Thursday, November 27th 2014 - 02:48:18 pm

Daily Stock Picks Report Archive

Daily Stock Picks Newsletter from September 23rd, 2008

As the Three Musketeers continued pleading their case to Congress, the stock market was negative most of the day as fear prevailed that the rescue package terms may be changed or that approval may be delayed or that $700 billion isn't enough to help. 

The general attitude that people have toward our politicians and government is that they will screw this up so the financial problems won't be permanently fixed.  It reminds me of a scary movie that refers to some animal and one character says, "they're back," but I am referring to a return of more financial problems.  Oh never mind.

The VIX, Volatility Index, was even higher today than yesterday and closed at 35.72, up 1.87.   We had that follow-through to the downside that I was expecting on last night's report but the selling occurred in the last 90 minutes-- which is the same pattern we have been seeing for most days in the last week or so.

I think that we are close to the top in VIX and as the VIX goes down, stocks should have an upward direction probably for weeks and possibly months.  Tomorrow should give you another chance to buy stocks at low prices of your favorite stocks-even as stocks should open up tomorrow morning because of the Warren Buffet news (see below).

What will further fuel an upward direction in stocks is when Congress passes the historic act of buying these bad loans for $700 billion.  The market looks like it has priced in some uncertainty as the politicians continued to haggle and waggle as they tend to do.  There should be a decent amount of buying power in stocks when this gets approved.

After the market closed today the announcement that Warren Buffet is investing $5 billion into preferred shares of GS, Goldman Sachs, with the option to buy another $5 billion of common stock moved most stocks upward during the aftermarket session.  I even had time to buy several hundred shares of GS at $133.75 (average) when its stock price pulled back after the initial spike.

All the financial stocks, as you would expect, moved up sharply with MS, Morgan Stanley, moving up almost 15% in the afterhours.  GS only moved up about 10%.  Most stocks moved up after market as well. 

During the regular session toward the close, I bot long:

AAPL, Apple Computer

FCX, Freeport McMoran

MOS, Mosaic

Earlier in the day I sold short GOLD, Rangold Resources at $45.02 average.  As you can see on today's intraday stock chart that this price was not even close to the high price of the day.  I kind of forgot about it for awhile and lost track of it while I was stock trading some other stocks using intraday trading strategies but as I have said many times, that you don't have to have the top price on the first day in a falling "bullshort" in order to make money.  You don't even have to short on the first day of a correction!

Although this isn't a formal bullshort, I am treating it like one because of the sudden rise from $31 to 45 in a natural resources stock that usually doesn't move that much.   Remember we had a $80-90 move in spot gold prices in one day this week.

 I plan to hold GOLD short for 3-5 days, depending upon how the stock acts.  The spot price of gold has dropped down $17.80 today.  At first glance, the stock GOLD, looks like $40 is my first target price to cover the short position.

SYUT, Synutra International, is still moving strongly as it moved up $2.84 or 13.91% to close at $23.25.  It had a high of $26.  It looks like it could continue upward at a slower pace for another day or two.  This came from $11.74 as I mentioned it last week.  Don't be getting greedy so gradually sell this position moves higher.  There is a saying in this business, "pigs get slaughtered."

I have talked about buying long your favorite high quality stocks.  There will be many stocks moving upward on this run so it makes sense you find the ones that have had strong momentum most of this year or so.

We have seen a large momentum in stock prices dropping with exaggerated sell-offs these past weeks and markets tend to have the opposite happen as well.  When stocks get momentum on the upside, they tend to move much further than you would expect.  I try to think of the market as being a huge ship-- like an aircraft carrier and it takes a lot to change course so be prepared that it moves up a lot higher than you think.

Here are some intermediate term stock ideas that have good chart patterns.  This isn't my primary style of stock trading but you can get diversification in sectors that do well in rough economic times.  Consider these:

K, Kellog, cereal, food

GIS, General Mills, cereal, food

HNZ, Heinz, packaged food

RAH, RalCorp (Ralston Purina), packaged goods

MCD, McDonalds

WMT, Wal-Mart, discount stores

CRI, Carter Holdings, Textile-apparel clothing

CLX, Clorox, cleaning products

ZEP, ZEP, cleaning products.

PE, Pepsi, beverage soft drinks

If you want to come to a one day workshop that I teach at my house, feel free to register here:

http://www.tradestocksamerica.com/seminar.php

Have a great day and keep your position sizes small relative to the account size!  Use trailing stops, wider than normal because we have so much volatility.

Mitch King

www.TradeStocksAmerica.com

Contents: stock trading, stock picks, stock market subscription newsletter.

Mitch King is the founder of TradeStocksAmerica.com.  All material presented herein is believed to be reliable but we cannot attest to its accuracy. All material represents the opinions of Mitch King. Investment recommendations may change without notice and readers are urged to check with their investment counselors before making any investment decisions. Opinions expressed in these reports may change without prior notice. Mitch King and/or the staff at TradeStocksAmerica.com may or may not have investments in any stocks cited above before or after this newsletter is prepared. Opinions expressed in these reports may change without prior notice.

Disclaimer - Stock investing or stock trading has large potential rewards, but also large potential risk. There is risk of loss as well as the opportunity for gain when buying or selling stocks, bonds, option contracts or engaging in any strategy listed in the Daily Stock Report, The Wizard Training Course, The Trading Room and our seminar or workshops.  You must be aware of the risks and be willing to accept the risks when investing or trading in any financial markets. Don't trade with money you can't afford to lose. This website is neither a solicitation nor an offer to Buy/Sell stocks. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this website. The past performance of any trading system or methodology is not necessarily indicative of future results.

 

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