Daily Stock Picks Report Archive

Hurricane Gustav weakened this weekend and oil dropped from a high of $118.65 to a low of $110.85 and natural gas dropped to a low of $7.40.  Clearly this is a breakdown toward a lower level of oil prices and energy stocks are very likely to follow this same trend.  The first thing to look for is to see if the stock prices drop decisively below the bottom channel of the trendline on these energy stocks like GDP, XOM, CVX, XTO, and COP.  This would tell us that further declines are probably in the near future to lower lows.  The substantial rise in energy stock prices that I was looking forward to did not increase near as much as expected, so far.  XTO had a range of 25% from bottom to top but most of these energy stocks have been difficult to swing trade.

I am still short MITI, Micromet and on a downtrend.  My target price to cover is $5, possibly lower in time.

CRD.B is another short I opened at an average of $14.84 and is starting to turn over.  Target price to cover is $12.

I am watching BDSI, Biodelivery Sciences as a developing bullshort. It is a biotech stock and the bullshort trading model has been working well recently.  It is just right on the environment, enough speculation in the market and fear to take profits.

I am also watching TAYD, Taylor Devices and STSI, Star Scientific  move upward as potential shorts as well.

Take note that ROST, Ross Stores, WMT, Walmart and TGT, Target have had a nice rise in stock price as people have gravitated toward more discounted stores as the economy has softened and person income numbers have decreased.

There is still no clear sign or indication of what the short or intermediate term trend will be for the averages like DJ-30 or Nasdaq Composite.

This week will see a full return of vacationing traders, investors and fund managers and the normal trading volume should continue.  The odds favor a sharper decline in stock prices these coming weeks and we should see some excellent opportunities on the upside as rebounds within a bear market trend.  If you are patient and disciplined we should have some excellent opportunities appear in all types of trading models we have been using from intraday, swing trades, and bullshorts.  I am reluctant to hold positions long in any intermediate trades (1 week to 6 months).

The economic forecasters or analysts in sectors like housing are still quite negative and forecasting longer time periods for rebounds in housing prices after a projected low point in housing prices late 2009.  We are continuing to see increasing amount of homebuilders file bankruptcy protection as forecasted with the smaller builders going down first.  Some regional builders are also on thin ice as well.  

he stocks of national builders, CTX, DHI and KBH have acted well lately and TOL has increased in price 47% since July 15th.  Perhaps this is a bottoming in housing stock prices that typically precedes the actual housing market by 6-9 months, a typical timeframe that a stock moves before the actual market it may represent.

I am looking for the ag-chemical companies to drop from here, they represent the commodities in a general way.  MOS, MON, AGU and POT.

Financial stocks are also likely to make a general downtrend with lower lows and lower highs but not in a dramatic fashion.

The expectations of rising interest rates by the Federal Reserve have reduced so the fears of FOMC raising rates have calmed.

Keep your discipline with stop losses and build position sizes that are relatively small. 

Have a great day.

Mitch King

www.TradeStocksAmerica.com