September 6, 2013

Follow Up on the Baltic Dry Index and Shippers

I made a post on the Baltic dry Index early this year as it looked like it was possibly forming a bottom. Some people believe the index to be an economic leading indicator. I did some subsequent posts on some shipping stocks. Well, the bottom finally came on the Baltic Dry Index and it looks like a bullsih consolidation. It has just so slightly broken out of the trading range it has been in all year. I put up a chart that shows the breakout of the range and retest. We've just retested and it's still moving strong here. Shippers like ESEA, PRGN, DRYS have some very nice momentum charts. A lot of them are coming off high flags like GNK, BALT and SBLK. My favorites are Euroseas ESEA and Dryships DRYS.

August 16, 2013

VIX Setup and Market Direction

After one heck of a run in the major indices this year it's time for a pull-back. At the least a healthy consolidation. I drew up the charts for this post about a day ago and the VIX spiked 12% since then. Briefly, the VIX I believe should spike and the vehicle I like for it is ticker symbol (TVIX) Velocity Shares Daily 2 X long VIX. We are still around the bottom of the trading range for VIX as the chart below shows. Also, there is a lot of room for a pull-back in the S&P 500 as the trend line below shows. So, a correction should ensue. Another major turn of events that very well could and should prompt a pull-back is the FED decreasing its bond buying which they have hinted at lately.

July 15, 2013

Solar and Alternative Energy Stocks

The alternative energy sector is continuing to perform well. I found a couple small companies with good charts that I like. Primarily I like the charts. Jinko Solar (JKS) is one of the solars I posted on Twitter awhile back and it ran 17% today on good volume.

The first new one is Ballard Power Systems (BLDP) with a market cap of around 200 million. BLDP sells fuel cells which is a very promising alternative energy. The stock price just broke out of a triangle consolidation.

The second one I like is Suntech Power (STP). STP is a 250 million dollar company that also just broke out of a long triangle. Both of these stocks look ready to keep running.

July 7, 2013

MEET Flag Setup

I've had MeetMe Inc. ticker MEET on my watchlist since it made that big run about a week ago. It's started a flag on Fridays run with light sell volume on the flag and looks poised to continue to run again. I am going to put a buy stop order in at 1.87 a share. I also added LEE XXII JKS to the watchlist.

July 6, 2013

Trading Range Breakout For Crude Oil

This is a followup to the post I did on crude oil in June. The triangular consolidation on crude had been forming for a long time. Crude finally broke out of the ascending triangle. This is a very bullish chart still and I wouldn't be surprised to see a 110 retest. Triangles are very powerful chart signals. I drew up a new chart and I posted it below. The trend line breakdown I circled was very telling of what direction it was heading. That was definitely a failed signal.

I sold my KWT solar etf position for a slight loss at $46. I didn't get an ideal entry and didn't like the price action so a stop loss is a stop loss. I'm thinking of uploading some video posts in the near future here. I'm looking for a good desktop video software so I can show what I'm talking about simultaneously.

June 25, 2013

Net Net SORL

I recently looked through a lot of NCAV net-net's. These are stocks with market caps below net current assets. The most compelling recent net-net I noticed is a company called SORL Auto Parts.

SORL Auto Parts (SORL) is a Chinese company that develops, manufactures and distributes automotive brake systems and other key safety related auto parts to automotive original equipment manufacturers, and the related aftermarket both in China and aboard. The Company’s products are used in different types of commercial vehicles, such as trucks and buses. SORL is trading below net current asset value and is profitable. It even has earnings growth.

Crunching numbers straight from their annual 10-K filing the market cap is $51 million and net current assets are 124 million. At the current stock price of 2.65 it is trading 41% below net current asset value. Cash has also been stable over the past couple years which is good. Moving from the balance sheet to the income statement we find earnings and a current PE ratio of 4. The PEG ratio (price to estimated earnings growth) is incredibly nice at .89 over the next 5 years. In 2012 the company had free cash flow of around 29 million for the year.

The stock had a big run from 1.80 a share in Sept of last year all the way to 4.00 in February of this year.

June 14, 2013

Crude Oil Chart and Position Update

I'm long KWT the solar ETF from a $49 entry. I have a mental stop loss of $46 a share. Around $38 a share is more of an ideal stop area because it is below the old resistance from Fall of 2012. I run a lot of Stockfetcher scans throughout the week and there are a lot of long setups that keep popping up as the market is still in bull mode. I only scan for stocks priced from pennies to $10 a share. This pull-back in the major indices looks like just a consolidation right now after that huge run-up.

I try and follow crude oil regularly. I've posted up a chart that shows the resistance level that crude has failed to break through over the past 12 months. Along the way from where the price is from the summer of 2012 there has been some triangular consolidation that you can see in the chart.

The short-term chart technicals clearly say to get short right here. If I actively traded CL futures the stance here is definitely short biased. We will have to see what becomes of the triangular consolidation over the coming weeks. It may be very telling.

May 18, 2013

Solar Stocks Play

Solar stocks are continuing to deliver big returns lately. One way to invest in the solar sector is Market Vectors Solar Energy ETF (KWT) or the Guggenheim ETF (TAN). The Guggenheim TAN is more overweight First Solar FSLR and it's price fluctuates more in lockstep with the stock. I like KWT more because it's not so heavily invested in FSLR. I wouldn't be surprised to see more double digit returns from solar as a sector this year. Technically, the charts on solar as a sector look very bullish here. See the picture below. I see a lot more upside. Of course, with big run-ups in all solar stocks across the board some stocks not so worthy of such high multiples will eventually fade out. I remember the big run in solar around 2007 and 2008 and the ridiculous multiples pegged on even the best companies. Some of the PE ratios were totally insane like Nasdaq bubble of the year 2000 insane and of course they eventually came down to reality. I'll be looking for some good shorts eventually after the momentum continues. The momentum is going to continue for awhile though.

May 4, 2013

Deep Value Stock PRLS

I find Peerless Systems (PRLS) to be one the more compelling net current asset stocks I currently know of. The company has a market cap of $10.1 million. There is $4.58 per share in net current asset value and $1.77 in net cash per share. The stock last traded at $3.35 per share. They've repurchased a lot stock over the past couple years. The company has bought in aggregate 482,111 shares of stock or $1.8 million in fiscal 2013. Additionally, from February 1st of this year to April 23, 2013 they repurchased $230,652 of stock.

April 15, 2013

Caribou Coffee Bought By Private Equity For $340 Mil

I recently read that Caribou Coffee was purchased by a private equity company for $340 million. This is surprising yet at the same time not all that surprising to see the second biggest coffee chain next to Starbucks get bought out. People have been speculating on a buyout for years. I've been writing about Caribou Coffee (former ticker symbol CBOU) since 2009 here on the blog. I remember back in either 2009 or 2010 Caribou was actually trading for not that much over its net tangible equity value. The recent purchase price was for over 30 times earnings.