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Oxen Report: Monday Morning Jittery as Investors Ready for Big Week

Good Monday to everyone. I hope you all had a fantastic weekend. We start off the week with a sort of jittery Monday as things are all over the board to start the week. Last week, we had another really successful week of trading and positions that finished on a solid note on Friday as we got involved with Sallie Mae (SLM) at 11.22. We also have positions in Entergis (ENTG) at 5.03 with a target of 5.18 and GFIG at $4.91 with a price target of $5.05. 

Today, we will open with a new Buy Pick for the day. We will also look at a Play of the Week, have our daily Longterm Updates, $5 List Updates, and various other updates throughout the day. Additionally, since we are in the heart of earnings season, an Overnight Trade may make its way onto the table as well.

Stay tuned for all of that…

 

Buy Pick of the Day: Direxion Daily Financial Bull ETF (FAS)

Analysis: The fear of a second financial apocalypse coming due to put-back mortgage exposure has done most of its short term damage. Leading financials, especially Bank of America (BAC), Wells Fargo (WFC), and JPMorgan (JPM), were slammed last week by news that a probe was commencing into various companies that may have had faulty loan pools that offered mortgage-backed securities to investors. These investors were basically taken for a ride by financial companies, and now they have to pay.

The fear of major losses took all these stocks down last week, and it took leading financial ETFs with it. Direxion’s Financial Bull ETF (FAS) lost just under 10% in three days. The ETF has major holdings in all three of those companies, and it will continue to falter if they do poorly. The ETF, today, however, should start to look for a boost. For one, BAC, WFC, and JPM are all looking to open in the green. Fears have subsided, and CNBC among others has commented that these stocks look buyable at new levels. 

Additionally, the financials of all things are actually looking positive while futures are temporarily looking down. I am in a bullish camp right now that believes the open in the red will only present a short term buying opportunity for investors. With earnings on their way, investors are not going to pass the opportunity to stick themselves into various positions. The earnings have much too good and should maintain this way for investors to pass on the opportunities.

Financials, of all sectors, may actually lead the way this morning. Citigroup (C), this morning, continued an earnings surprise streak for the financials as the company beat earnings expectations by a penny and commented that they saw less loan losses. With the current undervaluations, fears subsiding, and Citigroup’s earnings, FAS looks like a position that could soar this morning. 

We are looking to make 2-3% and get out. Watch for a small dip to start the morning before things take hold. 

Entry: We are looking for an entry of 21.45 – 21.65.

Exit: We are looking to exit for a 2-3% gain.

Stop Loss: 3% on bottom.

 

Good Investing,

David Ristau

This entry was posted on Monday, October 18th, 2010 at 9:15 am and is filed under Uncategorized. You can leave a response, or trackback from your own site.

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Comments



  1. David Ristau
    October 18th, 2010 at 9:17 am | PermalinkIgnore this user

    Oxen Alert – New Position, Story


    Hey all,

    We have a new position we are looking at for this Monday morning in Direxion Daily Financials Bull ETF (FAS).

    Check it out here.

    Good Investing!

  2. garbon
    October 18th, 2010 at 9:27 am | PermalinkIgnore this user

    David, I missed SLM Friday. Do you still like an entry at this morning’s price?

  3. David Ristau
    October 18th, 2010 at 9:29 am | PermalinkIgnore this user

    Garbon -

    Entry is even more attractive this morning. I like it!

  4. garbon
    October 18th, 2010 at 9:30 am | PermalinkIgnore this user

    Thanx

  5. David Ristau
    October 18th, 2010 at 9:33 am | PermalinkIgnore this user

    Oxen Alert – FAS Entry, ENTG Exit, Positions


    FAS – We are involved at 21.45. We are looking to exit at 21.96 and above.

    SLM – We are looking to exit at 11.55 and above.

    ENTG – We are out of ENTG for a 3% gain at 5.18. The stock opened well above where I thought it would this morning. The mutual funds are kicking it upwards!

    GFIG – We are looking to exit at 5.05, and the stock is at 5.04. This one should move into range shortly!

  6. David Ristau
    October 18th, 2010 at 9:41 am | PermalinkIgnore this user

    Oxen Alert – GFIG Exit

    (This is a preview of an Oxen Alert. Ask me how to receive alerts like this.)


    We are out of the position at 5.10 for a 4% gain! Solid!

    Open positions are SLM and FAS.

    Good Investing!

  7. willsons
    October 18th, 2010 at 10:04 am | PermalinkIgnore this user

     Thanks for those 5 dollar plays David!

  8. David Ristau
    October 18th, 2010 at 10:05 am | PermalinkIgnore this user

    Willsons -

    No problem…more to come!

  9. lunar
    October 18th, 2010 at 10:36 am | PermalinkIgnore this user

    david, thanks for 4% on GFIG!

  10. David Ristau
    October 18th, 2010 at 10:49 am | PermalinkIgnore this user

    Oxen Alert – FAS Exit


    We are out of FAS for a 3% gain at 22. 09 with an entry at 21.45.

    3/3 on the day with Sallie Mae (SLM) being our only open position.

    Good Investing!

  11. westterra250
    October 18th, 2010 at 10:58 am | PermalinkIgnore this user

    Hi David
    Just wanted to THANK YOU for your great picks (just started following you one week ago)!!Missed your FAS pick this morning but in and out of all the others!!  Love the way you attach your analysis to your picks many other sites just recommend without any details.
    Much Thanks

  12. David Ristau
    October 18th, 2010 at 11:07 am | PermalinkIgnore this user

    Oxen Alert – Longterm Positions Update


    FSLR – The stock has moved back into the Hold range after a strong Friday and Monday. The stock is at 148 and a Buy below 144. I hope some of you got involved because I have quickly pulled in 5% from my entry on Thursday.

    SPWRA – Recent release from California shows that SPWRA has 19% of market share there, which is the leading number. Good to see SunPower doing business here in the States and diversifying. 

    CREE – The company announces its earnings tomorrow evening. We will be watching these closely and making amendments to estimates moving forward after the announcement. The company is expecting to announce an EPS of 0.58 vs. the previous 0.30.

    No other updates.

     

    Good Investing!

  13. David Ristau
    October 18th, 2010 at 11:11 am | PermalinkIgnore this user

    Westterra -

    No problem. I am glad you are having success with our positions so far. We have hit a very good stretch over the last few weeks. I think there has only been one miss in 4-5 weeks, so watch out! No one is that good, but I will keep them coming as long as you all will have me.

  14. David Ristau
    October 18th, 2010 at 11:21 am | PermalinkIgnore this user

    Oxen Alert – The $5 List


    We have gotten into two positions that have worked out well for us so far in Entergis (ENTG) for 3% and GFI Group (GFIF) for 4%. 

    We employed the strategy of buying a company moving upwards towards $5 and a company that was at $5, and they have both worked out for us.

    Too bad we did not stick with ISTA Pharmaceuticals (ISTA). The company got FDA approval. We got a solid 5% out of it, but we could have taken around 17-18%…The stock has just moved into the $5 range, but with approval and now a second drug…it might have more legs on it. 

    Other than that, LIOX (just moved below $5) and LSCC are close to $5. The same companies are still over $5 with ENTG, GFIG, KKD, and JADE.

    Without any pressing developments, I am going to pass. If you want a play though I would look towards ISTA on any pullback and LSCC.

    Good Investing!

  15. jthoma
    October 18th, 2010 at 11:23 am | PermalinkIgnore this user

    david- glad to see a couple of the $5.00 plays working- strong buying impetus if they are good companies as it turns the funds lose to buy- JT

  16. David Ristau
    October 18th, 2010 at 11:30 am | PermalinkIgnore this user

    Jthoma -

    Thank you for the initial idea. Working them into playable strategies has been the hardest part, so I am watching them for patterns. I think I  am getting the hang of them, but I may have been lucky.

  17. David Ristau
    October 18th, 2010 at 11:44 am | PermalinkIgnore this user

    Bullish sign from Delta:

    The global travel rebound has Delta Air Lines (DAL) adding 1,000 flight attendants, some 425 of which are accepting a recall from their furlough. It’s a 5% increase in attendants, and while pre-Northwest-merger Delta rejected union drives, attendants are voting through Nov. 3 on representation. 

    Very solid!

  18. David Ristau
    October 18th, 2010 at 12:17 pm | PermalinkIgnore this user

    Oxen Alert – Midday Update


    Hey all,

    We are having quite the day. We have closed three positions in the green. We got out of Entergis (ENTG) for 3%, Direxion’s Financial Bull ETF for 3%, and GFI Group (GFIG) for 4%. We have an open position still in Sallie Mae (SLM) that is sitting down just under 1%.

    The company reports tomorrow evening, so we will be looking for movement tomorrow…bad earnings from Student Loan Corp. is not a helpful sign, but I think we can still get a bit of gains out of this one.

    For the rest of the day, I am either going to get us into a Buy of the Week or Overnight Trade…if we don’t do Buy of the Week today, we will tomorrow.

    I am maxed out on positions right now, so that is the reason for delay.

    Let me know if you have any questions. I am available all day.

    Good Investing! 

  19. jthoma
    October 18th, 2010 at 12:21 pm | PermalinkIgnore this user

    david- wish I could lend you some but I am like the banks- not lending at present- LOL!

  20. foolishtrader
    October 18th, 2010 at 12:26 pm | PermalinkIgnore this user

    Having closed 3 positions how are you maxed out? 

  21. David Ristau
    October 18th, 2010 at 12:29 pm | PermalinkIgnore this user

    Jthoma -

    Haha…thank you.

    Foolish -

    I have to wait for funds to close. I can get into longer plays, but I maxed out my funds for everything but one more new position. I have to time it so I have available funds. 

  22. foolishtrader
    October 18th, 2010 at 12:36 pm | PermalinkIgnore this user

    Ah yes, the old settled funds scam.  I love that one.  When was the last time you saw a trade that did not settle?

  23. David Ristau
    October 18th, 2010 at 12:39 pm | PermalinkIgnore this user

    Foolish -

    If I buy and sell a stock before funds settle, I will get in trouble with the SEC for freeriding. Its illegal not a scam. I have gotten shut down for 90 days before from doing it by the SEC. I don’t take any risks or push my luck anymore.

  24. foolishtrader
    October 18th, 2010 at 12:43 pm | PermalinkIgnore this user

    I understand.  I have been there too.  Scam is the wrong word.  It is in my view a stupid rule though.  In my entire life I have not once seen a trade not settle on time.  The money is there.  It is being used by someone.  But you can’t use it.  I think this is one of those rules that made sense 50 years ago but not anymore.  Maybe if it slowed down the HFT guys… but seems to have no effect on them.

  25. David Ristau
    October 18th, 2010 at 12:48 pm | PermalinkIgnore this user

    Foolish -

    Oh, I totally agree. It is very outdated. I thought you were saying I was trying to scam you. I think the regulation really hurts us less frequent traders. When I started, I had no idea about the rule and did it all the time. One day, I get a nice letter from the SEC saying they were freezing my account for 90 days. If I did it more, they would take further action. They cared about an eighteen year old throwing around $5000. Unbelievable. Now that I have this site, though, I have to be super careful.

  26. foolishtrader
    October 18th, 2010 at 12:52 pm | PermalinkIgnore this user

    Sorry about that.  Bad choice of wording on my part.   In my case it was a nice letter from Vanguard.   They had in fact put up warnings but the wording of them made me think they were saying to be careful not to exceed my margin limits but then SURPRISE…   I can only trade with settled funds for 90 days.

  27. jthoma
    October 18th, 2010 at 12:54 pm | PermalinkIgnore this user

    david- Your interpretation is partly incorrect so talk to whomever you use. you can sell a stock- if you hel it overnight and then use those same funds to buy again that day. You cannot however buy in the morning, sell that day, and once again use those funds tha day. that is not the brokerage firm but the SEC that says that- hope this clears it up a little- JT

  28. David Ristau
    October 18th, 2010 at 12:56 pm | PermalinkIgnore this user

    Foolish - 

    All good…I see.

    Jthoma -

    Right…what I was doing was buying, selling, buying (with mine and others money), selling…sometimes in one day…sometimes in two days. Either way, it takes three days for funds to settle typically. I have seen it take less and more.

  29. David Ristau
    October 18th, 2010 at 1:39 pm | PermalinkIgnore this user

    Looks like we are going Buy of the Week…not seeing much in way of Overnighters…

  30. David Ristau
    October 18th, 2010 at 1:51 pm | PermalinkIgnore this user

    If Harrahs can play like LVS…its a solid buy:

    Harrah’s, the world’s biggest casino company, plans to head back to public ownership after three privately held years, through an IPO that is reported to seek $575M.

     

  31. David Ristau
    October 18th, 2010 at 2:20 pm | PermalinkIgnore this user

    BUY OF THE WEEK IS…

    Huntington Bancshares (HANB)

    Story coming…

  32. Savi
    October 18th, 2010 at 2:47 pm | PermalinkIgnore this user

    David--Tx for the ENTG and GFIG plays

  33. alik
    October 18th, 2010 at 2:47 pm | PermalinkIgnore this user

    Hi David, what do you think about ISRG as an earnings play? Thanks.

  34. Savi
    October 18th, 2010 at 2:48 pm | PermalinkIgnore this user

    Sorry hit sent too quick--what do you think of ELGX
    Tx

  35. David Ristau
    October 18th, 2010 at 3:10 pm | PermalinkIgnore this user

    Oxen Alert – Play of the Week Goes Regional

     

    Buy of the Week: Huntington Bancshares Inc. (HBAN)

    Analysis: My family is full of bankers…lovely I know. My uncle is the Director of E-Commerce a Huntington, so I have a certain level of added respect for this company. I tell you this because I hope it does not cloud my judgment in any way. Anyways, Huntington Bank (HBAN) is slated to release their earnings on Thursday morning with an estimated EPS of 0.07 vs. a loss of 0.33 per share one year ago. This looks to be the company’s best quarter since 2008, and many of the banks that have already reported are showing that the core business of banks is actually improving despite what most critics have thought.

    Huntington, in my opinion, looks very solid moving into Q3 earnings. First off, we have seen some very solid results across the board for financial companies reporting thus far. Further, Huntington is fairly undervalued moving into a turn to profit. The company should make a move with a number of regional Midwest banks reporting this week that will help drive financials up in Huntington’s sector.

    For the quarter so far, nearly all reporting financial institutions have surprised in the right direction. The five reporting financial companies (JPM, First Horizon, Charles Schwab, Webster, Commerce Bank) have all met or beat earnings with four of those beating earnings. Nearly every company has noted they have seen much better credit, lower delinquencies, and improvements in nearly every aspect. One downside has been investment banking sectors, but not many regional banks have much of their business in this sector.

    Huntington has limited investment banking, and I expect they will see a similar result as those that have reported thus far. Most of the fears on continued credit problems are mostly in the Southeast and Pacific areas. Huntington does most of its business throughout the Midwest. The company will be getting a boost throughout the week before its earnings not only from its own promising results, but the Midwest Regional Bank sector. US Bancorp (USB) and Comerica (CMA) are both slated to report earnings on Wednesday that should boost the sector. USB is expected to prove profits per share by over 35% and Comerica by 500% with a major turn to profit. 

    There are a lot of positive signs coming in the direction of financials despite what most would say. Deposits in retail and nonretail banks improved from $7.6 trillion in 2009 to $7.7 trillion at the same time in 2010 thus far. One of the most helpful improvements has not been the number of loans rising but credit quality of loans rising. Additionally, the company is looking towards the longterm rather than short term, which is a positive trend.

    From The Street, "In a note last month after Huntington met with investors and analysts in New York, Siefers wrote that Huntington’s management has made "a calculated bet" to give up short-term profits in the hope of gaining market share over the longer term with a more customer-friendly approach. ‘The risk,’ Siefers writes, ‘is a more customer-focused company that simply earns less than it did previously.’"

    One troubling statistic for Huntington is they are in a dwindling group of banks that still has not paid their TARP money. This to me is not a good sign of a company that has excessive profits and cash flow. The company has not done any capital raising as of late, which other banks have done, and they will most likely need to in order to pay it off. On the other hand, the company raised its auto financing from 5% to 11% through Q2 of 2010 from 2009. The auto industry has returned heavily, and this financing will add significant revenue streams to the company. The company has begun smart lending, and it is seeing credit improving.

    Overall, there is a lot of positive movement in the regional banks, and with Huntington’s current valuation, they can make 4-6%. The company has an RSI at only 46, which is below fair value, and it has moved down over the past few days. It did not get a rise today, which is somewhat concerning. On the other hand, the stock has very limited downside risk. The stock has only 2% downside to its lower band, while it has 6-7% upside. Another positive sign is that the company is seeing its bollinger bands narrow significantly right now. It is due for a breakout. I think with positive signs coming from USB and CMA, the company will make a major move this week. 

    We are not looking to hold into earnings, but I am fairly optimistic in that area as well.

    Entry: We are looking to get involved at 5.65 – 5.75.

    Exit: We are looking to gain 4-6%.

    Stop Loss: 5% on bottom.

     

    Good Investing!

  36. David Ristau
    October 18th, 2010 at 3:11 pm | PermalinkIgnore this user

    Did anyone get the alert message?

    I sent it…and nothing appeared in here…

    If I lost it…oh my.

  37. David Ristau
    October 18th, 2010 at 3:15 pm | PermalinkIgnore this user

    Alik -

    Looks somewhat solid. The company has high P/E ratio already, so they need to beat by higher margin to improve out of earnings. Stock has lot of upside, so that is good to see. Looks like a nice year-over-year growth and consistent earnings beats. Pretty expensive. High P/E is only concern…

    Savi -

    ELGX is really low volume, so I avoid these ones. The problem is that anything can happen. If a big investor sells after a solid report for huge profit it can oversupply the stock and make it drop. Its really hard to predict these companies because of such low volume. I look for average volume at least at 300,000 or so. 

  38. garbon
    October 18th, 2010 at 3:17 pm | PermalinkIgnore this user

    No alert on HANB.

  39. David Ristau
    October 18th, 2010 at 3:17 pm | PermalinkIgnore this user

    Oxen Alert – HBAN Entry


    Did anyone get the Buy Pick of the Day alert?

    I am in HBAN at 5.71.

    Good Investing!

  40. David Ristau
    October 18th, 2010 at 3:17 pm | PermalinkIgnore this user

    Garbon -

    AIAAONTEIOQENWOIWNTIONWTWEION…I spent an hour writing that.

  41. David Ristau
    October 18th, 2010 at 3:21 pm | PermalinkIgnore this user

    Oxen Alert – Buy of the Week


    I lost a very long nice article about Huntington Bank.

    Summary of what was said:

    - Huntington Bank is expecting best quarter since 2008 with an EPS of 0.07 vs. loss of 0.31 one quarter ago.

    - Bank stocks have been performing very well thus far. 5/5 have met or beat earnings. 4/5 have beat earnings.

    - Regional banks are seeing improving credit quality on loans and less delinquents and writeoffs.

    - Company looks good for week because they are going to get boost from US Bancorp that is expecting 35% improvement on EPS and Comerican who is expecting 500% improvement.

    - Concerns are housing industry in Ohio…

    - Company improved auto lending from 5% to 11% in 2010 over 2009 so far – great source of revenue.

    - Very undervalued with low RSI, oversold, and lots of room to grow.

    Get in between 5.65 – 5.75.

    We are looking for 4-6% gain.

    I am involved at 5.71.

  42. jeanc
    October 18th, 2010 at 3:23 pm | PermalinkIgnore this user

    David
    I still have your article on HBAN,

  43. David Ristau
    October 18th, 2010 at 3:23 pm | PermalinkIgnore this user

    Jean -

    You got it?!

  44. jeanc
    October 18th, 2010 at 3:26 pm | PermalinkIgnore this user

    Yes I have it. Give me an email address and I can send it back to you.

  45. David Ristau
    October 18th, 2010 at 3:27 pm | PermalinkIgnore this user

    Jean -

    Send it to david.ristau@theoxengroup.com. Thank you.

  46. David Ristau
    October 18th, 2010 at 3:30 pm | PermalinkIgnore this user

    Oxen Alert – Play of the Week Goes Regional

     
    Buy of the Week: Huntington Bancshares Inc. (HBAN)
     
    Analysis: My family is full of bankers…lovely I know. My uncle is the Director of E-Commerce a Huntington, so I have a certain level of added respect for this company. I tell you this because I hope it does not cloud my judgment in any way. Anyways, Huntington Bank(HBAN) is slated to release their earnings on Thursday morning with an estimated EPS of 0.07 vs. a loss of 0.33 per share one year ago. This looks to be the company’s best quarter since 2008, and many of the banks that have already reported are showing that the core business of banks is actually improving despite what most critics have thought.
     
    Huntington, in my opinion, looks very solid moving into Q3 earnings. First off, we have seen some very solid results across the board for financial companies reporting thus far. Further, Huntington is fairly undervalued moving into a turn to profit. The company should make a move with a number of regional Midwest banks reporting this week that will help drive financials up in Huntington’s sector.
     
    For the quarter so far, nearly all reporting financial institutions have surprised in the right direction. The five reporting financial companies (JPM, First Horizon, Charles Schwab, Webster, Commerce Bank) have all met or beat earnings with four of those beating earnings. Nearly every company has noted they have seen much better credit, lower delinquencies, and improvements in nearly every aspect. One downside has been investment bankingsectors, but not many regional banks have much of their business in this sector.
     
    Huntington has limited investment banking, and I expect they will see a similar result as those that have reported thus far. Most of the fears on continued credit problems are mostly in the Southeast and Pacific areas. Huntington does most of its business throughout the Midwest. The company will be getting a boost throughout the week before its earnings not only from its own promising results, but the Midwest Regional Bank sector. US Bancorp (USB) and Comerica (CMA) are both slated to report earnings on Wednesday that should boost the sector. USB is expected to prove profits per share by over 35% and Comerica by 500% with a major turn to profit. 
     
    There are a lot of positive signs coming in the direction of financials despite what most would say. Deposits in retail and nonretail banks improved from $7.6 trillion in 2009 to $7.7 trillion at the same time in 2010 thus far. One of the most helpful improvements has not been the number of loans rising but credit quality of loans rising. Additionally, thecompany is looking towards the longterm rather than short term, which is a positive trend.
     
    From The Street, "In a note last month after Huntington met with investors and analysts in New York, Siefers wrote that Huntington’s management has made "a calculated bet" to give up short-term profits in the hope of gaining market share over the longer term with a more customer-friendly approach. ‘The risk,’ Siefers writes, ‘is a more customer-focused company that simply earns less than it did previously.’"
     
    One troubling statistic for Huntington is they are in a dwindling group of banks that still has not paid their TARP money. This to me is not a good sign of a company that has excessive profits and cash flow. The company has not done any capital raising as of late, which other banks have done, and they will most likely need to in order to pay it off. On the other hand, the company raised its auto financing from 5% to 11% through Q2 of 2010 from 2009. The auto industry has returned heavily, and this financing will add significant revenue streams to the company. The company has begun smart lending, and it is seeing credit improving.
     
    Overall, there is a lot of positive movement in the regional banks, and with Huntington’s current valuation, they can make 4-6%. The company has an RSI at only 46, which is below fair value, and it has moved down over the past few days. It did not get a rise today, which is somewhat concerning. On the other hand, the stock has very limited downside risk. The stock has only 2% downside to its lower band, while it has 6-7% upside. Another positive sign is that the company is seeing its bollinger bands narrow significantly right now. It is due for a breakout. I think with positive signs coming from USB and CMA, the company will make a major move this week. 
     
    We are not looking to hold into earnings, but I am fairly optimistic in that area as well.
     
    Entry: We are looking to get involved at 5.65 – 5.75.
     
    Exit: We are looking to gain 4-6%.
     
    Stop Loss: 5% on bottom.
     
    Good Investing!
     

    - David Ristau

  47. jeanc
    October 18th, 2010 at 3:30 pm | PermalinkIgnore this user

    on its way

  48. David Ristau
    October 18th, 2010 at 3:30 pm | PermalinkIgnore this user

    Looks like you all got the alert after all…good good.

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