bulk of attention by the talking heads. But I can see, by having done so myself, where you can get attached to a company because time and again prudent decisions are made in an effort to stay viable and reward shareholders.
With this in mind, I want to draw attention to one of my, if not my favorite investment, First Horizon (FHN). I first learned of them when they helped us buy our first home. As the financial tide turned, so did it, plummeting from $40 to $5... and then it bounced to $10... and then it held... for 6-plus months now. They sold their mortgage business and continue to dissociate from the industry. They replaced a cash dividend with a stock dividend in order to continue to reward shareholders. The efforts have paid off since last August, as illustrated in the chart below:


With the financial industry so out of favor, this looks to me like a diamond in the rough.

Speaking of deterioration, FLIR astounds me daily. My analysis says it is getting more and more ready to pop to the upside. Hopefully soon. I may have to buy more to average down.

Will start another round of analysis soon.

GSS Pushes Higher... ABAX too for that matter!

GSS pushed through $1.30, up to $1.57, before retesting $1.30 support. May take days to know for sure as the short term MAs catch up. Exited ABAX after a nice 25% gain in less than a week. Bought PLA at $1.70 based on A) it fits into my system perfectly B) any small gains mean nice percentages and C) somebody can do wonders licensing out those bunny ears - I think their worth more than the $57M market cap. Time will tell.

Gold Bustin' a Move

With the strength I've seen in numerous gold stocks, I pulled the trigger on the junior miner GSS in hopes of a gap up over $1.32 and a subseguent bull run. I still like CEF and JAG; GFI made it's break on strong earnings today. Did grab FLIR Feb $25 calls.

Bullish on FLIR, HAS

Watching Feb $25 calls on FLIR very closely. Also anticipating a bullish move by HAS; GILD, UTX, PCR, ASTE have begun to take off. Expecting a sell-off in gold as a opportunity to move in. CEF, GFI and JAG are my top three favorites.

Shifting Sands

Still watching and waiting for expected sell-offs with CEF and AUY and UTX to match what I'm seeing in the oscillators. Did pick up ABAX today at $14.25. Previously not on my watch list but a very strong buy signal nonetheless. Would have liked to come across it sooner and get an entry at the $13.50 level, but I expect positive reaction with earnings on the 30th. Sold poistion it BABY for a small profit - taking longer than I anticipated while technical strength has deteriorated. Gained almost 10% since buying HLIT yesterday. Now comes the trouble with trading equities versus derivatives: I can't sell until Friday - hopefully the gains will at least hold - wheras calls would settle tomorrow morning.

Buy Signals for Nokia, Viacom

Looking more closely at the stocks mentioned yesterday, NOK below $11.80 and VIA below $16.50 would seem to present extraordinary short term opportunities. NYX has slipped out of favor for the purposes of my system. I expect ASTE to continue to slide in the coming days. I am starting to believe the boat has left the dock with regards to AUY and CEF. Buying on a pull back may be a good option as I see a lot of strength pushing these 2 names higher.

Picks for January 25, 2009

Here are a dozen highly rated stocks per my system:

AMAT ASTE AUY CEF GILD HAS NOK NYX PCR UTX VIA WWW

While I expect a significant move higher over the next 4-6 weeks, I also expect and am cautious of a significant intraday sell-off in the near term producing another deep stochastic trough. With this development I would A) beging to watch the hourly RSI oscillator for a trendline to cross below 50 before B) monitoring the hourly/15 minute Williams' indicator for a trendline to cross through -100. As this event nears I would accumulate more and more aggressively.

I'll try and pick precise entry points as they develop as well as updates of where these equities trade in the coming weeks.

Time To Get Serious

In hopes of building an investment advisory service based on my technical analysis protocol, I thought it prudent, after talking with my wife, to outline my views on risk/reward as it pertains to my system. Risk and reward can can numerous conotations, and in this scenario this is true - on many levels - and paramount to successful trading. I approach each opportunity equally aggressive and conservative. As for risks, is it discretionary income? ie, could I afford to lose it all? Is there enough time before option expiration for appreciation to bear fruit at a slower pace? What is the spread between the option and the current price? How much longer can I wait and how much lower might it go in the interim? ie, will there be a better entry point in the next few days? hours? minutes? In some cases with lower priced stocks, it may be beneficial to buy the stock outright, particularly if there is a high yield or unappreciated disconnect in fair value. It is imperitive to consider an exit strategy should things turn sour. How tight will that stop measure be?
As far as reward, the results should speak for themselves. At one point I was compounding 15% every 3 business days. By continuously studying and trying to learn from my mistakes, it may be possible to outperform these results with better returns on fewer transactions. I recommended HOLX deep-in-the-money calls with a bid/ask of 3/3.5 when the stock was trading at $10.50. Within 2 days the stock was over $13. An easy double.
Of course, 'with the market the way it is', it is harder to believe in the system. Employing concentration, patience, and precision, with a bit of healthy skepticism but an unwaivering confidence in oneself, good things will undoubtedly happen!

I also want to add that whenever I describe my system, someone inevitably says, "Oh, so you're like Lenny Dykstra?"
I believe he looks at larger companies trading within a well defined range, buying deep-in-the-money calls near the low end of the range in anticipation of a move toward the high end. Having looked over countless charts, I look for very specific footprints among technical oscillators foretelling of major upward reversals (who isn't though, right?) I look for stocks being oversold in preparation of monster moves. Imagine if you will a car skidding around a corner - the tires are screeching and pointed in the right direction but the car's momentum is still in the opposite direction... until the wheels start to grip! Many of the best moves - or rather, best periods during which to own a particular stock - demonstrate my events as a precursor.

Please feel free to leave a comment. I'll be making recommendations as they develop.

Just for fun, I'll throw one out there that I came across tonight:
VIA Viacom Class A Voting Shares February $12.50 calls have a Bid/Ask of 4.3/5 with the stock closing at $17.04
How low might they go? I don't know yet, but it just might be worth it on a big down day.

Been Too Long!

Hey Now! Been too long since I rapped at ya, so I thought I'd check in. Well oil collapsed, but it's had no positive effect on the economy. Not many stocks have escaped the calamity so it's been nearly impossible to avoid losses (thank you, NStar!). If Templeton was right, I'd say we're at the beginning of the end. Wading in to invest in strong companies is still hazardous but I think dividend income and reinvestments reward patience at these levels. Companies maintain strength in numerous fashions: ingenious management, pristine balance sheets, technological innovation, growing revenues...

I have numerous stocks that I am watching now and will try and keep you updated on my progress. Success with my methods has been brought about previously with strict rules and patience. Keeping your eye on the ball, licking your lips, and stepping into a big fat meatball... we hope!

Just realize I hadn't been here since April. Needless to say I got in pretty close to the panic bank bottom in July (that day maybe?). I made some terrific gains and put it into coal and natural gas... and promptly gave my money back. Tried to stay afloat but the tides kept sinking. Been studying hard though.