Oxen Group Buy: Ultrashort Proshares Oil/Energy ETF (DUG)
by David Ristau - July 24th, 2009 9:31 am
Buy: Ultrashort Proshares Oil/Energy ETF (DUG)
Courtesy of David at the Oxen Group
For Friday, it will be interesting to see if the market can hold any type of rally with weak earnings turned in by market movers in Microsoft and American Express. Asia and Europe shook off these bad earnings, and the American markets are already set to open higher with better futures but will these gains be able to be sustained.
Overall, The Oxen Group does not believe that we have the technical capabilities to continue this rise on weak after hours earnings and little to no overly important market moving earnings reports. The one piece of data that really changes things is the Michigan Consumer Sentiment Index, which is released at 9:55 AM. If good, it could pump the markets for the next hour or so, but even then, that rally may die off as lots of sellers may be looking to take profits into the weekend. One market and ETF that could benefit from this feeling is the crude market. With bad economic data and a possible weak consumer sentiment index, the oil market may be ready to slide.
Even if the market opens higher, the upward momentum of the oil market and general market seems improbable. And even though Schlumberger beat expectations, their revenue was very weak and they saw weakened demand for exploration. The way to play DUG is if consumer sentiment is weak get in right away and ride out what should be a profit taking day. If its good, wait for the jump about 30-50 minutes after, buy in off a market high, and watch the market move the rest of the way downwards bringing down energy.
Entry: Recommend buying in based on consumer sentiment index explained above.
Exit: We recommend exiting after a 2-4% increase.
Stop Loss: We recommend a 3% stop loss on all buy in prices
Upper Resistance: 19.00
Note from Phil: DUG – I think they are cheap enough to make a nice buy/write here. Since they bottomed out at $15 when oil flew to $73, selling the Sept $15 puts naked for .75 is appealing. I just can’t see the market sustaining $75 oil this soon.
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What to Buy: ERY
by David Ristau - July 22nd, 2009 9:18 am
What to Buy: ERY
Today’s market, The Oxen Group thinks, may be a very important day. We have a lot of very important earnings released today, and if they are good, it challenges can the market continue to sustain a rally. Or, will it jump up and sell out throughout the day? If earnings are not good, the market will definitely be red.
One sector, however, that may be more predictable tomorrow is crude oil. In after hours, the American Petroleum Inc. said that oil inventories rose 3.1 million barrels last week, while analysts had expected that barrels were supposed to drop 2.0 million barrels. Even with a green Asia, oil prices dropped, which makes us think that even if the market gains tomorrow, oil prices will still be driven down by inventory information, raising the price of Direxion’s Daily Bear Oil and Energy ETF (ERY). If the market jumps out early on positive earnings, then wait to buy into ERY. We suspect that the market cannot hold another rally, and oil will be less impacted by this and more impacted by inventories, which if API’s information is any prediction of what the Energy Dept. will report, should send shockwaves into the oil market, helping out this inverse ETF.
This ETF has been so oversold and undervalued that any sign of lowered demand could severely weaken oil futures, thus ERY would be ready for a large swing upwards. Further, the only major oil news to come out is the inventories, and it should move the market. If futures are good going into the day wait before buying for the market to top out.
Entry: Recommend buying in 5-20 minutes into session or 30-50 depending on futures.
Exit: We recommend exiting after a 2-4% increase.
Stop Loss: We recommend a 3% stop loss on all buy in prices
Upper Resistance: 23.50
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Oxen Group: Buying St. Jude Medical
by David Ristau - July 21st, 2009 3:08 am
David says to go ahead an buy STJ now if you haven’t already. – Ilene
Oxen Group’s Buying St. Jude Medical (STJ)
Courtesy of David
The Oxen Group is liking the prospects for St. Jude Medical Inc. (STJ) for tomorrow. The market is definitely going to be decided by tomorrow morning’s earnings reports, so this recommendation is preliminary with an update to be posted tomorrow morning about exactly what we think will happen.
St. Jude is definitely looking bullish after medical device company Boston Scientific (BSX) posted very positive quarterly earnings with a 61% gain in profits. The rise came from high demand and sales of its cardiac device products. This should be positive for St. Jude because the company is also a medical device maker with a similar business. The company, additionally, is in a nice position to increase on the positive news that sent BSX up 6% in after hours. The company has not jumped in an overbought movement like many companies over the past week and a half. However, that movement in the market definitely means pullbacks will be occurring.
Tomorrow morning, important earnings from Caterpillar, Coca-Cola, State Street, Merck, and Southwest Airlines will decide the market. For St. Jude, Merck’s earnings are extremely important since it such a key healthcare stock. If those earnings are positive, watch for STJ to make a positive move. Unlike other healthcare companies that are relatively overbought and may peak out, STJ should not have that movement, which makes it positive. Check back though to see our morning update.
Entry: Recommend buying in 10-25 minutes into session.
Exit: We recommend exiting after a 2-4% increase.
Stop Loss: We recommend a 3% stop loss on all buy in prices
Upper Resistance: 40.75 – 41.00
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Oxen Group’s Trade of the Day: SRS
by David Ristau - July 16th, 2009 6:40 am
Buy Pick: SRS
Courtesy of David
The Oxen Group is liking a bearish market or at least a somewhat sideways market. The market has jumped up for three straight days, and a technical pullback with investors taking profits may be in order. One area that appears fundamentally bearish is the housing sector. Ultrashort Proshares Real Estate (SRS), which is a housing/commercial real estate ETF, looks to be bearish on a general market trend as well as news that foreclosures are continuing to rise to now 15% for the year and 33% in June.
The trend is not stabilizing, which while not directly affecting commercial real estate means that commercial real estate is in a tough spot, as well. Futures are currently registering in the red, and we did not have any large market moving earnings or news come out in after hours. Further, news that CIT Group has failed to get lending and will be filing bankruptcy shows that the recession may still be taking more victims. Many earnings are coming out in the morning, but not a marquis name that could really drive the market higher except perhaps JPMorganChase. Economic data being released could further influence a pullback if jobless claims come in under expectations. Even if jobless claims are good and JPMorgan is solid, investors will be looking to sell these stocks into this upward trend. SRS, however, is in the exact opposite boat. The ETF is extremely undervalued, just passed under a lower bollinger band, and is way oversold. Therefore, it is setting up for a perfect buying opportunity.
Entry: Recommend buying in 15-30 minutes into session.
Exit: We recommend exiting after a 2-5% increase.
Stop Loss: We recommend a 3% stop loss on all buy in prices
Upper Resistance: 21.00
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Buy Pick: Jackson Hewitt (JTX)
by David Ristau - June 30th, 2009 2:07 am
Buy Pick: Jackson Hewitt (JTX)
Courtesy of David at The Oxen Group
On Tuesday, The Oxen Group likes the prospects for Jackson Hewitt Tax Service Inc. (JTX). The company will benefit from the extremely bullish news that came from H&R Block in after hours as they beat earnings estimates with a positive earnings report. H&R Block reported better than expected profits, earnings over $700 million while last year the company only reported earnings of $543 million. The company beat Wall St.’s estimates, as well, earnings an EPS of 2.09, with The Oxen Group estimating an EPS of 2.06. The company saw better earnings with higher prices and more online processings. They did see less overall reports, but it appears that the tax services companies may fair better than expected. The company was not as optimistic as investors were as they sent the company up over 5% in after hours. The earnings rising 20% and Wall St. expectations will help JTX, tomorrow, as the company has a very similar business to H&R Block.
The market may make a move again, tomorrow. The futures are bullish currently, reflecting bullish news from Ford in after hours, as well as, expectations that consumer spending may reveal more positive results about the economy. If the market is bullish along with the HRB news, JTX will have a great day. The technicals, further, help the case for this stock. It is currently in an uptrend on stochastics, meaning more buyers are entering the stock than sellers. Further, the stock has lots of upper room on bollinger bands.
Watch for a pop and buy in on a pullback.
Entry: Recommend buying with first 10-25 minutes.
Exit: Exit on 2-4% increase
Resistance: Upper 7.00
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Buy Pick: RIMM
by David Ristau - June 26th, 2009 1:34 am
Courtesy of David at The Oxen Group
Buy Pick: RIMM
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Tomorrow, one sector that looks bullish is the smart phones. Extremely bullish earnings came out for Palm Inc. yesterday with the stock reporting higher earnings than expected, as well as, much higher revenue. The company reported an EPS of -0.40, compared to The Oxen Group’s expectations of an EPS of -0.64. The company released the Pre after the quarter, and these numbers are very positive going into the Pre selling season.
Further, tech news was bullish from Accenture Ltd., the technology information company that reported positive earnings. Even Micro Technologies beat estimates. With little economic data coming out tomorrow, besides personal spending reports, which are not expected to be market movers. The news of Palm should help move the market, tomorrow. Additionally, the crucial KB Homes earnings that could follow the positive earnings of Lennar Corp., could help the market move positively if they have positive earnings.
To play the Palm earnings, The Oxen Group is recommending Research in Motion Ltd. (RIMM) The company should benefit from the positive tech smartphone news, in the same way that Palm and Apple moved up significantly from the positive RIMM earnings last Friday. Research in Motion should not be adversely affected by the fact that Palm is gaining ground in the very short run. In the long run, it does hurt the stock, but with the tech running up tomorrow, RIMM will be moving. The technicals on RIMM are perfect for a move tomorrow. The stock is near a lower bollinger band, it is oversold after moving up on its positive earnings, and it is extremely undervalued on RSI. Look for a big move.
Entry: Recommended entering 5-25 minutes into trading day.
Exit: Recommend exiting after 2-5% increase.
Resistance: Upper 77.50
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Pick: Ultra Proshares Oil and Gas ETF (DIG)
by David Ristau - June 18th, 2009 2:19 am
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Pick: Ultra Proshares Oil and Gas ETF (DIG)
Courtesy of David at the Oxen Group
The Oxen Group, for Thursday, is optimistic to hope for a good day from the market. Too many red days even in a bearish trend, means a correction every few days. Tomorrow, futures are already up as investors may be getting excited about jobless claims, which have been bullish for the past few weeks. Additionally, Research in Motion will be releasing earnings that are expected to be very positive for the tech sector and TARP paybacks were successful.
The market is due for a fundamental correction, as there are some bargains presenting themselves again. One of these is oil, oil service companies, and oil ETFs. After oil prices have slipped, with a late small gain today, oil may be ready for a move on Thursday. Gasoline wholesale prices have continued to slip, which is signalling a pullback in gas prices. Further, oil may get a boost from a very bullish Chinese inventory announcement that shows the Chinese economy is pumping again, helping to increase oil prices in the Asian market. We like Ultra Proshares Oil &Gas (DIG) to rally, with major holdings in Exxon and Chevron, which have both been hit with losses for the past four days. DIG has lost 13% in the past four days and moved down too quickly, presenting an opportunity for money to pour into the stock. If jobless claims are bullish and gas prices rescind, investors will push this stock up as inventories really did not get a chance to increase the oil market, which was a bullish indicator. Oil looks ready to rise, therefore, BUY DIG!
Entry: Recommend buying within first 10-25 minutes.
Exit: We recommend exiting after a 2-4% increase.
Upper Resistance: 30.50
David’s Oxen Trade Results:
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW.