These articles describe the statistical probabilities of long positions on these equities, based on neural net projections, for the next 5-15 trading days. These are not holy grail methodologies, the road to easy street, or anything else. These projections are the result of screening for technically significant retracement and momentum patterns that have been further screened for value and bullish sector performance. In other words, the projections are for long positions.
For 03/03/2010:
$INDU $SPX $COMPQ $RUT
Monthly Momentum Neg (OB) Neg (OB) Neg Neg
Weekly Momentum Pos Pos Pos Pos
Daily Momentum Pos Pos Pos Pos
N means neutral, Neg means negative, Pos means positive (OS) means oversold and (OB) means overbought. The value to price estimate (it is not a guarantee, only a cash flow based estimate) can be defined loosely as a multiplier of price. A number higher than one means the stock is undervalued using this model and a number less than one means the stock is overvalued.
Index and ETF I-shares Bullish Reversals (Note: to look up quotes for the Dow Indexes (starting with DJ or DW, add a dollar sign. No dollar sign is required for the ETFs beginning with other letters.) Today’s list includes only those ETFs with a 50-day moving average of daily volume greater than 100,000 shares.
ETFs should be back in 10 days pending full restoration of the database.
DJGSP
DJUSBM
SJUSBT
DJUSEN
DJUSHC
DJUSNC
DJUSNS-X
DJUSOI
DJUSOQ
DJUSTL
DJUSUT
DJUSWC
DJX-X
DWC-X
DWMI-X
DWSG-X
IMUS-X
IMUSL-X
The stocks that demonstrated bullish pattern reversals are shown below. The stock at the top of the sector list is the cheapest on a price to near-free-cash-flow basis, the stock at the bottom of the sector list is the most expensive on a price to near-free-cash-flow basis.
| Company | Symbol | Exch. | Industry | Sector |
| Air Prod&Chem | APD | xN | Chemical (Specialty) | Chemical |
| N C R Corp | NCR | xN | Computer (Systems) | Computer |
| Lilly (Eli) | LLY | xN | Drug (Ethical) | Drug |
| Bristol-MySqb | BMY | xN | Drug (Ethical) | Drug |
| Allergan | AGN | xN | Drug (Ethical) | Drug |
| Alkermes Inc | ALKS | xO | Drug (Biomedical\Genetic) | Drug |
| Tessera Tech | TSRA | xO | Electronic (Semicndtr Mfg) | Electronic |
| Canadian Solar | CSIQ | xO | Energy (Clean) | Energy |
| Market VctrsGld | GDX | xA | ETFs (Commdty)\Futures) | ETFs |
| Direxion EngyBl | ERX | xN | ETFs (Sector\Energy) | ETFs |
| sTracks Gold | GLD | xN | ETFs (Commdty)\Futures) | ETFs |
| Legg Mason | LM | xN | Financial (Brokers) | Financial |
| Dean Foods | DF | xN | Food (Dairy Products) | Food |
| Kellogg Co | K | xN | Food (Prepared) | Food |
| Cal-Maine Food | CALM | xO | Food (Meat Products) | Food |
| Archer Daniels | ADM | xN | Food (Sugar\Flour\Grain) | Food |
| Baxter Int’l | BAX | xN | Healthcare (Products) | Healthcare |
| Covidien Ltd | COV | xN | Healthcare (Products) | Healthcare |
| Health Net Inc | HNT | xN | Healthcare (HMO) | Healthcare |
| Zimmer Hldgs | ZMH | xN | Healthcare (Products) | Healthcare |
| TiVo Inc | TIVO | xO | Home (Audio\Video Prods) | Home |
| Google Inc | GOOG | xO | Internet (Svc Provider) | Internet |
| Coeur D Alene | CDE | xN | Mining (Gold\Silver) | Mining |
| Gold FieldsADR | GFI | xN | Mining (Gold\Silver) | Mining |
| Goldcorp Inc | GG | xN | Mining (Gold\Silver) | Mining |
| Randgold Rscs | GOLD | xO | Mining (Gold\Silver) | Mining |
| Stillwater Mng | SWC | xN | Mining (Other) | Mining |
| Int’l Paper | IP | xN | Paper | Paper |
| Fibria Celulose | FBR | xN | Paper | Paper |
| Schlumberger | SLB | xN | Petroleum (Field Services) | Petroleum |
| Tesoro Petrol | TSO | xN | Petroleum (Refining\Mktg) | Petroleum |
| Frontier Oil | FTO | xN | Petroleum (Refining\Mktg) | Petroleum |
| Noble Energy | NBL | xN | Petroleum (U S Explr\Prod) | Petroleum |
| Pengrowth Engy | PGH | xN | Petroleum (Intl Integrted) | Petroleum |
| Rino Int’l | RINO | xO | Pollution Control (Equip) | Pollution Control |
| Sears Holdings | SHLD | xO | Retail (Major Chains) | Retail |
| Penney (J.C.) | JCP | xN | Retail (Department Stores) | Retail |
| Qualcomm Inc | QCOM | xO | Telecomm (Equipment) | Telecomm |
| Verizon Comm | VZ | xN | Telecomm (Services) | Telecomm |
| Garmin Ltd | GRMN | xO | Telecomm (Equipment) | Telecomm |
| Nokia Corp ADS | NOK | xN | Telecomm (Equipment) | Telecomm |
| Ericsson TlADR | ERIC | xO | Telecomm (Equipment) | Telecomm |
| Genco Shipping | GNK | xN | Transportation (Ship) | Transportation |
| Ameren Corp | AEE | xN | Utility (Electric) | Utility |
Stocks that were close to passing net screens but just missed: FTO,VZ,BMY,LLY, BAX,TSRA
Markets were relatively anemic on Tuesday though volume was indeed about 28% higher than the 50 Day simple moving average (SMA) for the group of bullish reversals. Telecom, petroleum, drugs, gold and silver mining, healthcare, and electric utilities still dominate the bullish reversals list. What I think is most significant in this market is that MICROCAP stocks (yes, darn it, penny stock country) are breaking to new highs. The rest of the market languishes while these stocks seem ready to pop. Is this a sign of excessive speculation? Who knows, but I do not trade in them because I simply cannot take that kind of risk with a large percentage of my trading or investment portfolio. We are still drifting a bit in no man’s land, and until we see a bit broader swing participation, I am still a little suspicious of a huge rally. Nothing passed the net screens today, though quite a few were close. TSRA does look like it has decent gap fill potential.
Here is what passed the neural net screens:
Value/Price est. 7 day ATR %( 7 day ATR)/Close
Nothing today.
Note (O): optionable
*Beta greater than 1.5, Volume greater than 1 million shares on a 50-day simple moving average volume basis.
MOMENTUM INDICATORS ARE BEARISH on a MONTHLY basis now, so caution is still advised from the long side. This further emphasizes the need for new highs to be taken out, or the rally as we have seen from March 2009 could indeed stall out for awhile.
Right now, the short-term world is bullish, and if you see bullish trades that meet ALL criteria for your trading plan, then take your shot. MAKE SURE, however, that you are using stops and taking profits at appropriate levels.
Until we take out recent index highs, this rally is likely to be tenuous at best. Use your head. Crowds are often wrong. I hate repeating myself, but I do this for my own record keeping. Just be careful out there.
Take care,
DBB
