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Sunday, November 1, 2009

It's about time

And paying attention.

This month was horrible for stocks. Specifically mine.
I must admit, that I was worried about the market having gone up nearly 60% amid a recession. But according to the Federal Government the recession is over.

Don't all you unemployed folks stand up and cheer at the same time.

Fact is, everything was due for a correction. A cooling off of sorts. And all it took was fear that the recovery was not sustainable, fear that everything is not going back to normal, (see unemployment figures) and that the upcoming retail season will be less than enthusiastic.

In fact, many analysts, were predicting a jobless recovery out of this recession and it looks as though they are right.

Also, not all the mortgage and financial problems that got us into this mess are completely over yet either. I mentioned this earlier this year and also saw this article recently which seemed to highlight my thoughts and this trend.

So what about all this stimulus and bailout money that either saved or created hundreds upon thousands of jobs and saved the auto and finance industries?

Well, the cash for clunkers was very temporary and if our recent experience shopping for newused cars is any indication, the auto industry still has a long way to go. In short, the dealers are desperate to make a sale. What usually takes weeks of me gong back and forth with dealerships negotiating, took only a matter of days to close the deal.

The bailout money to banks and finance institutions kept them from going under and probably saved us from going immediately into a depression. But as we saw in the previous article, there is still a lot of bad dept out there both on the residential side as well as on the commercial side.

And as for the saved jobs, many could be temporary if funding and the economy does not get better.

So, is all doom and gloom? Is it scary?

Hopefully the answers are no and maybe...

Here are the results for October.

My Starting lineup lost over 10% and my Bench lost more than 6%.
And what is truly amazing is that many of the stocks were up quite a bit half way through the month.

Case in point, CTFO which ended down 22%, was at one point up nearly 30% !
A 50%+ swing in less than one month !!!


So should we all bail out of the stock market and run for the cover of Bank CD's and Bonds?

If you do not like volatility, yes.

If you don't mind it, and are willing to pay attention, you just might be able to profit from the volatility.

Actually, I am in a way glad to see everything come down. At the beginning of last month, I was looking at the stocks in my watch lists and the market overall and saw A LOT of peeking chart patterns and stocks hitting 52 week highs. I figured it was time for a correction and this makes stock picking more difficult.

Guess I did not pay enough attention and heed my own advice...

This falls into my "I hate it when I'm right" category.

So, where does this leave us, and me, for stocks in November?

Well, here is my November Watch list(s).

For this month, I looked for stocks which past my screens and were either positioned for a recovery, near support levels, and or well run and well diversified to take advantage of areas of a strengthening economy even though not all parts seem to be recovering at the same pace.

Starting lineup:

UEPS Net 1 Ueps Technologies Inc
This is one that was on earlier watch lists and has a good business model which works well in any financial condition. It has recently dropped from recent highs, nearing a support range and is once again worth watching.

GME GameStop Corp
Another one from earlier this year. Even though Retail is expected to be down, this stock was hit by recent sell off and is well positioned to capitalize on the holiday / and post holiday season.

CNU Continucare Corp
Approaching critical support level - watch to see if it holds or looses support.

Time to buy back in. Recently seems to have bounced off of a good support low. They report earnings on the 18th.

IAX International Absorbents Inc
Pets supplies and bedding - Has maintained good results even in recession -recent good qrtly report. One thing I have learned over the years, people love their pets and they often spend the money to make them comfortable and healthy.

FCFS First Cash Financial Services Inc
Financially strong company with a recently good earnings report. It is currently in a dip hitting support levels.

GHM Graham Corp
Good well run company up over 30% for year - good pipeline - reports and recently pulled back to a more attractive potential buy in level.

ENSG Ensign Group Inc
Good play on aging population and seems to have weathered the recession better than some of its competition. Company reports earnings Tuesday.

OFI Overhill Farms Inc
Recent 52 week highs with an even more recent 10- 12 % pull back nearing support levels. Deserves a watch.

BKE Buckle Inc
Recent pull back to support levels with earnings release set for the 19th. Worth a watch even with uncertainty in retail sector.


HOGS Zhongpin Inc
Do not like pattern - could be head and shoulders pattern. But I love the name. ;-)
Seriously, a bit of a risky play but there is always a chance it will maintain support levels but deserves caution.

BBND BigBand Networks Inc
Risky but in a good sector for growth. This company just might be potentially good take over position wait until after earnings report on the 9th.

SYNT Syntel Inc
Recently fell past support at 38 next level at 30. May still fall more. But if it holds, look for a good rebound.

CFSG China Fire & Security Group Inc
A good china play that requires attention to timing.

NVO Novo-Nordisk A/S ADR
Hit Support Level and is a good play on the risky Pharma sector.

GRMN Garmin Ltd
I am not convinced that, even hitting support, this company will please analysts enough over the holidays for a stock price recovery. But, I've been wrong before and the screens seem to think it is a possible candidate for upward movement. But they've been wrong before too...

CHNG China Natural Gas Inc
Leveling off after slight pull back and reports on the 9th.

CTFO China TransInfo Technology Corp
This is the big swing stock I mentioned earlier. So, why do I keep it on a watch list? Well, Support levels were at 9 , 8 , 7, 6 (with 6 being the critical one. Peak / Drop (Triangle) pattern has been exaggerated by recent scare. May be ready for a bounce and or recovery. But be careful. It could still go lower to the critical 6 support level.

POWL Powell Industries Inc
Good sound company bouncing off of 52 week highs. Look to buy on bigger dips in price.

ISSC Innovative Solutions and Support Inc
Has been recently awarded contracts and appears to be on the move. Though I am not seeing clear buy signs at the moment (pattern wise) so I have it here on my bench watch list.


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