Daily Stock Picks Report Archive

January 1, 2008, Thursday Evening                                                                                                                               

Oil prices moved up over 14% probably caused by the Israeli-Palestine war as well as exceptionally oversold prices.  This could be the start of a gradual move upward over the next several months. 

Wondering what the next news event that could spook the market, it is conceivable that various States like California operating as an undercapitalized state could be the first of several states to disclose financial problems.  It seems likely that the underlying theme in the markets these coming months might be on the bullish side and we are seeing the signs of a lot of individual stocks and sectors completing a bottoming process for at least a few months.  This isn’t a call with a change to a bull market but for a countertrend upward in a bear market.

We might see a slight pullback in the market, assuming no big bombshell news event surfaces.  If there is a time where the January Effect has a chance of working, it seems probable that this year we could see a decent one.  If you are long any of these intermediates, you are probably up on profits slightly and a larger than normal trailing stop loss seems logical if you are assuming the market continues to climb.  As stocks move higher and higher especially with any accelerated price increases, a tighter trailing stop would be more suitable.

Intermediate Trade Positions:   New ideas:  none

Swing Trades:   New ideas: none.

Day Traders/Intraday stock ideas:   Intraday trades should be put on hold until first week of January when all professional managers and traders move back into the market next week.

Concluding thoughts: Trading volume will be exceptionally light tomorrow.  Market will be skewed as few people trade in stock market except small individual investors, traders, and speculators.

Ticker Symbol                     Type                          Notes                                                                                                             Purchase Date                    Open Price   Target Price

HWAY,  Healthways                   LONG- INT                    Healthcare strong industry; health sector does well in bad markets.                        12-29-08                                    11.04                14-15

OMX, Office Max                      LONG                           Good technical chart; bad fundamentals.                                                            Wait and watch

VRX, Valeant Pharmaceutical     LONG-INT                     Good technical chart; a little late to buy long; improving fundamentals;               12-29-08                                    22                     ?

K, Kellog                                  LONG-INT                     Bottoming process now; 3.1% dividend yield.                                                    12-29-08                                    42.39                47

IBM, International Business        LONG-INT                     Should start heading up.                                                                                    12-29-08                                    81.72                92

UTX, United Technologies         LONG-INT                     3% dividend; 8% potential profit                                                                        12-29-08                                    50.92                55

LLL, Level 3                             LONG-INT                     Stochastics still pointing downward                                                                    Wait and watch             

USO, US Oil Fund ETF              LONG-INT                     Oil spiked, causing a 6.2% gain in USO today on Israel-Palestine battle.               12-29-08                                    30.43                50-55

XOM, Exxon Mobile                  LONG-INT                     Moving up now; 2% dividend.  Major oil stocks strong on falling oil prices.  12-29-08                                    78.28                87-88

CVX, Chevron Texaco               LONG-INT                     Moving up now; 3.6% dividend. Major oil stocks strong on falling oil prices.  12-29-08                                    71.25                85

COP, Conoco Phillips                LONG-INT                     Moving up now: 3.9% dividend.  Major oil stocks strong on falling oil prices.  12-29-08                                    49.51                58-59

BP, British Petroleum                LONG-INT                     Moving up now: 7.6% dividend; safe dividend. Weakest of all major oil stocks.         12-29-08                                    45                     51

RMBS, Rambus                        SHORT-INT                   Start with small opening short positions.                                                                                                                                    10

FXI, Xinhua 25 ETF                   LONG                           Made up of Chinese stocks

PTR, PetroChina                       LONG                           Largest oil company in China.                                       

BAC, Bank of America               LONG SWING               Waiting for lower price and increasing volume for buy signal.                              12-31-08                                    13.10                15-16

PLD, Prologis                           SHORT-INT                   Do not trade yet.  Waiting for it to turn down before shorting it.                           Wait and Watch

DHI, D.R. Horton                       SHORT-INT                   Wait for rebound for better price                                                                        Wait and watch

TOL, Toll Brothers                     SHORT-INT                   Wait for rebound for better price                                                                        Wait and watch             

KBH, KB Homes                       SHORT-INT                   Wait for rebound for better price                                                                        Wait and watch

PHM, Pulte Homes                    SHORT-INT                   Wait for rebound for better price                                                                        Wait and watch

LEN, Lennar                              SHORT-INT                   Wait for rebound for better price                                                                        Wait and watch

AAPL, Apple Computer             LONG-INT                     Ready for long purchase                                                                                   12-31-08                                    85.97               

CNO, Conseco                          LONG-INT                     Good chart; speculative long purchase                                                               12-31-08                                                            5-6

 

SWING: 2-7 days          INT: Intermediate term position 8 days to several months.           Open Price:  price paid on opening long position or price sold on short position.

Thoughts:  Best odds only, be decisive, aggressive, mentally flexible, stay in position size, don’t overtrade and wait a little longer to buy and wait a little longer to sell.  You will find that will make you more money on your trades.  Trade what you see, not what you hope for.

Don’t trade unless the setup is there for you, then use the charts to tell you when the odds are heavily in your favor.  I recommend wide stop losses when using this technique otherwise you get stopped out frequently which is expensive, frustrating and distracts you from the bigger picture of making a successful trade.  Don’t force anything to work for you tomorrow, let the setups develop and then take advantage of that.  Be patient the next couple of days.  Stay in position sizes without letting any intraday trade represent more than 10-15% of your total account value.  As you build your account, your position size percentage should get smaller and smaller to lower your risk.

Have a great day and I’ll talk to you Sunday evening. 

Mitch King

www.TradeStocksAmerica.com

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