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January 9, 2014

Crude Oil Commentary: Bulls in Charge





To start I will do a recap on some of the stocks I've posted on lately. One that continues to surprise is Plug Power PLUG. I posted it when it was around $1.75 a share. It printed $4.90 today! ETRM followed through too. Interestingly enough Delcath Systems DCTH bottomed out around net current asset value.

Now on to crude oil. There is a long setup now as it is back on trend support. When it comes to crude we have to be bullish right? For starters there is the inflation piece. Over decades the majority of oil's gains are attributed to inflation. Will there be inflation short-term? I definitely believe so. With more dollar debasement on the horizon I think inflation is more likely here than deflation. Let's even say one drinks the FED's Koolaid and would rather go on CPI, M1 or M2. Still looks like inflation to me. Unemployment is down and the economy is a little better. So I think the fundamental bullish case is sound and the long setup is here again in the charts.















We are back on trend support folks. It will be interesting to see how the price acts around trend support here but this is still a long setup whether the signal fails or not.















Now a slightly longer-term chart. You can see the rock solid support. Vehicles to trade oil include the futures outright CL, ETF's USO and USL. USL has longer contracts so there is less decay than USO.

disclosure: no positions in any stocks mentioned

December 30, 2013

Some Quick Charts: Metals etc.

Last week the high beta stuff was back in play. The rare earth elements and metals. Oh, and don't forget the shippers. If I've been right about anything lately it was that the shippers had bottomed. DRYS is very correlated with the index. It's a good one. One of the stocks I've had my eyes on lately is former net-net Infosonics IFON. The stock is usually very thin but a few days ago I noticed it was in-play as the volatility and volume suddenly appeared. So it's no longer in net current asset territory, however, it's moving lately. They got a notice of failure to maintain the Nasdaq'a minimum price per share above $1. Other than that I don't know of any significant news around the time the surge began.















Another flag is starting as it consolidates from that huge run the other day.

ENG is consolidating and this looks like a long flag here. The stock is up so much over the last 6 months that it seems like buying would be chasing. This is just such a perfect flag here that any break above it could get some good follow though I would imagine. We'll see though. ENG has a nice balance sheet.














Tasman Metals TAS is a junior resource company engaged in the acquisition and exploration of rare earth elements and tungsten in Scandinavia. TAS has a great chart going. It's in a nice slow uptrend and just tested trend support and held on volume. This is going higher. Over 1.10 soon.

December 11, 2013

What I Use for Stock Screens and a Trading Watchlist

Everyday after the market has closed I try to run though atleast 80 to 100 charts with my custom scans on Stockfetcher.com. I just use pure technical and statistical screens. I don't screen any fundamentals on Stockfetcher. For fundamentals these days I just us Graham Investor and look at NCAV stocks.

A perfect scenario when I'm scanning is to find a good looking chart first on Stockfetcher that also is a net current asset stock or deep value around net tangible assets. There continues to be a lot of stocks moving in the alternative energy industry. I've had Plug Power PLUG keep popping up in scans but I missed the last big run. I'm still watching it though. Fuel Cell FCEL has a good chart going too. If I were going to be daytrading tomorrow I would have ETRM on watch with a long bias. This is a very clean flag right here.














For possible position trades

I really like Vapor Corp VPCO. They sell electronic cigarettes. Electronic cigs are a winning industry of the future. It looks poised to breakout here again.

Delcath Systems DCTH is hovering right around net current asset value. On the balance sheet there was about $25 million in net current assets. The market cap is right around there here at $.24 a share. It's in breakdown mode so more lows look like they are coming.

Star Scientific STSI has had some bad news lately. I see it as a contrarian play in the low $1 a share area. This stock in the 10 years I pulled up price history in yahoo has always bottomed around $1 a share.

November 12, 2013

Wandering in Deep Value Land




As many of you know Benjamin Graham had a famous style of investing that sought to purchase deep value stocks selling for large discounts to their net current asset value. It's also called the cigar butt approach. You find these cigar butts laying around and sometimes they are good for one last puff. There are different kinds of deep asset value stocks. There are the cheap for a good reason and then there are the cheap with good potential. The deep value companies in industries that typically turn into deep value traps are biotech and semi-conductors. So many of these have traded for huge discounts to net current assets and even had some profitability but the stocks never come around.
Some of the best net current asset stocks I've seen tend to be in businesses with simply better business fundamentals. A lot of these will even have a "brand moat" they can in-circle around their little castles while working to bring the company back from the gutter. An example of one of these former net current asset stocks that turned around was sports retailer Finish Line years back.
The first stock I am going to look at today is SkyPeople Fruit Juice (SPU). It is in China so I proceed with caution. SPU trades on the Nasdaq and has a market cap of $51 million. It is in net current asset deep value territory because the company has $66 million in net current asset value. I simply took the $200 million in current assets and subtracted the 36 million in total liabilities. So, we are at a discount to NCAV. I bring this one up because cash has been extremely stable.
The next one is Books a Million (BAMM). BAMM has a market cap of $36 million and net current asset value of $21 million. We are not in NCAV land yet but this is something to watch. The stock currently trades at $2.46 per share and NCAV is $1.4 a share. Net tangible asset value is $6.50 a share.
Disclosure: no position in SkyPeople Fruit Juice SPU or Books a Million BAMM at time of writing.

October 16, 2013

Thoughts on Markets During This Political Event

With all the talk of a possible currency semi-crisis from a default I really don't see any markets taking that threat seriously. The US dollar index is still pretty far from its two year lows. This even considering all the quantitative easing that has been going on since those lows. The news media of course blows any movement in the major indices like the Dow Jones out of proportion. It really hasn't been that volatile. 100 point swings! Ohh my! Today saw one of the bigger spikes in the VIX up about 16%.

There are still a lot of stocks in play out there hitting some highs. Something entertaining happened the first week of October. A lot of people thought Twitter's IPO ticker symbol was TWTRQ. TWTRQ in fact was a pink sheet company called Tweeter Home Entertainment. The stock ran up 1,000% on huge volume.

I've noticed a lot Chinese stocks are in play lately. This company called Vision China Media is up so much here. To much I think. It's going supernova now and I believe there is going to be a lot to short once it starts to break a previous days low of the day.

Disclosure: No position in VISN, long TVIX