Tuesday - March 29, 2005
 Want to view the archive of past issues? Go here. Get the latest investment alert technology and receive the most up-to-date Profit from the Pros content as it’s published, in Real Time, with no waiting. Learn more about this free tool at: http://at.zacks.com/?id=1452. Manage Profit from the Pros subscription: 1. FEATURED EXPERTS Here we cast the spotlight on a timely Featured Expert commentary that recently appeared on Zacks.com. Following the article you will find previews of other profitable commentaries with insights and recommendations from leading investment experts.
The strand by which the spider (S&P 500 exchange traded fund) hangs has been stretched ever thinner. In the Swing Trader of March 16th, Dr. Melvin Pasternak warned that the last two weeks of March and the first week of April are often a seasonally weak period. So far, this year appears to be no exception. Tuesday's Federal Reserve warning that inflation was an increasing concern served as an effective catalyst to send the S&P 500 into a tailspin. The index completed a head and shoulders pattern with a neckline at 1184.16. The S&P is now on the verge of penetrating below its 30-week moving average at 1169 and is struggling to stay above a zone of key support between 1160 and 1167. Why is this support zone so important? First, the 1160 area is where the rising trendline drawn off the August low near 1060 intersects the chart. This trendline is now eight months old and, if broken, would signify at least an Intermediate change in trend. Second, 1163.75 is where the market bottomed on January 24th. Third, 1163 was the March 2004 peak and has previously served as resistance. If the former resistance does not act as new support, then the bull market is in trouble. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - A close below 1160 on the S&P would complete an "M" shaped topping pattern approximately 66 points in height (1229-1163 =66). According to the measuring principle, that break would forecast an eventual pullback to below 1100 -- the level where the current rally started in late October. A pullback to 1090 would drag the S&P well below its 30-week moving average, which would mean a return to a sideways stage III trading range. The Minor downtrend off the March 7th high at 1229.10 is now 13 days old. There is strong resistance in a zone between 1184 and 1192. The Minor downtrend line off the March 7th peak intersects the chart near 1185. The aforementioned head and shoulders pattern was completed when the S&P broke below the February 22nd low at 1184.16. Dr. Melvin Pasternak expects significant selling pressure to emerge at that level if the S&P approaches it. If the index can rally through 1184, then it will face resistance from the 20-week moving average. That average -- which had provided support since October -- should now serve as resistance at 1192. The 10-week moving average is slightly higher at 1194. Therefore, Dr. Pasternak expect resistance between 1184 and 1194 to thwart the market's attempts to mount an oversold rally. The S&P's weekly indicators are bearish. ADX is on the threshold of giving a sell signal, and MACD has already done so. Stochastics is plummeting, but with %K at 36 is not yet close to oversold. %D is back to 60. CCI is approaching oversold levels at -85, but is not there yet. RSI has marginally penetrated the 50 level. On the long side, few stocks have been able to withstand the pressure of a declining S&P. However, Dr. Pasternak doesn’t expect 1163.75 to be breached without a battle, and the stocks below all have strong charts. He would particularly consider trading them on days when the S&P is trending higher. Goodrich (NYSE: GR) operates in the commercial aerospace and defense markets. The stock is above rising 150- and 50-day moving averages. It is consolidating just below resistance at $39.07 -- and a break through this level might provide a good trading opportunity. On a breakout, the stock should be able to test the low $40's. Metal Management (NASDAQ: MTLM) is a scrap metal recycler and a company Dr. Pasternak has written about previously. The stock failed to take out resistance near $30 and retreated sharply to just above $25. On Wednesday, MTLM gave parabolic SAR and ADX buy signals. Dr. Pasternak thinks a retest of $30 is possible, and the stock should be watched closely at that level to see if it can break out. Burlington Northern (NYSE: BNI) is a stock Dr. Pasternak and his team successfully traded several weeks ago. BNI continues to show good relative strength and is finding support near $55. If the S&P rallies into the 1180's, then Dr. Pasternak thinks the shares can test the high $50's. With just a few short-term trades each month, using a small portion of your portfolio, you can boost your total portfolio returns to levels not seen since the Internet craze. Discover how and receive the free five-part course, --``Swing Trading Done Right: The Secrets to Putting the Odds in Your Favor.`` Learn more about this newsletter and free trial offer at: http://at.zacks.com/?id=1174. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Gregory Spear suggests maintaining a cautious attitude toward
this market. Discover how the challenging investment climate is
impacting the market and take a look at a couple of this
expert`s A-List stocks. More... Richard Rhodes explains that the FOMC sought to include
language to satisfy all and manage expectations. Discover how
the markets responded and learn about a few stocks from the
Paid-to-Play portfolio. More... Ron Rowland says the NASDAQ appears further away than ever from
its bull-market peak five years ago. Find out where it stands
today and learn why investors should no longer consider it a
small-cap index. Then receive an update on this expert`s mutual
fund holdings. More... e) You Must Eliminate Emotion from Investing John Reese says you’ve got to take the good with the bad, which
means staying calm when a situation moves against you. Use this
expert’s analysis to learn about the benefit of diversification. More... f) A Look at Digital Video and the Potential Winners Paul McWilliams says the importance and breadth of the trend in
digital video is usually more important than the details. Find
out why this expert continues to be bullish on the space and
his top pick. More... Featured Expert articles are courtesy of the 60+ leading investment newsletters that have partnered with us to create the Zacks Expert Advice service. Check out the Experts section of Zacks.com daily to find profitable stock picks and timely market commentary at: http://at.zacks.com/?id=1340.
2. BEST OF ZACKS INDEPENDENT RESEARCH The analysts from Zacks Independent Research create a mountain of insightful equity research everyday of the week. Here you will find the best of that information recently published on Zacks.com. BULL OF THE DAY Quilmes - ADR (LQU) - Benefits from Improving Latin America Anchor Glass (AGCC) - Excess Industry Capacity Rising Rates May Help Insurance Stocks Retail Focuses on Inventory Management
3. WEEKLY COMMENTARY: Earnings & Sector Update Zacks.com offers 3 unique weekly commentaries that all further
our mission to help you Profit from the Pros. Today’s
commentary is the Earnings & Sector Update from Nick Raich,
Director of Research for Zacks. His weekly article explores
the important trends in recent and upcoming earnings data. This
report is a must for any investor seeking to buy into the
hottest industry sectors and avoid those out of favor. See
the full report at: http://at.zacks.com/?id=1363. Earnings & Sector Update Over 98% of companies in the S&P 500 have released fourth quarter 2004 earnings. The results have exceeded our expectations. The final fourth quarter 2004 results will mark the fifth consecutive quarter of earnings growth exceeding 20%. As we factor in Zacks estimates for the companies yet to report with the companies that have already released results, we believe the final fourth quarter earnings results for the S&P 500 will easily exceed the beginning of the quarter consensus estimate of 15% growth. Our best estimate is for final earnings growth of 28%. Strong year-over-year earnings gains in the Materials, Energy and Technology sectors have been driving the results. In total, 491 S&P 500 companies have released fourth quarter 2004 earnings results as of 3/25/05. Of those that reported, 82% have met or exceeded their estimates. Average earnings growth has been 28% from last year with sales growth up 13%. Despite sounding like fantastic numbers, the market has shifted its attention to next quarter where the current first quarter 2005 consensus earnings growth figure is only for 10.5% growth. In our view, this figure is too low and we expect final the first quarter 2005 earnings growth figure to be 16%. Although if oil prices continue to rise, we believe first quarter figures will only slightly exceed current earnings expectations and forward guidance will not be raised. If this occurs, we believe it will not be good for a rising stock market. We caution, without the raised earnings guidance, the market could face continued near-term selling pressure. Focus over the next two weeks will be on first quarter 2005 preannouncements. Over the past thirty days, we believe earnings guidance has been relatively positive with 1.35 companies lowering earning guidance for every company raising it. Over the past five years, this negative to positive ratio has averaged roughly three to one. Therefore, the current guidance should be viewed favorably. In our opinion, this further supports our belief that current first quarter estimates are too low. Companies in the Auto-Tires-Truck sector have been warning about earnings the most as measured by a 3:1 negative to positive ratio. Retail, Finance and Medical companies also had warnings that ran above the overall average. Within the Basic Materials and Oils-Energy sectors, more companies were raising earnings estimates than lowering them over the past month. In fact, S&P 500 companies in the Basic Material and Energy sectors actually had their 1Q 2005 estimates raised by almost a full percentage point over the past two weeks. Every other sector within the S&P 500 either had 1Q 2005 estimates that remained unchanged or declined. Of course, we will closely monitor the rest of the guidance this month, which will ultimately help us determine how first quarter and even the remainder of 2005 will go for earnings. 491 companies in the S&P 500 have released 4Q 2004 earnings results as of 3/25/05. 66% (of the companies) exceeded estimates
More at: http://at.zacks.com/?id=1363. Table of Contents for Rest of the Report
Click here to read this weeks` full report. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - The hotels industry is back thanks to improving fundamentals,
and the All Stars have reserved three recommendations to fill
some vacancies in your portfolio. More... Minimizing Market Risk and Volatility with ‘Beta’ Kevin Matras looks at how to use Price and Volume for locking
in profits, cutting losses and spotting potential trend changes.
Get 9 stock examples that illustrate this. More... 4. TRADING STRATEGIES: Zacks #1 and #5 Additions Zacks.com is proud to share with you some of the best trading
strategies that truly allow you to Profit from the Pros. Today
we highlight… Zacks Rank #1 and #5 Additions The Zacks Rank is a powerful stock indicator whose #1 Strong Buys stocks have risen +33.4% on average annual return since 1988 vs. +12.2% for S&P 500. And just as important it tells you which stocks to sell now (Zacks #5). Since 1988 the S&P 500 has outperformed the Zacks #5 Ranked Strong Sells by 133.5% annually (12.21% vs. 5.23% respectively). Learn more about the Zacks Rank following this section. Below you will find all the stocks added to the Zacks #1 and #5 Ranked lists this week.
More. . .
Zacks #1 Rank List continued...
To see the full list of Zacks #1 Ranked stocks (approx. 200 stocks), then click here. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Zacks #5 Ranked List: 44 New Additions (alpha by ticker)
More. . .
Zacks #5 Rank List continued...
To see the full list of Zacks #5 Ranked stocks (approx. 200 stocks), then click here. 5. OPTIONS CENTER Zacks has partnered with the leading options experts, Schaeffer’s Investment Research, to provide you the best options commentary, research and trading tools on the market today. Read below more on Schaeffer’s Tools to Profit with Options. Well, what a couple of weeks it's been for financial giant Citigroup (C) since we last took a look at the shares. As you might recall, two weeks ago this one turned up on the High Open Interest Call Position filter because of a lot of open interest at the March 50 strike. I went through and showed why this one could be in trouble going forward and here's exactly what I said two weeks ago, "So there you have it. By examining how the market works, we can make an assumption that banking stocks might be hit should interest rates continue to gain. Then by using the filters on this page we found C. Then the last and most fun part, is doing a little research and determining that yes, the crowd is in love with this stock – therefore watch out below should it start to underperform." For those that might not have read the blurp from two weeks ago here is the quick summary of what I discussed at that time. I first noticed that interest rates were starting to tick higher, and this historically has been very bad for bank stocks. Then as I went through all of the filters on the Zacks page, I noticed that people were buying a lot of bullish calls on C at the March 50 strike. In very simple terms, the shares were trading around $48 a share at that time and with a ton open interest up near the 50 strike, the odds favor it will have a lot of trouble getting over that critical level. I also noted that there were very few short positions against the stock and that the analysts loved it. Now you might say to yourself, why in the world would you be bearish something that people are buying calls on, not shorting, and has a ton of "buy" ratings? Well my friends, that in itself is the beauty of being a contrarian. Here at Schaeffer's we strive to find these "over-loved" companies as we view this as a sign that all of the money that is ever going to be invested in the stock has already moved in for a position. Then we look for a stock that has been weak or potentially could be vulnerable for any reason and we have a safe bet that it will be hard for sideline money to come in and save the stock as it falls - as they have all already bought into the stock. It kind of sounds a little confusing, but trust me, once you see it work - then you'll agree with me. Now back to C. I advised a bearish position on this one and in just two weeks you could have made a lot of money had you played it right. Let's get right to the numbers to see what you could have done. On Friday, March 11 the shares were trading around $48 and you could have bought an April 50 put for about $2.50 a contract. This of course comes out to $250 a contract. This is one of the beautiful things about options, that is the most you can lose - is what you put in. So if you are comfortable with that fact, you can really start to make some money. Now fast forward about two weeks and we find C had tumbled to a low of near $44 a share on Wednesday, March 23. That is an absolutely huge move for a stock like C (just check out the daily chart). On this day you could have sold this put for as much as $6.00 a one point during the day. Or in simple English, you could have locked-in huge profits of 140 percent in less the TWO WEEKS. Awesome! But as regular readers know, Bernie highly advises taking ha lf out near a double and riding the rest for free. Plus considering we have a whole month until April expiration, the chances of this one going considerably lower over this time is very strong. So there you have it, yet another winner according to our Contrarian-based methodology. Obviously they all don't work, but I think if you've followed these blurps over the past few months, then you have seen that this way of trading definitely does work and with proper money management and disciplined entries and exits, you to can succeed. Please continue to use the filters on this page and don't be afraid to do some paper trading to see which strategies work the past for you. I'll be back next week with another money making idea. Have fun trading! To learn more about the High Open Interest filter, click here. a) One for the Bulls and One for the Bears Dr. Edward Olmstead provides a bearish and a bullish trade.
Learn how to benefit from a play in the broadcasting industry
and one in the oil services industry. More... b) Just One More Bubble, Please Many say that we are now seeing one more bubble, only in energy
rather than technology. Discover how Ken Trester compares and
contrasts the two and take a look at a pair of options. More... Discover all the tools and commentary available from the Zacks.com Options Center at: http://at.zacks.com/?id=614. OTHER TOOLS FROM ZACKS At the heart of Zacks Investment Research is the Zacks Rank investment philosophy that continues to vastly outperform the market. Our Zacks #1 Ranked (Strong Buys) have produced the following results for investors:
And just as importantly, our #5 Ranked stocks (Strong Sells) have alerted investors as to which stocks to dump from their portfolios to avoid unnecessary losses. To truly take advantage of the Zacks Rank, you need to first understand how it works. That`s why we created the free special report; Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions. Download a free copy now to prosper in the years to come at: http://at.zacks.com/?id=1346. Or view the full list of Zacks #1 Ranked stocks at: http://at.zacks.com/?id=1353. FREE PORTFOLIO TRACKER Do you believe that these events affect stock prices?
If you answered yes, then how are you staying on top of these changes for your stocks? If you are one of the 45,000 investors who wake up every morning to the Daily Portfolio Updates emails from Zacks.com, then you are all set. If not, then sign up now to get this vital information sent to you daily to help take definitive action to improve your portfolio's performance. Did we mention it's free? Get started now! We hope you enjoyed this issue of "Profit from the Pros", And we look forward to visiting with you again next week. REFER-A-FRIEND If you enjoy this e-mail newsletter, then please pass it along to a friend. Simply forward them the link below to sign up for their own free subscription. If you're reading a forwarded copy, sign up for your own, so you get this wealth of information every week. Just click here. THANKS! Regards and Happy Investing, Stephen Reitmeister p.s. What is the mission for Zacks Profit from the Pros? Click here to find out how we will help you become a more successful investor. *The S&P 500 Index is a well-known, unmanaged index of the prices of 500 large-company common stocks, mainly blue-chip stocks, selected by Standard & Poor's. The S&P 500 Index assumes reinvestment of dividends but does not reflect advisory fees. An investor cannot invest directly in an index. Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security. To contact us by mail: Zacks Investment Research To unsubscribe from receiving "Profit from the Pros" e-mail newsletter, click here. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Zacks #1 Stocks on the Move 05/21/2013
| Company Name | Symbol | %Change |
|---|---|---|
| FEDERAL MOGU | FDML | 8.80% |
| SCIENTIFIC L | SCIL | 8.00% |
| SUMMER INFAN | SUMR | 6.63% |
| RADIANT LOGI | RLGT | 5.85% |
| NATUS MEDICA | BABY | 5.49% |
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