8.7 C
New York
Thursday, March 28, 2024

The Oxen Report: Lack of Economic Data Causing Bears to Rally

We started out the new month and return from vacation with a dud it appears. Family Dollar Stores (FDO) reported a nice quarterly profit that beat expectations and was significantly better than one year ago at 0.77 EPS. Yet, the company did not forecast as good of a next quarter as was anticipated, and the stock has been rocked down 5% in pre-market. I am going to just get out of this one and take my licks. It was a poor decision on my part to get involved in this one, and we will just have to live with it. Get out ASAP!

On the docket today is relatively nothing for American investors. We have barely any economic data coming out, only one earnings report in Family Dollar, and relatively no other news to spark my palate that can move the entire market. Therefore, futures are down, and with the trend being sell off as of late, it appears we will continue that trend.

The following chart was made in 2007…before the crisis. See how far off the joint venture is on its combined projections…

 

Buy Pick of the Day: Sirius XM Radio Inc. (SIRI)

Analysis: I barely ever look at anything that moves below $4- $5 per share because these stocks are so unpredictable and high risk (even for me). Today, however, the market is really in disarray. There is a lot of bearish sentiment with some overbought inverse ETFs that are down and a lot of stocks looking up. Yet, futures are pointing down. A lot does not line up, and it will be interesting to see where it all goes today. One thing I do know though is that Sirius XM Radio has a lot of reason to celebrate, and we want to get in on the party with SIRI.

This morning, SIRI announced that it added over 500,000 new subscribers in its FY Q2. This was a huge upgrade from one year ago when the company lost 186,000 subscribers. The 500,000 are part of what SIRI expects to be a great year of new membership that will definitely break 1 million new subscribers. The company also hit a record high total membership at 19.5 million in the Q2. The company has been helped by a turnaround in both the economy and auto sales. Since Sirius comes standard in many cars and auto sales are booming, it is helping SIRI tremendously. 

The stock could use the help. In the long run, SIRI has moved from what was a cheap stock to a penny stock. Yet, the company is an everyday name with a strong brand. It is a peculiar penny stock that is not full of pharmaceutical speculation or just coming out of bankruptcy. The stock dropped over 10% in the past couple weeks and is definitely oversold at this point.

This play is not for everyone, and it is risky in today’s market of uncertainty. Yet, I want to get this one below $1, and we only need it to move to just above $1 to make a nice return. I want to buy right at the beginning of the day for below $1 and hope for a quick boost and get out. Futures continue to move up towards the green, which is allaying my fears. This stock has tons of potential to the upside and could catch like a wildfire this morning, so watch out for that. RSI is at a very low level at 30, and fast stochastics just crossed to begin an ascent out of oversold…two good signs of a rebound.

Good luck with SIRI!

Entry: We are looking to enter at 0.95 – 0.99

Exit: We are looking to exit on a 2-4% gain.

Stop Loss: None set but will watch and comment.

 

Short Sale of the Day: JA Solar Holdings Ltd. (JASO)

Analysis: You can’t fight momentum in the market. When something gets too good to be true, it is. That is the case with JA Solar (JASO) today. JASO has moved up over 20% in just four days after the company had a slew of important announcements that it would be working with MEMC Electronics and buying a smaller solar company in China. The stock looked strong yesterday, but with the market looking slightly down, the toppiness of JASO has gotten ahead of the bull run.

Solar is an extremely volatile sector, which is probably why I love it. These stocks move with great strides up and down. Catch it on an upstream, and you feel like a genius. Catch it as its falling, and you will be tested on patience. Today, we want to catch this one on its downstream, but we do not need to test patience…except for when to cover.

JASO has hit its upper bollinger band. Its fast stochastics’ K and D are moving back together after seperating to move up into the overbought area. The RSI has hit the red alarm level of 80 as well. This one is extremely overvalued in the short term, and profit taking must occur. The technicals are all pointing to a sell off.

The fundamentals of the market are not helping as well. The foreign markets are having a poor day, and when that happens it is not good for solar. JASO is linked to both China as its home and Germany as its top selling country. Both nations had poor showings on the market stage today. Further, it typically does not help bigger companies when they buy smaller companies. JASO’s latest acquisition actually will most likely in the short term harm the company. It is especially hurtful because they bought the chairman’s own company…SCANDAL…anyone.

Put in a short sale at the open even if it opens below our range.

Entry: We are looking to enter at 5.20 – 5.30

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

Stop Loss: 3% on bottom.

21 COMMENTS

Subscribe
Notify of
21 Comments
Inline Feedbacks
View all comments

Stay Connected

157,450FansLike
396,312FollowersFollow
2,280SubscribersSubscribe

Latest Articles

21
0
Would love your thoughts, please comment.x
()
x