We are almost two months into the new year and many of us have been asking the same question. Is this the kind of market we have been expecting? The truth is, nobody can really answer this question. Just like an individual stock, the overall market would spend most of its time in the consolidation mode. It seems we have been stuck in this mode for the longest time. Unfortunately, there's really not much we can do about this and we can only do our best to cope with this situation. Today it started off as if the market wants to go down hard but it ended up in a meaningless way. Our DJIM stocks have fared better than most in this market environment and this is the exact sort of things we liked to see to end our trading day. Here are some highlights...
FSLR TSL JASO, even though we are grouping these three together since they are all solar plays, we do have to point out that FSLR is the only one that we have considered as an earning plays. Solar plays are hot and there's no doubt about that. We think these three represent the best in the solar trading world where both the liquidity and technical signs are top rated.
CSV, this little funeral service stock broke out today on pretty convincing volume. We didn't think those insider buying was meaningless so we added then and again some today. It's hard to speculate how high the institutions will take this one up to but one thing we can all agree about its business is that "it's just a proven business".
BW OEH VTRU HURC TRT CGX, again we are grouping these together b/c these are familiar names that always seem to outperform the rest of the market. Steady as she goes! It's nice to have a 20%+ mover in your portfolio but it's the steadiness of some of our stocks that make our portfolio really shine. All these have been early earning buys this Q at DJIM and OEH, is a sec play on other hotel earnings plays that came out with nice reports. Now, it gets some takeover speculation with the CEO departure. We thought this speculation was already underway due to industry conditions and company internals, today Bear Stearns added some fuel to it.
CENX survived earning with a NCH to boot and shows this aluminum play is looking for its 52 wk highs down the road. A couple of recent faves CCF, HMIN are now over 9ema and back on close watch.
Things are definitely looking pretty rosy at this moment and we have seen no shortage of leaders among the stocks on our watchlist on a daily basis. Does this mean that we are committing heavily into this market? At this point, we feel we are committing more capital but only on a selective basis. Things can get out of hand when you add too many positions and it's easy to lose track of things. A good strategy is to limit our portfolio to a certain number of positions. For example, when we get to near the close of the trading day, we always ask ourselves a question, "are we going to be holding the best 10 stocks on my screen overnight?" If things do check out then we can end the day happy but if one or two stocks seem like a laggard then we just cut them lose or replace them as in a CXW yesterday. This is of course assuming the market is still in a pretty good stand and there are stocks on our watchlist that are outperforming. Basically the point is that we are always extremely picky about what we hold in our portfolio and this means ...yep, we'll say it again thanks to MFW finance biz...no holding into earning.