With Seasonal Weakness Ahead, Watch These 6 Stocks
It’s a stock pickers market. In this
piece timely stocks will be addressed. The focus is long and short.
The current market reflects a split tape providing opportunities long and short.
If it is performance you are seeking then the following stocks are currently
favorable considering the technical underpinnings. The last of the summer and it
is the season of weakness for equities. The only stock market that is bucking
the current global selling is Japan. The months of August and September have
been the worst performing months for US equities over the last 15 years. And in
the top three worst performing months over the last 50 years. The following
stocks will enhance performance during this market cycle.
Applied Materials
(
AMAT |
Quote |
Chart |
News |
PowerRating) 18.39
Applied Materials is ripe for the picking right now. I have
not picked this stock yet. When you pick a stock you own it. I will pick at it
when it crosses 18.60. AMAT completed a decline on April 27,2005,bottoming at
14. The stock is in a new advance after building a base that took almost a year
to build. View a weekly and daily chart and notice the pattern of trade. The
stock is up over 7% this year and leads the market. It lags its group. There are
many semiconductor issues that have performed better then AMAT over the course
of the year. The laggard is playing catch up and is young in its advance. A rise
above 18.60 is the signal to get involved on the long side of the coin. Place
the stop at 16.99 for traders and a 15.89-investing stop.
Marvell Technology Group
(
MRVL |
Quote |
Chart |
News |
PowerRating) 46.73
Here is an example of what the leader of the semiconductor
group looks like. View the chart and gaze at a market leader. MRVL is up 31%
this year and 104% over the last year. I am involved in this issue and am
inclined to pyramid the position. Pyramiding a winning position is better
posture when compared to averaging a loser. Here is a chance to get involved in
the leader of the pack as it broke through top line resistance at 45.70.It built
a small base to lift off and sustain the brilliant advance made over the course
of the current cyclical bull market. The advance is certainly mature. The
current pace of trade ought to be given the bullish benefit of the doubt. I am
not skeptical about the shares of MRVL. I own them long. Place the stop at
41.99.
ARIAD Pharmaceuticals
(
ARIA |
Quote |
Chart |
News |
PowerRating) 8.31
Big breakout occurred on 8/23 as ARIA stormed up and settled
at the 52 week high. The break out occurred in heavy trade. The daily chart is a
sight for sore eyes. I invite you to check the chart and view the price pattern
over the last year and notice the brutal decline, subsequent bottom, followed by
a lengthy base and currently in a brand new advance. I am involved in this stock
and am willing to add to the position. The chart indicates favorable odds to
gain. The stock is good to buy down to 7.85. Place the protective stop at 6.39.
General Electric
(
GE |
Quote |
Chart |
News |
PowerRating) 33.97
George Edward as it is affectionately known is a ripe plum to
pick for hungry bears. Lets take a trip to the dark side and view the action in
stocks that are favorable shorts. GE is a low risk short. I am involved and have
been short GE for a while and it has been a gainful experience. The commitment
to the short position will grow should the stock drop below 33.70. That is the
place to short GE right now. The evidence of a decline is clear when viewing a
chart. The daily chart displays a stock that is rolling over. Place the
protective stop at 36 and 37.75.
Computer Associates
(
CA |
Quote |
Chart |
News |
PowerRating) 26.49
Short CA today. The stock broke below support and will decline
to lower levels. It currently trades below key inflection points. The stock is
in decline. The decline given the current pace of trade is likely to worsen. The
chart indicates that and given the current technical underpinnings CA will
remain in a bear hug for a while. Place the stop at 28.25.
J.B Hunt Transport Services
(
JBHT |
Quote |
Chart |
News |
PowerRating) 17.76
Take advantage of a break down much the same way that you
would a break out. JBHT broke down after it failed to hold support. That
happened on 8/23. The stock broke below 18 a share and will now search for a
bottom. It could trade lower. I am currently short JBHT. I added to the position
after it broke below 18. Perhaps it will rally up to test the 18 zone and if it
fails to cross what is now a modest point of resistance then sell JBHT short.
The stock trades well below key inflection points. The new decline is coming
after a completion of a top formation in July. The decline has just begun. It is
merely month old. The stock is down 20% this year. Most of that coming recently.
Place the protective stop above the 200-day moving average, which is 20.90.
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.