Off to Hawaii!

I am off to Hawaii so I will be away from the blog over the next two weeks although I know my timeshare has wireless internet and the laptop is going so we will see what happens!

I have updated some past market articles I wrote in 2005 and 2006 so I will look to quickly upload them over the next two weeks.

Aloha!

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Flying to Hawaii on Continental (CAL)

My Hawaii Stock
Continental Airlines Inc.
Monday’s Intra-day Price: CAL – $40.23

I wanted to research a Hawaii based company prior to leaving for my trip tomorrow but all I found was junk (in my opinion of course). So, instead of wasting my time, I decided to research my airline but must note that I don’t invest in this industry group due to multiple reasons that may be obvious to some. No need for a disclosure because I don’t own shares or plan to own shares in Continental Airlines or any of their competitors.

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It’s the best I can do with the limited selection of Hawaiian companies that trade publicly. Here are a few I found but none of them were interesting to me:
ALEX, BRN, HA, HE, MLP, BOH

Next Earnings Date: 4/19/07
Sector: Industrials
Industry: Airlines

Analyst Stat: S&P has a 12-month target of $65 with a strong buy rating (5 stars)

Institutional Analysis:
Held by Institutions: 95%
Money Market: 286
Mutual Fund: 416
Other: 13

Top Holder: Capital Research and Management Company
4.65 mil Shares for < 0.01% of Portfolio Total Equity Value of Portfolio: $574.0 billion Other Major Institutional Holders: AXA, 4.40 mil shares Barclays Global Investors UK Holdings Ltd, 4.34 mil shares Seminole Management Company, Inc., 4.3 mil shares Atalanta/Aosnoff Capital LLC, 3.2 mil shares JP Morgan Chase & Company, 3.01 mil shares BlackRock Group Limited, 2.5 mil shares [Read more…]

Stock Blog Trading Contest

I was scheduled to participate in a stock trading contest with several market blogs but I withdrew at the last minute due to my trip to Hawaii the next two weeks.

However, I invite anyone that is interested to head on over to
Blain’s Stock Trading 101 to enter.

Blain has also invited several other blogs to participate so you can also join at their sites:

What is the contest about?
This is a blog competition so enter your picks on the blog of your choice to allow that community to win.

To join, simply pick a stock that you think will increase the most next week ALONG WITH the predicted NASDAQ closing price on Friday April 13, 2007. Leave your answers in the comments of Blain’s post or another blog, and they will be tracked at Stock Trading 101.

There are 3 ways to win, you can have the best performing stock pick, the closest NASDAQ closing price, or the best overall community average (all of our community picks avg’d together). Know though your entry must be submitted by Sunday April 8th at 8:59 PM EST, no exceptions! Blain will go around and make a massive spreadsheet and get the first update up, so get those picks in today!

The Details

  • The contest runs from Monday the 9th – Friday the 13th
  • To enter simply submit via comment ONE stock pick (ticker), and what you think the Nasdaq will close at on Friday the 13th. All stock picks must be over $1 and can’t be pink sheets!
  • All Entries must be in by Sunday April 8th, 8:59 PM EST
  • It is one community versus the others (listed above), so you can’t submit entries on two communities, pick a side and support the fight!
  • Three ways to win, top stock pick, closest Nasdaq close, or best overall community pick average.

Keep in mind: This is a short term contest so members from this community should target stocks that look ready to breakout or may have a major catalyst this week (such as earnings announcement, new product, new CEO, buyout, etc…). Good Luck

How to Create a Successful Stock Watch List

Follow these steps and you can create a powerful stock watch list in the matter of minutes to an hour each night. I work longer than that but it can be done in less time if need be. This watch list will generate opportunities for trend buying, swing trading and even shorter-term trading. I guess the occasional buy and hold investor could even benefit from this very simple procedure if they purchase at the right time.

I encourage all investors in all time frames to evaluate stocks for investment using both fundamental and technical analysis. A day trader and even a swing trader can get away with avoiding fundamental analysis but I highly recommend both methods of analysis for intermediate and longer term trend traders. Both tools are equally important in making serious decisions with your hard earned CASH!

If you wish to invest in stocks, treat it like a business, NOT A HOBBY. You need rules and you need to follow these rules or money WILL be LOST. Once proven rules have been established, they cannot be broke or you will lose money. Everyone loses money in investing but we must learn to cut losses quick and allow gains to develop. Small losses are acceptable because they teach us lessons that allow us to win big. Think of losses as part of doing business and focus on the long term success of the system and not each individual trade. As long as you have a positive expectancy, the winners and losers will equal out over time to make you consistently profitable.

Now to the watch list method:

  • Determine if overall market is in a specific trend (up, down or sideways).
  • Use a computerized screener to find stocks with superior fundamentals
  • Evaluate sister stocks or stocks within the same industry group (strength travels in groups so the probability of success rises when buying into a strong industry).
  • Study the technical aspects of the charts for each possible opportunity

Simple Fundamental Screener Criteria:
The criteria listed in this section can be used together or arranged in a variety of ways to generate multiple lists containing all possible opportunities. Get a feel for specific screens and determine which are the most successful during certain market conditions.

  • Increasing Earnings (current, past: quarterly, yearly and future estimates)
  • Increasing Sales (current, past: quarterly, yearly and future estimates)
  • Stocks making New Highs
  • Stocks within 15% of New Highs
  • Stocks within 10% of the 200-day moving average
  • Increasing Return on Equity (ROE)
  • Price/Earnings Growth (PEG) – Less than 1 is preferable
  • Accumulation/Distribution ratio
  • Up/Down Volume over past several months
  • Increasing Institutional Sponsorship

Simple Technical Analysis Scans (with your own eyes):

  • Study the one year weekly chart (preferably candlesticks)
  • Study the six month daily chart (preferably candlesticks)
  • Look for increasing accumulation days (stock up on above average volume)
  • Evaluate the Point & Figure chart for support and resistance levels
  • Look for basic chart patterns such as flat bases, cup bases, saucer bases, triangle breakouts, obvious trends along a moving average, etc…

That is all one needs to develop a quality list of opportunities night in and night out. Trading opportunities will appear once you see a particular stock make multiple screens on a consistent basis. This is the basic foundation I use to pinpoint my opportunities in the market and the general guidelines I used while running MSW.

I use the custom screen wizard from Daily Graphs (Investor’s Business Daily sister company) for my fundamental analysis because I love young growth stocks but many tools exist on the web. Some are free and some cost a pretty penny to use. My screener costs $45 per month which is nothing to me but maybe too much for others.

Please leave a comment on what screener you use and why. Leave a link to the screener that you use to give the site or business credit. I am very curious to hear what other trader use. As great as the wizard is for me, I am always looking to find something better.

NMX Trading Decision: Shares or Options

Options Trade
Nymex Holdings Inc.
Wednesday’s Intra-day Price: NMX – $131.73

I have been blogging about NMX for several months (since December 2006) and have owned shares in the past but sold prematurely in March. I recently wrote about an accumulation area near $130 and the stock is currently trading within that area.

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However, I am not in a rush to establish any positions before my trip to Hawaii next week. I will have internet access but I don’t want to be on the computer or making any trades while on vacation so my hands are tied for two weeks. I want the stock but I would prefer a lower entry although it is not extremely important because the trade is long term.

Dealing with possibilities; NMX could make a 50% run over the next year based on institutional accumulation and the success of sister stocks such as CME, BOT & ICE. I am not in the business of predictions so I can’t tell you if NMX will follow suit.

So, instead of buying a lot of 100 shares for $13k, I am thinking about buying one January 08 call option (leverage my money for less exposure). Many of you already know that I am not the best investor when it comes to options as I have not had much success (compared to trading). Aside from one superstar options trade in Tenaris (TS), I tend to stick with buying and selling equities based on track records.

I am looking to place a market order for 1 Jan 08 call option with a current ask of $12.20 or $1,220 (for control of 100 shares). I am also thinking about placing a market order to buy this same call with one contingent: the actual asking price must be trading lower than $125 (good til cancelled) while I go on my trip. It’s not much of a difference so I may just place the trade after posting this entry but a further correction is also a possibility (down towards $122-125). I don’t want to place the order with the contingent of $125 and have the trade miss the trigger while I am away and then make a run. That would really piss me off (especially if the ask came as low at $125.15 or so).

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What do you think? What would you do? I am very curious to hear your opinions (don’t worry, it won’t affect my final decision as my mind is already made up).

[Read more…]