July 27, 2009 –
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RELATED TICKERS: KBH
, SRS
, LEN
The Oxen Group is definitely concerned for this week compared to the past two weeks. All the major indices are vastly overbought technically and some worrisome sectors are reporting this week, leading into the GDP announcement that will most likely have investors fearing and selling off. To start the week, however, we may see a major to minor pullback in the housing industry that has been one of the major movers over the past two weeks. On Monday, the industry will get another major piece of data in new home sales, which is released at 9:00 AM. This barometer of how many new homes were sold in June could help the housing industry but only temporarily. If new home sales are somewhat weak tomorrow, the market's bottom. One stock that is extremely overvalued is KB Homes (KBH). KB Homes has seen a 33% gain in the last two weeks. It has moved outside its upper bollinger band, it is way overvalued on RSI, and overbought. If home sales don't meet expectations, KBH will definitely be sold off and it will trend lower from the start that investors can make a nice 2-4% gain on a short sell. If estimates meet or beat expectations, then the housing industry should definitely move up in the morning, but with how toppy the housing market and KB Homes is, it should move down from an intraday peak even if the housing report is bullish. Futures for the market are bullish, but that is most likely due to Asia's bullishness. American orders and stocks were not having the same amount of success. [more]
July 21, 2009 –
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RELATED TICKERS: STJ
, MRK
, BSX
The Oxen Group is liking the prospects for St. Jude Medical Inc. (STJ) for Monday. The market is definitely going to be decided by tomorrow morning's earnings reports, so this recommendation is preliminary with an update to be posted tomorrow morning about exactly what we think will happen. St. Jude is definitely looking bullish after medical device company Boston Scientific (BSX) posted very positive quarterly earnings with a 61% gain in profits. The rise came from high demand and sales of its cardiac device products. This should be positive for St. Jude because the company is also a medical device maker with a similar business. The company, additionally, is in a nice position to increase on the positive news that sent BSX up 6% in after hours. The company has not jumped up to an overvalued, oversold movement like many companies over the past week and a half. However, that movement in the market definitely means pullbacks will be occurring. Tomorrow could be that day as the market had little news this evening to pump futures, which are currently down. However, tomorrow morning, important earnings from Caterpillar, Coca-Cola, State Street, Merck, and Southwest Airlines will decide the market. For St. Jude, Merck's earnings are extremely important since it such a key healthcare stock. If those earnings are positive, watch for STJ to make a positive move. Unlike other healthcare companies that are relatively overbought and may peak out, STJ should not have that movement, which makes it positive. Check back though to see our morning update.
Entry: Recommend buying in 10-25 minutes into session.
Exit: We recommend exiting after a 2-4% increase.
Stop Loss: We recommend a 3% stop loss on all buy in prices
Upper Resistance: 40.75 - 41.00 [more]
July 17, 2009 –
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RELATED TICKERS: LUV
, BAC
, C
Oxen Pick (SHORT SELL): LUV
The Oxen Group is looking for a short sell on Southwest Airlines Co. (LUV) tomorrow. The market may move green or red, and it really all comes down to Bank of America, Citigroup, and GE. Those three giants release earnings tomorrow. If they are all three splendid, the market will really take off, even Southwest Airlines. The only issue for Southwest is that even if that does occur this stock is going to come down. In after hours today, Moody's Investor Ratings commented that they were putting LUV on a possible credit downgrade due to the weak demand and market for airfare. The airline industry has been struggling, but Southwest Airlines always seems to be a step in front of the competition. This news of a most likeable downgrade spells bad news for Southwest, especially because the stock has really no upside right now. What will happen to Southwest is if the market is looking to trend down after the earnings report from thesecompanies, LUV will drop right away and continue to trend down on a red day. If, however, the market jumps out of the gate and looks bullish, LUV will most likely have some type of small gains into the day, but it will not be able to sustain those gains and move backwards. Further, one has to wonder even if the earnings are positive, how much more this market has to go with four straight days in the green and a lot of quickly overvalued stocks. Additionally, if CIT does go bankrupt it could add more fuel to a downward market. LUV technically is oversold, outside of its upper bollinger band, and way overbought. So, its technicals all point towards downward movement.
Entry: Recommend buying in 15-30 minutes into session if earnings are good, right away if bad.
Exit: We recommend exiting after a 2-4% increase.Stop Loss: We recommend a 3% stop loss on all buy in prices
Upper Resistance: 6.60 (lower)
Oxen Rating*: 5 [more]
July 14, 2009 –
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RELATED TICKERS: ERX
, ERY
, USO
The Oxen Group has been pushing for the downward trending of oil over the past couple of weeks as it was just way too overvalued, but as oil dipped below $60 per barrel, investors, who are looking to put money back into the market, may find tomorrow is the start of a movement back up for oil. That is why we are recommending Direxion Daily Energy Bull ETF (ERX) Earnings season is under way, and thus far, the big names of Family Dollar, Alcoa, and CSX all have done better than expected and seen the economy bottoming. Tomorrow, Goldman Sachs and Johnson & Johnson release earnings and pre-market, which could continue the trend. We are bullish on Goldman Sachs to blow the earnings out of the water and continue to provide the market with a positive catalyst. The real news, however, that could spark some interest in the oil market is Singapore. The country reported that for their Q2 they moved out of a recession and are seeing growth in their economy. They even revised their country's drawback from 6-9% to 4-6%, sending up the Asian markets and the price of oil. The oil market should get a major boost from this news. Futures are already up in all three major indices, showing that investors are expecting to take the market higher. Retail sales is the big economic indicator coming out tomorrow. While retail sales do not directly affect oil, this indicator could push the market one way or another. With oil having been driven down, ERX has suffered greatly. If oil has some movement up, ERX will make a major move.
Entry: Recommend buying in 15-30 minutes into session.
Exit: We recommend exiting after a 3-5% increase.
Stop Loss: We recommend a 3% stop loss on all buy in prices.
Upper Resistance: 27.50 - 28.00 [more]
July 09, 2009 –
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RELATED TICKERS: HOTT
, ANF
, R
The Oxen Group is trying out another new style of investing tomorrow. In this market, finding a single day trade you can count on pretty difficult. Tomorrow, however, we are fairly confident the market should have a solid increase. Alcoa earnings came out kicking for the beginning of Q2 earnings, and the market has responded with some of the first green futures we have seen in quite some time. With bargains in the market, Alcoa looking great, a positive report from the Fed about consumer credit, and the possibility of positive earnings from a number of tech companies. I would say this Thursday is looking as good as the market can look. Therefore, Hot Topic Inc. (HOTT) may be a very nice play for some large movement. The company actually had very negative after hours news, lowering their Q2 earnings outlook and lowering their revenue estimates. The company will definitely take a stumble tomorrow morning on the news, with a 6% decline in after hours. However, if the market really does make a move up tomorrow, Hot Topic may be in a position where it can significantly move up from valley. The stock is very near a lower bollinger band, it is oversold, and it really has little room for downward momentum. The Oxen Group is confident the stock should bounce off a bottom and move upwards from there. How low it goes is the challenge, but we think a 2 to even 3 percent move downwards should be a nice play to buy in. The stock is not a great long term play, but it is a nice play off a bottom tomorrow.
Entry: Recommend buying in around 2-3% decline from opening price or 20-45 minutes in.
Exit: We recommend exiting after a 2-4% increase.
Stop Loss: We recommend a 3% stop loss on all buy in prices
Upper Resistance: 7.25 [more]
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