These 4 stocks look good no matter what the Fed does
The fed meeting today is
just another event and will be taken in stride. The price of gas is
coming in. Stocks in Europe are rising. Rising across the board this morning in
Asia. Asia is up big this morning. Hong Kong let loose. The NIKKEI broke through
13k and is on its way to resistance in the 14k zone. EWJ the instrument that
trades on AMEX is a reflection of the large cap segment of the market in Japan.
It its a good vehicle to use to play Japan. The small cap equivalent is already
extended and pays to wait on that. EWJ has decent liquidity. The Japanese market
is a global leader this year, in a year when markets outside our shores fare
better.
Futures are up this morning in the face of the
fed meeting that really doesn’t matter. The fact is that life in the equities
market toughens when the fed is not friendly. The fed hasn’t really been hostile
and is behaving in sync with the words they use to describe the process they are
in now. Raising interest rates in a measured pace. Slow and easy. Raising rates
from nothing. The bull market that started in 2003 occurred in part, because of
a friendly fed. The economy recovered during the feds overly friendly gesture of
cutting interest rates down to almost nothing. The bond market has stayed strong
and the dollar is recovering and is advancing after a brutal decline over the
last couple of years. The U.S market is neutral right now. It is on the
borderline. No reason to get excited about the overall market unless it can
cross key price zones with conviction. Heavy volume into strength will convince
what cash there is on the sidelines to get involved. The SPX must cross
1246,while the DOW rises above 10720,the COMP 2220,and the S&P Mid-cap400 725.If
that comes to pass then this current meager move will strengthen. On the other
hand a fall below 1200 SPX,10345 Dow,2080 COMP,1535 NDX,and the bears take a
firm grip and assume greater control of the action. The current market relative
to the price zones previously mentioned could easily move either way. Lets
examine a few stocks this morning and let their charts tell the tale of what’s
possible down the road.
Apple Computer
(
AAPL |
Quote |
Chart |
News |
PowerRating) 52.64
Solid. That is all you can say about this ripe
golden delicious AAPL. It broke to new levels yesterday and that prompted the
need to take action. I recognize that the advance in AAPL is mature. There is no
question about that. The chart tells me that the current advance is far from
over; the price movement indicates higher zones to come. That is good enough
reason to get involved in AAPL.It is a new stock and a new ballgame everyday. I
make believe that I never owned it at far lower levels. That is past and no
longer matters. What matters is what happens today and the next day. The trend
in AAPL remains positive. The advance is stunning. It is a market leader that
expresses the necessary momentum to keep it alive. The energy around the stock
provides confidence and persistent support. The stock is up 63% this year and
178% over the last 52 weeks. It is not to late to get involved and if you
already are it pays to add to a winner. It remains timely. Use 44.99 as a sell
stop.
Yamana Gold
(
AUY |
Quote |
Chart |
News |
PowerRating)
4.22
Gold is hot. Inflation concerns. That is a
typical explanation for a hot metals market. Gold stocks are favorable so why
not take full advantage of that reality. This little gem is on a roll right now
and is at a good price point. It is the 3rd gold stock that I am involved in and
will take a bigger position as it comes into 4. Buy it from here down to 4 and
place a stop at 3.59 and 3.29.
Federal Express
(
FDX |
Quote |
Chart |
News |
PowerRating) 77.93
Just following up with this lovely short. It’s a
lovely short because it is in decline. Transports are in lousy shape. Not
encouraging for the economy is it? Not at all. Check out the chart and see for
yourself. It is a timely short from its current level up to 80. It is getting
into oversold territory. So if you must participate and after you view the chart
and lick your chops move in easy and go at it harder as it rises toward 80 in a
rally. Short FDX in a rally. Place the stop at 82.99 on apiece and watch like a
hawk. The action in stocks like FDX and UPS and many other transports, as YELL,
a stock I covered last week, still weak. So transports are depressed and the way
to give depressed stocks value is to sell them short. If it is money that you
are interested in making then FDX provides a chance on the dark side.
General Motors
(
GM |
Quote |
Chart |
News |
PowerRating) 31.31
This is what many would call a no-brainer. Why
would anyone want to own this stock? No reason. None. Then is there a way to
make money with GM? Yes, participate selling it short. That is the way to gain
if involved in GM. It is a good stock to get involved in selling short. There is
no doubt about that! I am short this stock and doubled up on it yesterday
because it is broken. GM is a broken stock. If you are impartial and objective
about it then you attack it without mercy and keep beating on it till it just
gives up the ghost and when it finally takes its last breath and left for the
scrap heap on the side of the road then just cover as you buy it from current
share owners that throw in the towel. It is heading back to pick at the bottom.
I wouldn’t touch it. No way. You know what happens when you pick at bottoms now
don’t you? So sell GM short on a rally. It may experience a timid utterly
pitiful bounce that will provide an entry point. Nice to short a lousy stock on
an up tick. Place the stop above its 50-day line at 34.80.
The market will open on a firm note. Lets see if
the semi conductor stocks have the necessary ammunition behind it to mount an
attack after adjusting a somewhat overbought condition over the last week. The
SOX broke below its 50-day moving average yesterday. Lets find out if that level
holds. The SOX has to cross 486 and the fireworks start. Call it 490. We are
moving into the heart of weakness. It is after all the month of September and
relative to market performance the worst of the year going back forever. It’s
the best time to identify and build in instruments that are technically healthy.
Buying stocks that show and advance and selling short those that are in decline
improve the odds to gain. That is what it is all about. The game that is played
today is fast and rough. It ought to be played without emotion. Save the emotion
for loved ones. Stocks are just tools to enhance your stake. Be long stocks that
express an advance and short those that are in decline. It’s a way to play. The
greatest game in town. I am to old for baseball, and stink at golf. But I love
to play and the greatest game in town is what I have been alluding to for the
last 20 years. Today the open will be firm. A bounce in the action this morning.
Leaders will get out of the gate with good energy. The fed will have something
to say later. Lets see how the market reacts. Later.
Jack S. Rothstein
Rothstein Investment Advisory Services, Inc.
3600 Chain Bridge Road, Suite 200
Fairfax VA 22030
Phone 888-343-4825 — Fax 703-385-7232
www.jrmoney.com —
www.wealthcast.com
Jack Rothstein is the President of Rothstein Investment
Advisory Services, Inc. and is a 20-year veteran stock trader and a money
manager.
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.