Stock picks and market commentary

Wait a little

2007-12-14T21:13:00.000-08:00

If you too busy with buying gifts for your loved ones, stay busy there. No need to engage in panic buying or selling. Recent market moves are not telling us anything. Lets stay out of the trading tab for a while. It can never hurt.
If you have to buy something, go for Boeing(BA). It is down 20% from top for not much reason.
I remember the old days when market almost always used to go up during January. Now those money managers are very smart. They wait during January nowadays. So should we.
What about those beaten down financial stocks? Let wait until end of January. By then most of the financial earnings should be out. Lehman was not so bad. Let us wait to hear what Merril and City says and we can go from there.
Happy holidays!!!

DOW ready to bolt

2007-12-10T20:33:00.000-08:00

The recent market drop in Nov came as a surprise to many. But the more recent upturn has surprised few. Generally speaking the next 12 months should keep the buuls in charge. 2008 being an eletion year, the statistics really on our side.
In dividual stock? Depends on which way you are leaning. If you think fed will keep cutting rates, go with utilities. DUK, SO are good.
Don't underestimate the Tech. Growing world needs technology. RIMM, CISCO are great. Even AAPL at this lofty price should be unless, if we hit recession that will be a different story.
On Oil I believe the price has topped for now. So putting some money in FedEx get can you 10-15 percent profip in next three months or so.
Happy trading.

Get ready for DOW going up 500 points

2007-10-26T13:20:00.000-07:00

Get ready for a 500 shoot in DOW in next 1 month. Our recent lows have been way above the lows seen in August. In Sept we hit 14300, beating the previous highs. Now we had a higher low we should also hit a higer high. Meaning a 14500 on DOW and 1600 on S&P.
So if you buy 100 shares of DIA (at $138 now), you can surely expect to make $700 in next one month.
Five % increase is not bad at all in one month. Or you could spread your money between APPL, CAT, LMT, MER etc.
What about the oil now. $100 is given now. If you buy XLE or XOM you can most probably make 3-4% on these in next 1 months. But the risks are higher. Buying DIA or SPY is much surer.
What about the Indian or Chinese market. ICICI Bank of India is making a difference. Their ticker is IBN. Check it out.

Bull or Bear market

2007-10-22T21:33:00.000-07:00

Today the market opened with DOW Jones down about 100 points and then ended up about 40. After the carnage on last friday this is a good start.
Remember in bear market after a sharp fall market often open up a little and then looses steam and ends being down at the end of the day. During bull market exactly the opposite happens. That is what we saw today. Rest assured that we are still in bull market. If Oct low for DOW turns out to be 13500 (like today morning) then this is certainly much higher than the August low of 12900 or so. So we see a higher low, another sign of a bull market.
Coming to individual stocks point of view, I think FedEx (FDX) is at a pretty good level around 103, 20% off its high. If UPS can deal with a $90 oil (its stock is only down about 7-8% off its high) so can FDX. I think there is some money to to be made on FDX.

Celebration or what

2007-10-20T08:52:00.000-07:00

Last Friday was the mini repeat of 87 crash. The absolute drop was similar to the drop exactly 20 years back. But this drop is almost inconsequential. Market is not even off five % from the top. Still 1000 points away from the August low. It will be like a bad dream if we go below that in this month or near future. With 4th quarter earnings expected to baloon 10% and election year around the corner, I don't think that will happen.
The earnings from Caterpillar was a surprise. Nobody expected them to be off the estimate. But CAT often does that. Few orders here and there make a big splash on the earnings card. What about 3M, they didn't even miss the estimate and their stock went down 8 % or so. I think market is telling us that we need to look at tech stocks more. It is remarkable the way Google, Apple and RIMM held up pretty well.
From a trading point of view the defense stocks are good defence. LMT is at a good level. If you buy now you can make a good 5 % profit in a month.

Buy Boeing and Barclays

2007-10-17T20:32:00.000-07:00

Last few days market has been going side ways. DOW Jones went below 50 day average for a while and today closed above 50 day MA. I think for rest of the month market will go sideways. After fed's meeting at the end of month and after most of the earnings are out market will resume its upward move. By then people will concentrate on next quarter's earnings which is going to be spectacular.
At this point Barclays (BCS) looks attactive. With this stock you are also playing the currency market since it is based in UK. Don't forget the five plus % devidend it pays.

Another sector to look at are the defense stocks. Boeing has had a bad patch lately due to some delay. AirBus also had similar delays, so that is not a big deal. BA is right now sitting at 50 day moving aveage. Certainly a good buy. Keep an eye on LMT and GD. They are good stocks for trading purpose as well. Right now they are not at a good position for trading, so wait for a while.

Buy Goldman

2007-10-15T20:12:00.000-07:00

Today market corrected a little bit. DOW was down 160 at one point before paring losses to about 110 points. This was expected after big run in last couple of weeks. Main reason cited was that Citi had a sharp decline in their profits. Even though they beat their already lowered estimates. They are trying to reorganize a bit. Wall street smells something fishy at that. I personally think this company will be just fine. This is a company that has made many people rich including Warren Bufett and Alwaleed Bin Talal. This stock also has a good yield (it is the amount of dividend you get for investing 100 dollars in the stock) as well - more than 4.5%. But don't buy the stock yet. You may be able to pick it up around 41-42 in next one month. If the market goes down 2-3% more (frankly I don't think market will not go down anymore, all the corrections has already taken place in August) just go and buy Goldman. This company is made of smart peopple. Subprime did not hurt them because they were intelligent enough to hedge their bets.
Want more picks? How about Caterpillar. It is slightly below its 13 day EMA. 50 day maving agerage is about 77. If you can get it there, its a deal.

Time to make some money

2007-10-10T21:15:00.000-07:00

This is a time to make some money in the stock market. All major market indices are making new highs every week. Some people argue that the volume is not there. It is not unusual to see new highs for months with low volume. Volume is more typically high when it goes down.
Some argue that small stock index Russel 200 and transport are off its highs. Well, that is typical in an aging bull market. When we see growth stocks like Google and RIMM hit new highs then certainly people are betting money that economy will continue to grow. This is confirmed by new highs in stocks like Amazon(AMZN) and Priceline(PCLN). You can certainly make money from these stocks. But don't put too much money on them. Determine how much money you can afford to loose. Multiply that by four and invest that much money. Set your loss cutting point to be 25%.

Overbought is good

2007-10-08T20:12:00.000-07:00

Last couple of weeks the market is staying at overbought level. Overabought levels are generally time to sell. But like everything in the world there are exceptions. When the market is strong and remains overbought for extended time period it is an indication of a bull market. I believe we are in that period right now. When we see stocks like Google, Apple and RIMM hitting or near all time high that is a time to get excited. But be careful, these stocks can bring a lot of pain as well. I put no more than ten percent of my total capital on all these stocks together.

Like me if you are into ETFs, DIA is a great stock for trading. If it falls to its current 13 day EMA of 139 I would buy it. Same for UTX, if it goes below 80 it is a good spot to buy.
Other stock to buy are CAT and Alcoa (AA). With the world economy getting stronger every day their profits will grow every quarter.
Happy trading.

Happy October

2007-10-02T20:02:00.000-07:00

Who bought stocks during August and Sept are pretty happy now. Oct starting with a record in DOW index. NASDAQ at a six year high. What more could we ask for. Only thing to see is whether fed cut another 25 basis points or not. They should since credit crunch is high on their list. On that note Alcoa, International paper and all other industrials are gaining. Check out UTX and CAT as well.
Whoever bought Goldman in last two is happy now. It is not too late to buy Barclay (BCS) or Merril Lynch (MER). Their stocks are crossing the 50 day EMA, a good time to get in.

Market breakout

2007-09-13T16:33:00.000-07:00

It is almost music to the eye to see Dow Jones close above 13400. Last one month it has been dancing between the pillars marked 13100 and 13400. Crude again hit $80 per barrel today. We see CEO after CEO come to TV and their business is strong. MacDonald and GM are going guns. McDonald is going to do better and better in this global booming market. If you have this recession bug in your mind then this is definitely your stock to own.
S & P (as well as other indices) are showing higher lows even though it went below 200 day moving average a few times. But DOW bounced off the 200 day MA like a tenis ball off Roger Federer's racket. These signs are good. But lets not forget that October is coming. Also nobody is sure what Mr. Bernanke will do on 18th. Quarter point decline or steady. I think this rate decision does not have a lot to do to the market. From 2001 to 2002 feds decreased the rate about four points and we all know what happened to the market during that time. I am more concerned about rate going down, dollar going down further and this humongas trade deficit going higher and higher.
I only hope the rate cut will create more happy faces in the country. This rate cut will also bring opportunities in terms stock picks. How about getting back into those home builders. Toll bros. and Pulte may be a good start. Energy stocks do good as well. DUK or CONSTELLATION energy. Who can forget those giant profits that Exon and Chevrons of this make. With crude at $80 just guess where those profits are going.
Happy trading and more later.

13100 is a wall for DOW

2007-09-11T23:04:00.000-07:00

As we have said before market will take a holy dip in August and come back up like a good mommy's boy. We saw DOW touch almost 12500 and S&P 1400 sometime in August. Now they are at 13400 and 1470. Great comeback inspite of that lousy job report last Friday. Am I going to loose my job now or what.
Earnings has started to tricle in. This Thursday Goldman is up. This is a great company. This company is run by some very talented people. Since majority of their income comes from trading, I don't see why it should take a sudden plunge. The stock has been creeping higher. Keep watching. Merril or Bank of America may be a good sympathy player.
Same day FedEx is also coming up. Will be a good buy post earnings.

Another good buy is Texas Instruments. In light of Intel's spectacular results TXN is a good sympathy buy. The chart looks terrible. But it has a long time to play catch considering its earnings are coming in late Oct.
Happy trading.

S&P at 1600?

2007-08-10T19:03:00.000-07:00

This week has been very volatile and such wash. Last Friday we saw DOW fall below 13200. Same thing today. Only difference is market is higher this Friday than last Friday. Not by much, still it is something to cherish for.
I heard Aby cohen said S&P will hit 1600 hundred sometime this year. 1,555.90 has been the high. 45 points from there. My opinion? Just add 100 points. We will hit 1700 on S&P by March, 2008. That is my prediction.
Let us now come back to this market correction that is happening right now. In 80s and 90s market used to go down in October. Now people are smart they sell off in August and Stay on the sideline in October. The result? We have a healthy correction in August and a pickup in Oct. Want be ahead of the herd? Sell of in May. Come back in August. You can make a ton. I could barely believe Goldman was trading at 175 something. Hey, that company is so solid. Couple of funds going under wont affect them.
S&P finished at 1453 today. Before Oscar like drama of this week it touched 1440. To me that is a great sign. May be we have found the bottom here, may be not. But I do think DOW most likely wont go below 12800 for now, this year.

Picks: Wachovia (wb) and Barclay (bcs).

DOW might falls another 400

2007-08-04T22:17:00.000-07:00

Hello everyone. Market is very scary right now. A drop of 800 points can bring on a lot of pain. Especially if you bought when DOW was at 14000 and S&P 1550. But even a 800 point drop on DOW and 120 point drop on S&P from the top represents a 6 and 8 % drop respectively. A normal correction. Nothing out of the ordinary. Remember March. Ok, most wont even remember July or June. But in March we had a 600 points and things felt like falling apart. But everything came back, rebounded and forgotten.

During eighties and nineties market used to have a bad span during October. Nowadays people are smarter. They sell off in August or September. With a lot of cash they wait for a crash in October. The result, market goes down in August or September and starts to come back around October and Noverber. If it is an election year (remember every alternate year is an election year) our pundits at CNBC and elsewhere can declare that after election things have cleared out and that is why market is going up. Lets change the law to have election for Congress done every four years. That way we will spend less money and also Congress can get something important done rather than just campaign all the time. But that is another blog in another site.

Now, let me give my opinion. On last Friday we saw a new low in both S&P and DOW. It was slightly lower that the low of couple of days back. So I think we will see this market go down at least 1 or 2 percent more. This Bear Stern problem is not true about most other financial stocks let alone the whole market. Market is going down mostly because of the reason I stated above.

I would say wait another two three weeks and start buying. Now lets talk about particular stock picks. A friend of mine was saying that he thinks he would be better off buying some CDs. I got a better idea. How about putting some money in Citi group and Pfizer. Both has a yield of more than four percent. Both are sitting close to their 52 weeks lows. One last thing, both has stong business business fundamentals.
Stock picks: C, PFE and SPY.

Commentary

2007-07-11T20:38:00.000-07:00

This earning season is not very exciting. DOW might have topped out at 13600 for now.
I think month of August is going to be choppy. Nowadays August does what October used to do to market ten years back. Today's Oct showers the market with new highs like January used to.
So I am going to stay 50% in cash and put some money in Goldman. Goldman is not going to drown in subprime deluge.

Watch out for GE, its earning is coming up this friday.
Same for Intel, next Monday.

Today's pic : glng

This market goin higher

2007-06-27T19:45:00.000-07:00

Ok, we have had a week great war between bulls and bears. And the bulls have won. DOW remarkably held on around 13300. At 13400 it is still a good buy.
Look for Google to touch 560, BA 100 and DOW at least 13800 in next one month.
Bear stern is also a good buy, but be careful there.
Happy trading.

Picks for 6/7/07

2007-06-07T14:59:00.000-07:00

The prices are in my range now. Market prices are about 3 % off from the high. In a strong bull market 2-3 % correction is comm0n. It wont be surprising if it goes down another 2 %. None the less it is a good time to buy. Rising bond yields and hawkish comments from Bill Gross brought the market down by almost 2%. Next month earnings will start coming in. Earnings will be good. Only scary thing is there are three more weeks left in this month.

Picks: IBM, BA, GOOG, GS, WMT

Disclaimer - trade at your own risk

2007-06-06T11:20:00.000-07:00

All the stock picks posted on this web site are recommendations only. You should weigh your own risk and reward. We are not responsible for any loss or profit from a stock trade.

Update for June 6, 07

2007-06-06T10:38:00.000-07:00

Just like I thought DOW corrected about 2% as of now. This can be a good time to buy. But you might get a better opportunity tomorrow. I think the long term bull market is still intact. This is just a correction that can and should be taken advantage of if you have some spare cash. Right now IBM and Boeing are at good level. Google seems ready to go to 550, but be careful not to put too much money on that one.

Picks: IBM, BA, GOOG, GS, WMT

Two day rule

2007-05-29T10:22:00.000-07:00

It is my gut feeling that DOW has topped for now around 13600. Today it crossed 13550 and fell back. Last week it touched around 13450 before going up. I think it will correct 2-3% here. I sold my DIA holding (that I purchased last week) today. I am going to wait two days before doing anything unless I see a 150 points drop. In two days we will know which way it goes. If it crosses 13600, it is going to 14000. If it goes below 13400, it is going to 13000. Simple.

Picks for 5/24/2007

2007-05-24T08:14:00.000-07:00

Yesterday market went up and then gave it up. Today again it did the same. Within next 4-5 days I am sure market will correct 2-3 percent or may be more. So just wait a few days for a better price. On a pull back I would buy LMT and BA. LMT went down 5% the other day and now it is backing up. I don't see the other defense stocks correting at all. I think LMT will give a nice profit. About BA I think it is going to cross 100 and may be hit 110 in a month just like what AAPL and IBM did.
Picks:
LMT
BA

May 17, 2007 Picks

2007-05-17T13:23:00.000-07:00

CTSH
QQQQ
DIA

Picks for 5/15

2007-05-15T08:19:00.001-07:00

AAPL
BA
QQQQ

Update for 5/2

2007-05-02T19:30:00.000-07:00

What a day. DOW made another record. Only thing I am watching for right now is when S & P hits a record high. Should be sometime in May. Be careful tomorrow. Dow lost about 50 points from the high late day. Tomorrow morning DOW could lose another 30-40 point and then it may close higher. I don't think market is going to make any big move either way tomorrow because all will be waiting the all important job data on Friday. Buy Cisco on any pull back.

Stock market Update for week ending 4/29

2007-04-28T14:33:00.000-07:00

Market seems to be going going going. No sign to let up. Dow almost went up in straight line from 12600 to 13100 level. Nobody thought it can do this a month back when it was strugling like a fish out of water at 12100 points. Ok, now where does it go?

Last week I thought it will fall to 12800 before crossing 13000. But it didn't. It went down 30-40 points only to 12910 or so before going to 13100. That tells me this market is very stong right now. Especially when DOW, S & P and NASDAQ are all making 52 week high together. There is no doubt this market has legs of its own. I think next two months DOW can go another 500 points or so. NASDAQ should touch down around 2700 soon with bombshell earnings like Amazon and Apple.

Net Friday job report is coming up. Watch out. I think some time next week DOW could shed 100 points or so and touch around 13000.

Buy: APPL, SPY.