Read Larry Connors' blog – Short Term Trading Strategies
 |
|
Receive Alerts Free For One Week! Short Term PowerRatings Use PowerRatings every day to find the stocks for tomorrow to focus on and the ones to avoid. Sign Up Now >>
Long Term PowerRatings
Gary Kaltbaum Intraday Breaking Setups
Kevin Haggerty's Professional Trading Service
|
This was a rough week for the equity indexes. Prices dipped down close to their long term lows, prior to bouncing hard on the upside, then starting the decline again on Friday.
Bargain hunters and historic low valuations combined with the massive government financial intervention should reignite the bull market anytime now. However, the billion dollar question is, when will all the positive factors work in unity lifting the market? Once this occurs, the rising tide will attract additional buyers triggering the new bull cycle. Let's review the important events this week.
Good and bad news balanced each other out on Monday. The day saw Barclays stating some very negative words about investment bank kingpin Goldman Sachs and China announcing a tremendous stimulus package for its economy. The drop continued on Tuesday with Tyson Foods being severely downgraded by JP Morgan and oil dropping to below $60.00/barrel, adding fuel to the economic slowdown negativity.
The Indexes dropped hard on Wednesday when news hit the wire that the Feds changed their mind in the middle of the game, deciding not to buy troubled bank assets. Electronic giant Best Buy further added to the malaise by stating a consumer slow down of "seismic" proportions is underway.
A welcome reversal of fortune occurred on Thursday with the major indexes bouncing hard directly above their long term lows. Wal-Mart announced positive 3rd quarter profits and bargain hunters hit the energy sector triggering the rally.
Friday morning has been met with selling on further news of declining consumer spending and continuing economic worries. Chaotic market conditions such as these require a tested and proven method to pick safe, yet likely to appreciate stocks for your long term portfolio.
Our Long Term PowerRatings fill this niche by being built upon 12 years of extensive, statistically valid studies across most market conditions. Our studies indicate that stocks earning a 10 Long Term PowerRating have an 81% chance of being higher one year later.
Those with a 9 rating possess a 79.1% chance of trading higher one year later. Conversely, stocks that are awarded low ratings of 1, 2, or 3 have proven to simply be too volatile and risky for prudent, conservative long term investors.
You can clearly see the statistical advantage in building a long term portfolio consisting of 9 and 10 rated stocks, while avoiding the lower ratings. Let's take a closer look at several of the Long Term PowerRated stocks profiled this week:
Salesforce.com (CRM | Quote | Chart | News | PowerRating) - This internet company guides the sales process for corporations and has just been upgraded from a 2 to a 3 Long Term PowerRating. Their second quarter results have been nothing short of stunning with record revenue increase of 49%, cash flow increase of 53% and a company record of 4100 new customers added. It will be interesting to see if the third quarter results coming out later in November will show continued growth.
Most interestingly, they are the first ever software company that exceeded a billion dollar annual revenue run rate. Technically, the company has bounced off a low around $25.00 share and looks to be consolidating around the $30.00/share level. Price is still way below the 50 and 200-day simple moving averages.
Cephalon (CEPH | Quote | Chart | News | PowerRating) - This drug company remains the number one Long Term PowerRated stock in the Nasdaq index. Their TREANDA drug is thriving and they just reported record sales in the 3rd quarter. Technically, price has just pulled back from a strong uptrend and is sitting directly on the 50-day simple moving average at $72.46/share.
Kraft Foods (KFT | Quote | Chart | News | PowerRating) - Another 6 rated stock that had a great 3rd quarter. Net Revenues increased 19.4% and diluted EPS more than doubled from last year. They reaffirmed guidance for the rest of the year with positive words about the future.
Technically, price has been trading in a rough channel between $26.00 and $30.00/share. Interestingly, the 200-day simple moving average is acting as clear resistance to price at $30.47/share.
Amazon (AMZN | Quote | Chart | News | PowerRating) - This internet retailing/book selling giant has the second lowest Long Term PowerRating on the favorite's screener with a 2 ranking. Amazingly, in this economy, the company posted fantastic sales increase of 31% attributed to innovative marketing methods such as free shipping.
However, technically the stock has been in a severe downtrend. Caution should be used when considering this stock based on fundamental growth alone. It looks like a good one for your watch list here, however!
Stocks In The News
Here are a few stocks that caught my eye as they crossed the wires this week:
Circuit City (CC | Quote | Chart | News | PowerRating) - Plummeted due to a bankruptcy filing, becoming the largest retail casualty of the economic slowdown.
American Capital Ltd. (ACAS | Quote | Chart | News | PowerRating) - The company led the S&P 500 lower on Tuesday posting a 3rd quarter loss and stating it would buy back European Capital, a former spin off division.
American Express (AXP | Quote | Chart | News | PowerRating) - Fell hard after rumors surfaced that the company may need government assistance.
Bob Evans Farm (BOBE | Quote | Chart | News | PowerRating) - The sausage maker and Restaurant owner cut its 2009 estimates falling.
Diana Shipping (DSX | Quote | Chart | News | PowerRating) - Suspended its dividend and stating it will begin to take advantage of declining ship values in the secondary market.
This Week's Top Performers:
American Science (ASEI | Quote | Chart | News | PowerRating)
Arch Capital (ACGL | Quote | Chart | News | PowerRating)
Ralcorp Holdings (RAH | Quote | Chart | News | PowerRating)
This Week's Worst Performers:
KV Pharmaceutical (KV-A | Quote | Chart | News | PowerRating)
Wellcare Health (WCG | Quote | Chart | News | PowerRating)
Crocs (CROX | Quote | Chart | News | PowerRating)
What To Look For This Week:
Monday - Industrial Production
Tuesday - Core PPI
Wednesday - Core CPI, Housing Starts, FOMC minutes
Thursday - Initial Claims, Philly Fed
| Click here to start your free, 7-day trial to our Short Term PowerRatings! |
Learn what you need to know as an active investor looking to invest in companies with a history of financial strength and a track record for growth. Click the link above or call us at 888-484-8220 extension 1 to get your copy of the "5 Secrets to Successful Stock Investing" today!
David Goodboy is Vice President of Marketing for a New York City based multi-strategy fund.
About TradingMarkets | Contact | Advertise | Careers | Link to Us | Site Map | Help | Terms & Conditions | Privacy Policy | Return Policy | Testimonials | Feedback
The Connors Group, Inc. ("Company") is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company's website, or in its publications, are made as of the date stated and are subject to change without notice.
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company's products (collectively, the "Information") are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Company's website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND MAY NOT BE IMPACTED BY BROKERAGE AND OTHER SLIPPAGE FEES. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.
The Connors Group, Inc.
10 Exchange Place, Suite 1800
Jersey City, NJ 07302
© Copyright 2009 The Connors Group, Inc.
