Tuesday, April 29, 2008

Taking Stock

It looks as though I bought more one day too soon. oops. My sentiment is that it is only a little consolidation, but we shall see after tomorrow because of all of the economic data coming out. Tomorrow, the ADP jobs report, advanced GDP, PMI, crude inventories, and the FOMC statement are all important indicators that can move the market.

There was some more big movement in Dryships (DRYS) today, but ultimately not a big deal. I don't expect MEMC Electronics Materials (WFR) to go in any kind of an uptrend, but quite the opposite. Most commodities prices dropped today, so quite a few of my positions took a slight beating. Anything in natural gas is a good buy, which my personal favorite is Ultra Petroleum (UPL). It looks as though Ultra is touching the 50DMA, which is a good support level and buy point. I'm loving the after-hours action (+7%) in my favorite communications infrastructure play, CommScope (CTV), due to a good earnings report. I also still like B/E Aerospace (BEAV), which I think will start back on an upwards trend. I'm still keeping my eye out on Yamana Gold (AUY), because of inflation rising and the price of gold has been dropping.

One of the positions that I have is CE Franklin (CFK). Admittedly, I bought it a few years ago when I didn't have a clue for as to what I was doing, so I have no idea for as to why I bought it. oops. Yet now, as it stands, the price of oil is such that it makes extracting oil from oil tar sands profitable. CE Franklin is involved with the sale of petroleum related equipment throughout Alberta, Canada. Alberta is known for the extensive amount of oil tar sands that it has.

Sunday, April 27, 2008

Taking Stock

I'm going to be keeping my eye on Yamana Gold (AUY) now, because it
trades virtually in lockstep with the gold futures index. At the high, when gold futures were ~$1K/oz., Yamana was trading at around $19 per share. It is now down at around $13 per share. Gold, with interest rates low and inflation running incredibly high, gold will not stay at the levels that they are at now. Yamana, and the gold futures, will go back to the levels that they were at. The chart looks good for some upside soon, partially because the slow stochastics are indicating that the shares are oversold.

Simple math:
19 - 13 = $6 potential upside
6/13 = 46% potential profit, possibly more

I sold my MEMC Electronics Materials (WFR), because they reported a quarter with negative earnings. I'll keep my eye out on that on also, because the business that they are in is still a good one to be in. Over the next few days, I'll see what the price action does and if it starts a negative trend. I keep hearing from people that have more experience than me, that WFR is done, and/or is a good short sale.

I'll admit that I was shaken out of DryShips (DRYS) for a point or two, but I am back in and as confident with it as ever. I was a little worried about it a week or two ago, when it appeared to be starting a negative trend, and looked as though the 50 and 200 day moving averages were about to make a bearish cross. I consequently put in a GTC (Good 'Til Cancelled) stop-limit order to cover the possible downside, which ended up being executed because of the $5 intraday price movement it had. Once everything was in the clear, I put in my limit order for $83 per share. I picked my two quibbles back up, and it closed at $83.98. Now, I would like nothing more than to see it break resistance and go to par ($100).

I still like CommScope (CTV), because they are involved with communications infrastructure. They acquired Andrews Wireless a few months ago, and the stock price has been in a downtrend ever since the internal costs of the acquisition were weighing down on the earnings. I'm looking forward to seeing what happens after they report earnings next week. During the past week or two, the stock has been putting in higher highs and higher lows, so I put in a GTC limit order for another quibble at about $40 per share. I had trimmed my shares back because of the downtrend.

I'm very excited about Hexcel (HXL), because they had a fantastic quarter. Now, it would be nice if both Airbus and Boeing would get their act together in getting into production with the A380 and the 787, respectively. I was very happy to see in their annual report that more and more portions of aircraft are being constructed out of composite materials. Also, in their Q1 conference call, they indicated that some aircraft are being retrofitted with composite replacement parts. My limit order is in for 1.5 quibbles at $22.50. I had a limit order in for $19.50, but I don't think I will get that now because of the earnings report.

A Thought

Regardless of how bad your situation is or has been, there is or was someone out there that either has it or has had it just as bad, if not much worse, than you have. So, when the going gets tough, keep your head up and don't wimp out.

Saturday, April 5, 2008

Taking Stock

I'm happy to see that the majority of the negative sentiment has been worked out of the overall market now. To me, it seems as though the markets have been developing a base for what I hope will be an upward trend. It seems as though they have been putting in higher highs and higher lows, which is a good sign. The homebuilders have been in an uptrend, along with the Transports and the Industrials. I noticed that the unemployment rate and the unemployment insurance claims increased, but they are more than likely short-term and are far from recessionary.

I was a little worried this past thursday morning when I was watching CNBC, because MEMC Electronics Materials (WFR) reported guidance of lower revenues for the coming quarter. Hence, the stock was down by around 11% at the open in the morning. Luckily, as it turns out, the decrease in revenues was simply due to a temporary shutdown of one of their production facilities. I took the opportunity to buy more shares, like I have been wanting to do fo quite some time, and the stock has since recovered the majority of that downside. My only concern for this company and the stock is the increasing development and production of thin-film solar cells. Silicon based PV cells still have over 90% of the market share of solar cells, but there is the possibility for that to change.

I recieved the annual report for Hexcel (HXL) in the mail yesterday. I thought it was interesting that composite materials have been increasingly being used in the construction of aircraft, and in larger proportions. In fact, the Boeing 787 Dreamliner will have about 50% of its' weight composed of composite materials, and similar proportions for the Airbus A380. I'm looking forward to the A380 and the 787 going into production, and hopefully that will be soon. Boeing and Airbus make up around 50% of the revenues for Hexcel.

Tuesday, April 1, 2008

Q: Credit Spreads?

What are Credit Spreads, and how do they work? What are they used for?