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 03/04/2010:
$INDU $SPX $COMPQ $RUT
Monthly Momentum Neg (OB) Pos (OB) Neg Pos
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.
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 |
| Banco Santander | BSBR | xN | Bank (Foreign) | Bank |
| First Horizon | FHN | xN | Bank (Southeast) | Bank |
| Aecom Tech | ACM | xN | Building (Heavy Constr) | Building |
| Fluor Corp | FLR | xN | Building (Heavy Constr) | Building |
| Vulcan Matls | VMC | xN | Building (Cement Etc.) | Building |
| Apollo Grp A | APOL | xO | Business Svc (Schools) | Business Svc |
| Metabolix Inc | MBLX | xO | Chemical (Plastics) | Chemical |
| Greenhaven Cont | GCC | A | ETFs (Commdty)\TotRtn) | ETFs |
| Direxion RelEst | DRV | xN | ETFs (Short) | ETFs |
| ProShrsUlShtSmc | SSG | xA | ETFs (Short) | ETFs |
| Spdr FTSE/Gbl | GII | A | ETFs (Sector\Utilities) | ETFs |
| Flushing Fin’l | FFIC | O | Financial (Savings&Loan) | Financial |
| Imperial Sugar | IPSU | xO | Food (Agricultural) | Food |
| Coca Cola | KO | xN | Food (Bev-Soft Drink) | Food |
| Wilson Grtbach | GB | xN | Healthcare (Products) | Healthcare |
| Kendle Int’l | KNDL | xO | Healthcare (Med\Den Suply) | Healthcare |
| Foster Wheeler | FWLT | xO | Machinery (Industrial) | Machinery |
| Astec Inds | ASTE | xO | Machinery (Const\Mining) | Machinery |
| Dresser-rand | DRC | xN | Petroleum (Mach\Equipment) | Petroleum |
| Willbros Group | WG | xN | Petroleum (Field Services) | Petroleum |
| Helmrch&Payne | HP | xN | Petroleum (Drilling) | Petroleum |
| Basic Energy | BAS | xN | Petroleum (Field Services) | Petroleum |
| Interoil Corp | IOC | xA | Petroleum (Refining\Mktg) | Petroleum |
| SmartHeat Inc | HEAT | xO | Pollution Control (Equip) | Pollution Control |
| LaSalle HtlPpy | LHO | xN | REIT (Equity) | REIT |
| Rue21 Inc | RUE | xO | Retail (Apparel) | Retail |
| Athenahealth | ATHN | xO | Software (Healthcare) | Software |
| Korea ElecADR | KEP | xN | Utility (Electric) | Utility |
Stocks that were close to passing net screens but just missed: KO
Markets pressed forward with another anemic performance Wednesday, but note that monthly momentum on the $SPX and $COMPQ turned positive. Still early in the month, but we are at critical resistance areas on the indexes, so we should expect some flashing of momentum to the upside. Petroleum, food, construction machinery, ultra-short sector funds and utility funds are showing bullish reversals. Only one stock, a sugar refiner, made the neural net screens and passed. This might be an indirect dollar weakness play, so it too may be volatile as well.
Here is what passed the neural net screens:
Value/Price est. 7 day ATR %( 7 day ATR)/Close
(O) IPSU 2.74/1 50.0% 2.08 0.55 3.05
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 now flickering once again between bullishness and bearishness. If economic news works positively, we might indeed press higher, but we are giving up future gains if valuations get rich, as I have discussed previously. I remain a trend skeptic and trade patterns according to my trading plan and my models.
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.
Take care,
DBB
