California Pizza Kitchen (CPKI) – 04-29-2009

April 29, 2009 at 10:41 pm · Filed Under Bearish, Value · Comments Off on California Pizza Kitchen (CPKI) – 04-29-2009 

CPKI Weekly Chart

Restaurants like CPKI, BJRI, and CAKE have all been on an absolute tear lately.  PNRA just got killed after hours for merely meeting expectations today, so I think the sector is showing that its hopes are a little too inflated.  If there is a market correction these will all be solid stocks to watch for short opportunities.

Triggers

  • Above $17 – note the 52 week breakout and consider playing if there’s a lot of consolidation between now and then (and the economy is better)
  • Below $14 – short

Berkshire Hathaway (BRKA or BRKB) – 03-09-2009

March 9, 2009 at 9:43 pm · Filed Under Bullish, Value · Comments Off on Berkshire Hathaway (BRKA or BRKB) – 03-09-2009 

BRKA Weekly Chart

The infamous Berkshire Hathaway, aka Warren Buffett’s company.  If you can’t afford the A shares you could always go for the B shares, which are exactly the same aside from voting rights.  You’d need a whole lot of BRKA for your vote to matter anyway, so no biggie.  So the good points of BRKA: they’ve been making some incredible deals and lowball offers that only Buffett could pull off; Buffett will continue to make those kinds of deals as the economy drops and more companies need it; Buffett’s previous picks have been generally good and are still solid (relatively).  And the bad points: they have way too big of a stake in most companies to be able to dump losers; too big to maintain growth rates; Buffett (and Munger) will not be around forever. 

I always wonder what effect it will have when Buffett and Munger are no longer running BRKA.  On the one hand, he’s been grooming his successor for a while now, but on the other hand, it’s pretty hard to replace Buffett and Munger even if you’ve been training for decades.  I’m sure the short term effects the day Buffett steps down will be tough to swallow either way.  No single person means more to their company than Buffett, aside from possibly Steve Jobs. 

Having said all that, if you were just going to be throwing money at the S&P 500 or some other index fund, you should probably consider BRKA when the market rebounds.  It’s not going to diverge from the general market direction, but it tends to outperform the market enough that it’s worthwhile.  That means the play is to watch this and just buy it whenever there’s a confirmed long term bull market and dump it whenever there’s a bear market.  Pretty simple, right?

Almost Family (AFAM) – 12-04-2008

December 5, 2008 at 12:34 am · Filed Under Bearish, Value · Comments Off on Almost Family (AFAM) – 12-04-2008 

AFAM Weekly Chart

I have professed my love for healthcare stocks in the past, and I still believe they’re good things to have on the watch list at least.  Almost Family provides home health care services and AFAM, the stock, has been sitting atop the IBD list for a little bit now.  Throughout the recent rough period, the stock has somehow managed to stay afloat, but I actually don’t think it can keep this up.  I would normally be very bullish on the long term prospects of a stock like this, but I’m not looking too hard at the long term right now.  As with all stocks that sit atop the IBD list for an extended period of time, this one will probably crash spectacularly at least once before it moves on to untold riches — that’s what forms double bottoms.  And that crash is exactly what we’re looking for in this market.

Triggers

  • Below $33 – short
  • Above $50 – shift lower watch point up; consider long if this is after a lengthy consolidation and the market is better by then

Oil Bubble Popped

November 11, 2008 at 1:00 am · Filed Under Bullish, Value · Comments Off on Oil Bubble Popped 

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Back in June I talked about the oil bubble that was forming.  That one turned out to be spot on, and as with most bubbles, the pop tends to push the oversold state to the extreme too.  Once again, don’t buy oil against the trend since it could easily see $30 before it turns around.  Demand is shrinking, but so is OPEC output and eventually they’ll find their sweet spot again.  This is one industry where I wouldn’t mind trading against the general market direction, so at least it gives an interesting long that has potential to do something within the next couple years.

Triggers

  • Breakout Above $80 – Long term buy
  • Below $55 – Shift breakout points according to monthly trend line

99 Cents Only Stores (NDN) – 11-07-2008

November 9, 2008 at 12:26 am · Filed Under Bearish, Swing Trades, Value · Comments Off on 99 Cents Only Stores (NDN) – 11-07-2008 

NDN Daily Chart

NDN has been following all the discount retail stores, like DLTR and FDO, whose stocks have been doing quite well in the current economic crisis.  The thinking goes, if people have less money they’ll go shop at places where they can get bargains.  If you check out the numbers on NDN though, they haven’t done enough to justify bucking the market trend.  Revenues are up a little, margins are horrible.  Now is probably not the time to be attempting a retail expansion, and I don’t see anything in them that tells me they’re that much better than the average corporation under these conditions. 

I don’t trade against trends, but if the industry gets more overbought this one should be an interesting swing trade in the down trend.  Remember, look for industry trends and then look for the best candidates within that industry.  In this case, wait for the discount retailer industry to hit the down trend and then look for the weakest company, NDN right now, to swing trade. 

Triggers

  • Below $10.50 – swing trade short
  • Above $12.50 – shift lower watch point up

Mosaic (MOS) – 10-17-2008

October 17, 2008 at 2:11 pm · Filed Under Bullish, Value · Comments Off on Mosaic (MOS) – 10-17-2008 

MOS Weekly Chart

This is another one where I’m looking at a group of stocks and not just MOS.  Include AGU, POT, TRA, and any of the other hot agricultural stocks from the past year here too.  After starting out good in 2006, then bumping up the slope in 2007, and then just exploding into 2008, these stocks have all gotten beaten back down to the ground over the past month.  Maybe the drop will continue and you’ll be able to get in to this one at 20 again.  Or maybe it’s already too cheap so it will consolidate here.  Either way, this is definitely a sector to watch closely over the next year.

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