Recent Entries
Mar 12, 2010 Company News, Earnings, Stocks On The Move, Technical Analysis
Fertilizer maker Potash Corp of Saskatchewan (POT) added $8.34 or 7.13% to $125.27 on Friday March 12, after the company on Thursday evening, raised its current (first) quarter guidance to $1.30-$1.50 per share, which is a substantial improvement from the company’s own very recent estimates of $0.70-$1.00 per share, that was provided just six weeks ago, on January 28.
With analysts bound to question why the company would revise so sharply in so short a period, the company’s explanation was, “the upward revision reflects a sharp rebound in potash demand that is expected to drive a record quarter for North American sales volumes and strong offshore shipments, as well as higher-than-expected margins in nitrogen and phosphate.”
The dramatic improvement in the company’s fortunes, make the shares a buy, although we are now against resistance, with a double top formation in play at current levels. As such, we would look for a break above current levels, before going long the shares.
Mar 12, 2010 Stock to watch, Stocks On The Move
Citigroup’s (C) beleaguered stock, which has severely under-performed the broader markets, has been on a tear (relatively speaking) the past four days. The stock has advanced from a close of $3.50 on March 5, to a close of $4.18 on Thursday March 11, with a higher close each day.
On Tuesday, the stock rallied 7.9% from $3.55 to $3.82 on no apparent news. On Wednesday, the stock extended its gains after the company priced some Trust Preferred Securities or TruPs, that were very well received.
While Citigroup offered only $2 billion worth of the securities at an initial rate of 8.875%, demand was so strong, with orders for the securities exceeding $5 billion, that Citigroup lowered the interest rate to 8.625% and then a final rate of 8.50%.
This suggests that the worst might be over for the bank and as a results, investors are buying the shares.
In a strong market, Citigroup shares are a buy. However, traders need to be cautioned that the stock is now right up against resistance. So while new buyers might be coming in, with the recent rally in the stock, which would send the shares higher, we may also see some pull back on some profit taking.
Mar 11, 2010 Uncategorized
AboveNet - 03/10/2010
AboveNet (ABVT), which provides high bandwidth connectivity solutions to businesses, yesterday fell $7.70 to $55.46, a huge 12.19% decline, after the company reported fourth quarter and full year 2009 results. The company also provided guidance for the 2010 guidance, all which served to disappoint investors.
The stock hit an intra-day low of $53.32, but managed to cut its losses. With the rebound in the shares off the day’s lows, the stock held above $55, which is a support area. However, we don’t expect to see the stock rebounding immediately and we should see a retest of that $53 area again.
A drop of $1.50 from yesterday’s close would be a 2.7% gain and traders shorting the stock here should realize that over the next five trading days. With this trade, take quick profits.
Mar 10, 2010 Stock to watch, Stocks On The Move, Technical Analysis, Trading Idea
Google (GOOG) was up 2.9% or $16.26 to $576.45 today, a strong performer in an otherwise flat market. On March 2nd, in a post on entitled “Google Could Be Heading Much Higher” (access here), we recommended the stock based on a technical analysis of the shares. We were looking for the stock to move to $580, with some possible resistance at $560.
With the stock now at $576.45 and the stock up better than thirty-six points since our recommendation, those still holding need to assess the trade.
From a technical analysis standpoint, the stock has performed exactly as one would expect, hitting a triple bottom (pattern formed between November and February) at $520 on February 25 and promptly turning around and closing higher every day but two since then.
As such, we should expect the same might hold true and the stock might soon get checked as astute traders take profits from the current run.
We would hold still to maximize profits, but put in a very tight stop, maybe 5 points below current level and if the stock keeps moving up, adjust stop upward a point for every one point gain in the shares. While the shares might continue their upward march into next week or even beyond, we recommend exiting the trade by the close on Friday. Otherwise If the market is weak on Thursday, exit.
Mar 10, 2010 Uncategorized
Facet Biotech (FACT) is one of the best performing stocks overall today, on a $10.77 rally to $26.98, for a 66.44% gain so far on the day.
Abbot Laboratories (ABT) announced that it is $27 per share in cash to buy the company, in a deal worth a total of $450 million.
Mar 10, 2010 Uncategorized
Shares of AIG are up $3.32 to $36.09, a gain of 10.13%, on almost three times the normal volume the past three months. The stock has gone from a low of $24.99 just six days ago.
With a better than 22% of the stock being short, short traders are covering their positions and that is helping to provide additional momentum in the stock.
We could possibly see the stock advance to the $40 area.
Mar 7, 2010 Stock to watch, Technical Analysis, Trading Idea
Apple (AAPL) hit a new 52-week high of $219.70 on Friday, although the stock pulled back a bit, to close at $218.95. From the start of 2009, through October of that year, Apple’s stock was basically moving in a straight line upwards. Since mid October however, the shares have traded in a range, albeit a wide one, between $190 and $210, while briefly hitting a high if $215.55 on January 20.
With the move of $8.24 to $218.95, the stock finally broke above $215, which has proven to be a strong resistance area for the past two months and that could be a very bullish signal.
Should the markets look to head higher today and Apple is moving in tandem as well, we would look to buy the stock here. Of course, we would look to take early profits, as we still have a huge amount of volatility in the stock market.
If an entry opportunity is presented, we will follow through with this trade, so visit the blog often for updates.
Mar 7, 2010 Options, Technical Analysis, Trading Idea
Monsanto - 03/05/10
Shares of fertilizer producer Monsanto (MON) have severely lagged the overall market the past two months. On Friday, with the broader indices all gaining over one percent, the stock lost 2.23%.
However, we are now looking for the stock to hold above $72 and rebound a little, creating an opportunity for some quick profits. Should we see some further drop, we should hold above $70, with a break below there, creating some shorting opportunities.
With the stock due for a short-term bounce, we are recommending buying call options on Monsanto. Buy the March 2010 75 calls, which closed on Friday at $0.55 by $0.57.
With the stock in a downtrend, we want to enter into this trade ONLY if the stock is moving to the upside. If MON starts an upward move, then initiate the trade. We also want to take quick profits, as these are the March options, which expire on the 19th and again, the stock is in a downtrend. When the options are up at least 15% after entry, exit.
RISK PROFILE:
Assuming we enter only when MON is moving to the upside, this is a low risk trade that should pay big. However, do not get greedy. Once up about 15%, do not hold the trade overnight beyond that point.
The stock market had a great week last week and as such, some profit taking this week would not be unexpected. Keep that in mind. Take early profits and once again, enter into trade only if Monsanto is moving to the upside. We will follow up on this trade here on the blog, so check back often and or subscribe to our RSS feed here.
Mar 4, 2010 Stock to watch, Stocks On The Move, Technical Analysis, Trading Idea
Apparel retailer Ross Stores (ROST) was a strong performer today, as retail stocks rallied on the back of strong February same store sales among the group.
Ross Stores - 03/04/2010
Ross Stores was up $1.61 to $51.06, a gain of 3.26%, with the stock hitting an intra-day high of $51.55, which also happens to be the new 52-week high for the stock.
The stock has closed higher in seven out of the last ten sessions, forming a very nice bullish pattern in the process.
We can start looking for a pullback pretty soon, but for now, we are banking on more upside. If the stock market is strong on Friday, go long Ross Stores up to $51.40. Once in, put an order to sell the stock at $53.61, which is about five percent higher than current levels.
Monitor the stock aggressively and exit if ROST is down a percent or more. If by Wednesday March 10, we have not hit our target, exit. If by Monday or Tuesday, the stock is up to $52.75 or higher, exit.
For more information on Navivest’s subscription based trading advisory services, visit our website at http://www.navivest.com
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