Sunday, August 27, 2006

Good looking stocks

Every so often, I like to do market scans to search for high relative strength stocks breakout out into new highs. Here are 3 I found:

Research In Motion (RIMM)



For the first time in 2 years, RIMM is outperforming the markets. Despite all the competition, RIMM is still the leader in converged devices (PDA, phone, email), as they are favored by the government and businesses. A knock against RIMM could be that their BlackBerrys are too big; but in the 4th quarter of this year, RIMM is expected to release a new BlackBerry that is thinner, smaller, and sleeker (shiny metal coating) than the BlackBerry 7100 .

Although it faces heavy resistance technically (at around 90), I think it will start another multi-year leg up as BlackBerrys will spread from businesses to individuals.


Overseas Shipholding Group inc (OSG)



Overseas Shipholding Group, Inc. (OSG) is an independent bulk shipping company engaged primarily in the ocean transportation of crude oil and petroleum products. Recently, it has been going up strongly, although it is reaching it's near term target of 72.

Novatel Inc (NGPS)



NovAtel Inc. designs, markets and sells high-precision global positioning systems (GPS). Although it has a short term target of 50 (assuming it continues its current pattern), it faces stiff resistance at that level. However, if it breaks out from 50, this stock could be a winner for a long time.

Monday, August 21, 2006

My thoughts on the markets

Although the markets have gone up a lot in the past week, I don't trust the strength we're seeing. There are a lot of signs that points towards a slowing economy, which means the markets will trade sideways at best. From what I can remember, September is a bad month, and I wouldn't expect anything different this year.

Regarding the commodity markets, I still think that we are in a long term bull market which will not end until 2015-2020. Fundamentally, nothing has changed; demand is still rising faster than the supply. This will cause the markets to remain tight and to build up "potential" energy for a more powerful "breakout" to the upside. Therefore, I would be very comfortable owning commodity companies for the long term, especially Cameco (CCO), which remains its leader.

By the way, feel free to check out the Elliott Wave webpage, by clicking on the links provided on this site. The people who run Elliott Wave provide some very interesting commentaries about the markets using a very unique methodology. In fact, the Elliott Wave theory was one of the first things I learned about the markets, and it is the reason why I became so intersted in it.

Basically, Elliott Wave states that the markets are patterned and predictable, following the waves of human psychology. Using this theory, it increases the probability of forecasting the markets correctly. I find the Elliott Wave theory extremely helpful, and I encourage you to check it out.

Friday, August 18, 2006

Google

Sorry for the long delay since my last post. I haven't been in the blogging/trading mood lately, partly because the markets have been so frustrating. While I was gone, I got a job in a city that's south (across the border) from the city that I used to live in.

I'd like to make a comment about Google. I think today is the first time in over a year that GOOG did not close at its "max pain" point. "Max pain" is the price at which most options will expire worthless, thus maximizing the profits of the options issuers. The "max pain" point for Google is 380, but it closed at 383.5. (Normally, if max pain was 380, GOOG would close at 380.05 or something like that)

I think this is extremely bullish for Google in the short term. What I think happened was the MM's (Market Makers) were trying desperately to "pin" GOOG to 380, but they were unable to because the demand for it's shares were so strong. Because of this, I think the chances of GOOG rising on Monday (and in the near term) are pretty high.