Fuel Cell Stocks? This Is How I See The Top 15 Stack Up
Market Trend: Down
Market
Outlook: Neutral to Bearish
Sector Watch: Long Cash, Short
(
QQQ |
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Chart |
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PowerRating),
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PowerRating),
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IAH |
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PowerRating) on bounces
Peter’s Picks: Fuel Cell Roundup
The Broad Market Outlook:
Et Tu, North Korea? Then Fall
the Markets
Are these the New Motley
Fools? On Dec. 2 they doth proclaim:
Kramer: ” …I think the bears
better wake up and smell the coffee.”
Kudlow: “I don’t think this
stock move is over.”
Good entertainment. Bad (no?)
analysis.
stock move is over.”
analysis.
In our
Nov. 25
column, we posed the question as to whether the Fall rally was a short-term
bear
market technical bump or a longer term fundamental move to a new bull market.
We further pointed out that the answer to that question would come in the nature
of the pullback. Thus far, the bear-market-rally hypothesis is winning hands
down. Perhaps the biggest reason is that much of the upward momentum during the
rally was coming from small-cap and/or downtrodden tech stocks with little or no
earnings and a bleak short-term outlook.
Now, it is pretty clear that a
reverse momentum is dragging the market back into the bearish muck as everyone
tries to beat everyone else to the profit-taking exits. This is happening
against a backdrop of increasing uncertainty — not just over war in Iraq but now
also a much more formidable foe, namely, North Korea. Add to this weak to
mediocre economic fundamentals both here and in Europe and Asia, and a weakening
dollar (as we predicted) and you have all the ingredients of a treacherous
environment to trade.
Our outlook is therefore Neutral
to Bearish. We don’t like the uncertainty of the impending Triple Witch plus
some inevitable Mutual Fund jockeying before the end of the tax year. If we do
anything, it will be to short any bounces BUT maintain reasonable stops.
Here’s
the Macrowave Scorecard:
reverse momentum is dragging the market back into the bearish muck as everyone
tries to beat everyone else to the profit-taking exits. This is happening
against a backdrop of increasing uncertainty — not just over war in Iraq but now
also a much more formidable foe, namely, North Korea. Add to this weak to
mediocre economic fundamentals both here and in Europe and Asia, and a weakening
dollar (as we predicted) and you have all the ingredients of a treacherous
environment to trade.
to Bearish. We don’t like the uncertainty of the impending Triple Witch plus
some inevitable Mutual Fund jockeying before the end of the tax year. If we do
anything, it will be to short any bounces BUT maintain reasonable stops.
the Macrowave Scorecard:
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The Week’s Macro Data Market Movers: Triple Ditch
The
Macroeconomic Calendar
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* Potential major market movers in red
A semi-big week on the macro data
front. If you are shorting any housing stocks, be careful not to get singed on
Tuesday by any upside surprise on housing starts. (We see the strength of the
housing market as Bearish for the broader market as it means investors are
choosing alternative assets.)
Our macro movers of the week
include the Trade Report, with a wider-than-expected deficit putting sharper
downward pressure on the dollar and a Triple Witch on Friday which will make the
week increasingly volatile.
In addition, the re-balancing of the Nasdaq
scheduled for Friday could put a big dent in the tech sector as it appears that
the Naz is rotating some tech stocks out and substituting non-tech. Since this
re-balancing sets in motion buying and selling by index funds, it
MATTERS! (Watch out Conexant, in particular!)
Macroplay of the Week: The Barron’s Fuel Cell Matrix
The cover story in this week’s
Barron’s offers a nice case study in the hazards of trading against the trend.
Specifically, it may well be that
finding a nice basket of strong fuel cell stocks to trade might be an excellent
way to ride a longer term Macrowave that will see the gasoline-driven engine go
the way of all flesh. Yet jumping immediately into any of those stocks in the
midst of what could well be another leg down on the bear-market move is risky at
best and difficult to justify on the grounds of building positions. That said,
here’s my take on the stocks mentioned by Barron’s. Note many have liquidity
problems. Many are also technically sound but will have difficulty overcoming a
down market.
Some Fuel-Cell Players
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Company Name/Ticker |
Price |
Comments |
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$7.95 |
Good technicals. Bad market. Tangential to Fuel |
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10.90 |
Solid technicals. Very low liquidity. |
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4.46 |
Great technicals. Zero liquidity. High risk! |
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3.83 |
Good technicals. Zero liquidity. High risk! |
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4.85 |
Ditto |
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4.95 |
Lousy technicals. Zero liquidity. High risk! |
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2.65 |
Good technicals. Zero liquidity. High risk! |
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5.60 |
Good technicals. Low liquidity. Definitely a player. |
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2.70 |
Highly speculative |
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3.03 |
Good technicals. Zero liquidity. High risk! |
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2.46 |
Lousy fundamentals. |
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C$2.50 |
Highly speculative. |
If you
have a favorite macroplay
or stock you would like us to consider in this column, send an e-mail to
peter@peternavarro.com or go directly to
https://www.peternavarro.com. We’d love to hear from you.
NOTE: This will be my last column until after the New
Year. We shall hunker down in our research bunkers in between any eggnog and
champagne and come back with a veritable cornucopia of 2003 investment gems. A
wonderful holiday to all!