Sunday, February 26, 2012

concise look at $CL_F $ES_F long term

Welcome back everyone; it has been a couple of weeks so let’s begin with a recap:

-Markets have continued the slow grind up on rumors and proposed deals to keep Greece afloat one more day. This is beginning to seem like a new norm.
-Friday was a new almost 4 year closing high for the S&P tracking back to before 2008 crisis
-Last post indicated 1,350 S&P resistance, tested 2x after that with a 3rd breach and close above. S&P has not broken below 1,350 since and looks to be new short term support.
-New resistance level 1,373 as shown below, lining up with levels last seen in June ‘08.

The pic above shows my 1,400 long-term resistance level. Notice a pattern taking place from ’08 where we see 200pt run up off of a 5-10% correction. I have 1,400 pinned seeing that it would make a near 200pt up move since we last saw a rather large down move. 1,400 could see some selling pressure and could push us back down to 1,330-50 area pretty quick.

Oil has become a hot topic as of recent. This past week we saw some huge up moves in WTI nearing last springs highs of 110. I am long crude, but a straight up move like this so quick believes me into thinking we could see a bit of profit taking back down to possibly below 105. Get ready to be paying $4 or more at the pump soon. Hybrid cars?  Toyota? Possibly.

Above CL_F Weekly chart rather large bids coming in this past week, pattern looks to continue if we can breach 110 and hold above. Notice 114 is last year’s high and 80 is support.

Above CL_F Monthly looking back about 10 years, notice pattern in 2005-06 when we saw pattern of a top, profit taking then, continued up again, seems like the pattern we are seeing this past year.

Looking at my portfolio so far, relatively no change since my last post, Earnings for DryShips came out and reported a loss, though their oil drilling division showed signs of strength. The stock initially sold off down to the 3.09 level, a bit overdone I believe on my part. Just to save some of my profits, I put a 3.00 stop in, thankfully it did not kick in and the shares shot up to 3.80 intraday. Still holding long-term. Still holding RadioShak after the earnings report, shares are currently below the 7.30 level where I bought them, will look to sell out of all my position at 1st breach of 7.00.

Having off from school this week for mid-term break, I will be at the charts and on twitter @peter_eller10 pretty much all day, many names I am looking at including $FDP and $DAR (big food bull, see post on $BG last year). Catch you all next week.

Sunday, February 12, 2012

1,350 big resistance, w/ some analysis and trades

Welcome back everyone; hope you all had a great last two weeks of trading. It very much does appear like we are out of the woods with indexes nearing the highs we have seen last year. Since I wrote last, we have seen the index’s gain again on hope of deals everywhere. Same pattern now for roughly four weeks, sell in the pre-markets and morning cash open, then fill the gap up on the day to go unchanged or positive. We saw a break of that pattern on Friday where we were down roughly 1% the whole day, though closed off of the lows. To be completely honest, we have seen quite the explode up since the beginning of the year and 1,350 was huge resistance to test. The picture below of the S&P 500 1 year chart shows how 1,350 has proven to be huge resistance.

Notice how in one year’s time, no matter what the news events were, we closed above for a day or two, then corrected 5-10% in some instances. I am anticipating a correction this week, but if we can get a rally going Monday, hold 1,350 for 3 or more days, bullish momentum could continue toward 1,400. The stock market and economy are 2 different beasts, remember that.

I made a couple of new positions since I last wrote. After the guidance cut at RadioShack, I decided that it looked attractive to step in for a small position, on a fundamental basis. At 700M mkt cap, it is definitely a takeout target for private equity, and they are pretty liquid, enough current assets to pay off 90% of all debt. My opinion is yes the business is dying but I think investors really hammered this one pretty good on the guidance cut. I am keeping a close eye on levels and seeing if I can get a close and hold above 8.00. So far it is up 6.5% since hitting its all-time low last week of 7.15.

Above RSH and slight recovery after guidance cut.

I ended up not selling THQ when the report came out an got hurt pretty bad. There was a 25% initial drop in the shares to near 50 cents (half of my position lost) after the report. Still hanging on to this, though delving more deeper into it, looks to be in pretty rough shape. They have some notes due soon, and with net losses + a dwindling cash pile, this could spell disaster for them. But could there be an acquisition by ATVI or ERTS?

Above THQI after the quarterly report,

My best trade last week goes to DryShips. I bought this back in mid-December on hopes of a global shipping recovery, 2.00 just looked all too good for me to put some new cash to work. Unfortunately since then the Baltic Dry Index has tanked, but the stock has flatlined. Just last week the company announced Ocean Rig has a revenue backlog of 653M. This is great news for DryShips seeing as they own a majority of this driller. That contract is good for 3 years. I am still holding this name and watching the 3.00 level which is where it closed at on Friday. About 100 dollars was made on paper for that trade and has given me a slight confidence boost form all of the losses I have incurred these past few months.

Above DRYS and big move up after that announcement.

This week I have a couple trades to look at, just my opinion and probably will not put any to work this week. Wednesday we hear how Dean Foods is doing. This company is a disaster waiting to happen. Last time they reported, they had a huge drop in Assets and negative Shareholders equity, coupled with mounds of debt. This would also be the 5th net loss in a row, after a monster billion dollar net loss in the last earnings statement. The chart looks very sick and I expect another loss from Dean as competitors continue to take market share away from them. Until we see some growth and profits coming from the company, this could be the next bankruptcy target, I would stay away.

Above DF not looking so hot in the recent years, this is what happens when a company continually churns out huge net losses.

Much earlier, back last July when I started the blog, my first pick for long term growth and dividends was Waste Management. You can see my thoughts here-> Looking now 6 or so months later, it is up roughly 10% while maintaining a hefty dividend. I still think that this stock has more room to the upside. The last two reports were solid with profits up 10%, while cutting costs. It does appear that they have the assets to finance debt also. Consumers will continue to generate trash and recycle goods, so for long term growth, this is definitely your best bet. They report earnings on Thursday.

Above WM and move up since I last mentioned it looked attractive long-term.

That’s all I got this week, catch me on twitter @peter_eller10 have a good week all.