Investing Systems Research Lab – Members Update March 6th, 2010
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Welcome Back Members…it was quite the interesting week. I hope you joined us for the Live Broadcasts at the market open.
This morning we discussed GMO (General Moly) shortly after the open (along with other picks that did quite well).
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Wow. All it takes is one of these to make your day. As you know this is fairly typical of the Low Priced scan.
For those of you more interested in our swing-trades, let’s take a quick review of the Trade Plans from February:
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Not too shabby, I must say. Log into the Research Lab to see the detailed Trade Plan Charts on these.
You can also read back several posts on this blog to see some of the set-ups.
We still have one Open Plan from Feb, TLAB which hit Target 2 today. When it finally closes it will go into Feb stats.
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Notice the secondary entry on the trendline break for anyone that missed the initial entry.
Now that TLAB has hit Target 2, the stop has been raised to the Entry price of $6.80, with the idea that most of the profits have already been taken. Originally we suggested selling 1/2 at Target 1, which hit two days after the entry as you see on the chart above.
We like to show you a different perspective on our trades in this blog where we have more flexibility with the charts. The Live Trade Plan Charts don’t always show the bigger picture.
Here is a great example:
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This trade is on the Waiting Trade Plans page from yesterday and we will probably give it another couple sessions to see if it fills. Remember, Waiting trades only fill if they hit the exact Entry price.
By the way, this Blog is intended for Investing Systems Research Lab Members only. If you are a guest and have taken any of these trades, please show your appreciation and get your Trading Karma straight by supporting our Research Lab with at least the $100 “ala carte” months membership.
http://www.the-market-toolbox.com/join.html
With the daily stock picks and the Trade Plans we are quite confident that you want to be “on the inside”, even with the nominal fee for admission.
I am hesitant to post any of the trades we are watching for next week as they have not been loaded in the Trade Plans yet. They are simply ideas and will require more analysis.
Also, our system has not run the main updates to find next weeks trades, so these are just to show you for fun. Call it some “stocks to watch”.
CYTX – Keep a close eye for a break-out above the green line and into the yellow ellipse.
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This seems like a fairly risky stock, and perhaps we are a bit premature, but then again…
I would almost prefer another week of consolidation and then a break above the green horizontal line.
I will throw in one more on the watchlist, but this is not going to be a Trade Plan next week as I am certain we will find much higher probability set-ups.
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MSPD was the first Trade Plan of the year in 2010. Notice the green arrow and ellipse at the bottom left of the chart indicating the Entry.
It is still on the watchlist but we think perhaps we will get a better entry on this down the road and not necessarily next week.
You want a speculative stock? Sure, why not.
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The chart tells it all. We want to watch this stock as it moves toward the inevitable apex of the triangle. If and when it breaks out to the upside through the green trendline, we consider that a good speculative entry. The stop loss would be placed at the red line, say $1.70. If the stock fell below the red line before it exceeds the green line, then the trade is “no bien” and discarded in the heap of ones that didn’t “behave”.
As a value-added service for our Members I thought I would share some interesting information I stumbled across.
Below you will find Goldman Sachs’ VIP List with the name of the stock followed by the number of hedge funds that own that stock in their top ten holdings.
- Apple (AAPL): 67 hedge funds hold it as a top ten holding
- Pfizer (PFE): 45
- Bank of America (BAC): 37
- Google (GOOG): 37
- JPMorgan Chase (JPM): 36
- Microsoft (MSFT): 36
- Mastercard (MA): 29
- DirecTV (DTV): 27
- Wells Fargo (WFC): 27
- CVS Caremark (CVS): 24
- Citigroup (C): 23
- Hewlett Packard (HPQ): 23
- Monsanto (MON): 23
- Visa (V): 23
- Cisco Systems (CSCO): 21
- Walmart (WMT): 21
- Oracle (ORCL): 18
- Qualcomm (QCOM): 18
- Exxon Mobil (XOM): 18
- Ebay (EBAY): 17
- Wellpoint (WLP): 17
- Intel (INTC): 16
- Mead Johnson Nutrition (MJN): 16
- Merck (MRK): 16
- Johnson & Johnson (JNJ): 15
- Liberty Media (LSTZA): 15
- Amazon (AMZN): 14
- Apache (APA): 14
- EMC (EMC): 14
- Express Scripts (ESRX): 14
- Ford Motor (F): 14
- IBM (IBM): 14
- Lear (LEA): 14
- Teva Pharmaceutical (TEVA): 14
- Yahoo (YHOO): 14
- Crown Castle (CCI): 13
- McDonald’s (MCD): 13
- Transocean (RIG): 13
- Barrick Gold (ABX): 12
- SBA Communications (SBAC): 12
- US Bancorp (USB): 12
- Anadarko Petroleum (APC): 11
- Berkshire Hathaway (BRK.B): 11
- Philip Morris International (PM): 11
- Transdigm Group (TDG): 11
- Target (TGT): 11
- Thermo Fisher Scientific (TMO): 11
- American Tower (AMT): 10
- Comcast (CMCSA): 10
- Freeport McMoran (FCX): 10
Of the stocks mentioned, there are a handful that are brand new additions to Goldman’s VIP list. This means that enough hedge funds have brought their stakes in the company up to a top 10 position in their respective portfolios. Positions that hedgies added largely to in the fourth quarter include: Wells Fargo (WFC), Mead Johnson (MJN), Merck (MRK), Liberty Media (LSTZA), Amazon (AMZN), Apache (APA), IBM (IBM), Lear (LEA), Crown Castle (CCI), SBA Communications (SBAC), US Bancorp (USB), Anadarko Petroleum (APC), Target (TGT), American Tower (AMT), and Freeport McMoran (FCX).
Read more: http://www.marketfolly.com/2010/03/goldman-sachs-vip-list-most-important.html#ixzz0hMn4oajm
Lastly, I wanted to demonstrate the value of the Earnings Scan with a Widget View from today.
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The Widgets are excellent in that they show the Top-10 picks form each scan in real-time each day along with live 15-minute charts.
The Earnings list consists of stocks that have released in the past 3 days that are making a significant move from the Open. If you get a chance pull up the chart on these so you can see how they did today and over the past few days. You will want to see the move in SXCI yesterday where it went from 52 to 60. Then it was a pick again today at 58.92 and closed at 62, wow. Shows you what an earnings release can do.
Ok, so next week we will do another “big picture” look at the overall market. As you know, the past three weeks we have been quite constructive on the market as the S&P managed to close above the 30-week moving average and the 10-week is still above the 30-week (see prior posts).
So that’s it folks. Enjoy your weekend and I hope you locked in a bunch of profits last week because we are very likely to turn negative in the short-term. The market is quite overbought at this point. Next week will be very tricky so be sure to join us in the Live Broadcast Monday morning.
If you are not a Member of Investing Systems research Lab please click the logo below and show your support by joining.
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Investing Systems Research Lab Trade Plan Recap and Market Analysis
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Welcome Members. Last week several Trade Plans were closed as winners.
IPXL was probably the most impressive with a huge move on Thursday that surpassed Target 3. The Entry and Target 3 are shown on the chart below.
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WTNY hit target 3 on Wednesday as shown on the chart and was closed right near the high…how sweet is that?
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CSE only managed to hit Target 2, then retraced back to the Breakeven stop at Entry.
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We still have one Open Trade, TLAB, which has hit Target 1 and actually in a pretty good spot going into next week.
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The Entry and Target 1 are indicated on the chart above, along with the Breakeven Stop.
Log into the Research Lab for complete details and updates on Waiting and Open trades.
As we head into March, let’s take a look at the overall market to see where we are and what we can expect.
Here is a Monthly chart of SPY.
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Notice the market is sandwiched right between the 10-month and 30-month moving averages. You can also see the current channel and interestingly enough the uptrend line and 10-month ended Feb at almost exactly the same point. That is the major support to watch.
Let’s zoom in to the Weekly chart.
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While we had a couple close calls earlier in Feb where the SPY moved below the 30-week moving average, it managed to close above it both times.
You can see the current channel and we consider the bottom uptrend to be the major support as we go forward. If the market can remain above the 30-week MA and inside the channel, we will remain constructive and it will make it a lot easier for us to trade to the long side.
If the market is getting ready for a move lower or even a tumble we will know by watching for the following.
- A close below the 30-Week Moving Average
- A break of the price below the uptrend line that forms the bottom of the channel
- The 10-Week Moving average crossing below the 30-Week Moving Average.
If we see any of these occur we will expect the market to move into the red shaded area, which will put us on the major defensive.
We will keep you updated in the Live Broadcasts in the Research Lab as well as on the Wednesday and Sunday evening shows.
Regardless of what the overall market does, we can make money trading stocks.
Obviously we prefer to trade to the long side in an up market, however we have ways to take advantage when and if the market turns down. We will be discussing this in the Live Broadcasts so please joins us.
Lastly, we have a special situation stock to bring to your attention, BBEP.
We came very close to loading this into the system as a Trade Plan for Friday, but decided to present it here on the Blog as a “stock to watch”.
We will also be discussing this stock and our “special strategy” on this Wednesday’s show.
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BBEP is a MLP (Master Limited Partnership). It is an oil and gas royalty trust.
We like the chart and have indicated in the shaded ellipse the area we like as a buy zone.
The red line indicates the stop-loss.
BBEP announced its intention to reinstate quarterly cash distributions at the rate of $0.375 per quarter, or $1.50 on an annualized basis, beginning with the first quarter 2010 distribution. The Partnership intends to pay this distribution on or before May 15, 2010. This is roughly a 10% yield at the current price, however we have some tricks up our sleeve that we will share with members on the show. Essentially we intend to use our scale-in and scale out technique to bag some “low-cost” shares that can be held as an “investment”.
Haha! Imagine that, us dealing with anything so far-fetched as an “investment”.
Of course we are NOT recommending you just buy this as an investment. We are saying that we like the chart. We have a stop-loss point. And, we have a strategy to trade the stock with the goal of bagging some low-cost shares. We can then adjust the stop for a no-lose investment.
Members have noticed notes recently on some of the Trade Plans that say “no-lose” trade. This is the result of proper trade management and moving of stops to breakeven.
We will answer any questions and cover all this in more detail on the broadcasts and on the shows.
That’s all for this week folks. We will see you at the opening bell in the Research Lab.
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