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DigitalDisco (< 20)

Weekly Watchlist

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August 12, 2013 – Comments (0) | RELATED TICKERS: OUTR , PGTI , CBI

A couple of sectors are showing their bottoms over the past few months which means that there are some good opportunities out there.  Specialized Consumer Services had a big drop almost 3 months ago but has held its year old resistance line and pushed higher since.  Oil and gas production and exploration companies have also been pushing up since hitting what should be the sector low about 1.5 months ago.

I only have 1 pick this week as the success of my investing plan relies on me sticking to my rules.  There are a couple of neat opportunities out there that I'll also point out in addition to my pick. 

Outerwall, Inc (OUTR) - I was watching this one last week and the timing is pretty perfect.  It closed Friday above its 30 day SMA, giving the last buy signal as the MACD Histogram and stochastic indicators had already turned positive.  The stock had been on a several month uptrend that was broken by a gap down on poor earnings.  With a PEG ratio of .83 I think this one has some room to run and it appears to have resumed the uptrend with this recent technical crossover.  I have a pending CAPS pick on this one as I feel there's quite a bit of upside here.

PGT, Inc (PGTI) - This one is a gamble.  As I've explained previously, I look for 3 buying signals when I enter a stock position.  A crossover or bounce off of the 30 day SMA, a positive crossover of the MACD Histogram, and an uptrend on the stochastic.  This one only has the bounce off of the SMA.  It did have solid volume support, but that's normally not enough.  I'm stepping outside of my rule set because I feel like this one presents a steal opportunity.  A PEG ratio of .58 indicates that even if growth is overestimated for this company that there's still quite a bit of value that isn't fully baked into the price.  We'll have to see how this one turns out this week.  This one is not one of my picks for the week but should be fun to watch.

Chicago Bridge and Iron (CBI) - As with PGTI, this one only has 1 buy signal at present, but appears to be primed for a nice upward movement.  The current price is 1.29% below its 30 day SMA and has been climbing up towards it over the past 3 sessions.  The risk here is that it could bounce south off of the SMA and signal a downtrend, which is the primary reason that I'm not willing to pick this one this week.  Further potential is that the MACDH is right at neutral and any price increase on Monday will be enough to push it into a buy signal.  The PEG ratio is sitting at .78 giving this one some potential if it can push into positive for the other 2 technical indicators.

I feel like my 2 gamble picks could pay off big this week but I'm trying to eliminate the gamble in actual investing.  I put these 2 out here as more of a study in ways that I can refine the signals I look for.  I've been contemplating a shift in criteria for a bit now as I strive to maximize profits while retaining a high percentage with my picks.  The biggest change that I'm considering is to add a bottoming MACDH as a buy signal, or at least a positively trending one, rather than waiting for it to cross over its zero line.  I'll have to see how these picks work out to possibly provide support for this idea. 

 

 

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