Here’s The Story The Market Is Telling Me
Hot summer action as the
SPX and COMP trade at 4-year highs. Small and mid-cap stocks lead.
Large caps lag. Small cap stocks are where the best action is right now.
Liquidity is always a factor. Secondary stocks in the small and mid-cap segment
are where to find the best action right now. Semiconductor stocks are hot. The
SOX is on fire. That is the gist of the best action within the tech sector. In my column, I will discuss 4 stocks that I am involved in on the long side. Stocks
that are acting well or have acted well. Oil prices are at record levels.
Equities don’t care about that right now. Stocks are rising in spite of higher
oil prices. The market is telling of an economy that can live with the current
levels. Interest rates are low. Real estate will stay firm as long as interest
rates stay low. The Fed is almost done tightening. The current earnings season
is decent. The market fires on all cylinders. The current optimistic view is not
extreme. Specialists have been right about being light the short side. Let’s
swing into 4 stocks that I want to address.
United Therapeutics
(
UTHR |
Quote |
Chart |
News |
PowerRating) 68.27
I sold this stock today. The reason why is because it is extended and the
major breakout that occurred yesterday is bound to get tested. I can always come
back to it later. The move is made and the stock has delivered. It has been on
the focus list for several months. The stock has delivered a major gain. UTHR is
up over 50% this year and 33% in the last 5 days, most of it happening
yesterday. I like that action and as always wish that I had more. You can never
have enough of a winner. If you are lucky to be long UTHR then sell it. I am not
selling a piece of this stock. I am disposing of it at the top of its point. It
took a vertical leap; and when a stock does that the right thing to do is to
sell a piece. Forget about stop losses. Just take the gain and come back to it
again another time. Another time when the time is right.
Cypress Semiconductor
(
CY |
Quote |
Chart |
News |
PowerRating) 14.45
Cypress is on the verge of a major move if it crosses 15 on a close. It is
angling toward that point. The point is the previous high made in March and
serves as the top of its base. The top of the base must be taken out, enabling
the advance to persist. That is what I am looking for and patiently waiting to
see happen. It is at that time I will buy, adding to the current position
carried. It is a low risk chance. The stock is about to move into an advance. It
has been basing. The base forms an angle to higher prices down the road. It has
much headroom after experiencing a brutal decline. The stock is in the process
of retracing the decline that occurred last year. This was a 50-dollar stock way
back when. It is well off the bottom and has lots of headroom. Place a
12.99-trading stop.
Aqua America
(
WTR |
Quote |
Chart |
News |
PowerRating) 32.50
This water utility has been on the focus list for quite some time and I choose
to keep it. It is rising at a steady pace. The advance is solid. It is a lovely
advance that is getting extended. So you see if you haven’t figured it out, the
stock market is always changing. A perfect moment lasts a moment. Ideal
circumstances never last. Nothing is permanent. The bears never have a permanent
hold on the action and the bulls do not perpetually rage. Right now this stock
is in bullish hands but it is extended, so what do you do with it? If you don’t
own it then wait for a pullback. The pivot point is 31.90. Start buying there.
Water utilities will stay hot for a while. Use stops anyway. Let the moving
averages be your guide. WTR is up 32% this year. If you want performance then I
invite you to stare at the chart of WTR and see one. Quite the performance,
don’t you think? I appreciate good performers, especially if I am involved in
them. This one I am not selling quite so quickly, even though it is extended. It
is not extremely extended, however. It is moving at a sustainable angle. Check
it out and see for yourself. Use the moving averages as your guide on this one.
It is a good investment.
Ubiquitel Inc.
(
UPCS |
Quote |
Chart |
News |
PowerRating) 9.27
The experience owning this stock has been positive. I am inclined to add to it,
if it can take out the high made a few weeks ago. The stock expresses decent
action right now. I like what is happening with it at the moment. It is in the
process of consolidating the gains made after the breakout that occurred on
7/11, when it rose from 8.30 to 9.52. It has been holding steady ever since and
that is a good sign. I will likely buy more, closing above the high made on
7/11. It is a leader. No question about that. UPCS is up 30% this year and 131%
in the last 52 weeks. It will move higher, angling toward the peak (11.68)
reached 5 years ago. It dropped below a buck. So the stock is in the midst of a
long-term advance that appears sustainable. It will persist, especially if it
can cross the 5-year high. That happening would be a dramatic event for the
stock and cause for joy. It’s at that time that I will begin to dispose of the
shares. If it fails in here at 9.52 then I will use the 50-day line to protect.
That is 7.99.
Jack Rothstein
Jack Rothstein is the President of Rothstein Investment Advisory Services,
Inc. and is a 20-year veteran stock trader and a money manager and trader.
Mr. Rothstein also writes Wealthcast, a monthly newsletter about the technical
behavior of the markets. He has been quoted on Bloomberg, CNNFn, the Dick Davis
Digest and the Dow Jones Newswire. Since 1993, Mr. Rothstein also hosted
WealthCast, a radio show in the Washington DC area covering the stock market.