Friday, April 3, 2009

A More Normal Market

I think we are seeing more normal market action even in the face of some bad unemployment numbers. Even though the market is hitting strong resistance, it is wanting desperately to break through and run. Those of you that took my little "elbow in the side" and took some CENX have most likely seen returns in excess of 50 percent. With a book value close to 20 dollars a share and rumors floating everywhere, we will see a large run up to earnings, unless the rumors pops open to truth before then, in which case we will see 6 dollars out of this pretty fast.
That's the life of speculation ; you win big some of the time, and loose your donkey other times. This time, however, I believe my donkey is coming home to stay. Next time I'll keep him chained right on to me.

Have a good one,
Roger

Sunday, March 29, 2009

Anatomy of a Stock Pick


I decided after the recent pullback to look at the last couple of day's SA picks to look for a good Monday winner should the bull run resume. I analyzed AFK, CELG, STZ, DF, GILD, MKC, SMTC, and SRCL. I quickly applied the oversold rule, looking for stock whose %K was less than 30. This left me with Dean Foods, and McCormick. I looked at their yahoo finance pages to see if their was any recent news that might help or hurt. I saw a downgrade on DF and several new ratings on MKC, all good. I the broke out my Amibroker with the pattern explorer plug in to look at the Schaff Trend Cycle, ADX, Patterns,Taio, and volume vs. 50 day MA. I saw a wealth of information, but the clearest for me was the expanding triangle on MKC showing progressively higher swings in highs and lows, thus the expanding triangle adage. MKC was bottoming at the far bottom of the pattern, and had a large upside to the upper side open. That sold me. I closed all my micro holdings in the anticipation of a sell-off except for CENX , with its impending and much talked about buy out or tender. We'll see on that one. But I expect to take a good position with MKC on Monday if the futures look promising, and maybe a smaller position with DF. I have attached the expanding triangle pattern that caught my eye.


Have a good one,

Roger