Mike's Top Picks!

Discussion in 'Stocks' started by michaelscott, Apr 28, 2007.

  1. I am going to consolidate all my posts into one thread because they are seemingly littering up the stock board. The reason why Im posting this up is because Im actually going to throw money at these picks and want to get different opinions.

    For my first obvious pick is JBLU.

    JBLU is nearing the 9.50 price point where I believe it could be bought. I wouldnt buy it though unless is started to a convincing bounce. Dont try to fade this.

    If the pitch of the lower trend line stays the same, then a parallel trend line to the bottom will yield a target price of 13.5.

    If we reverse engineer the head and expect a 1/2 reaction rally, then we see the following:

    17.02-9.5= 7.52

    7.52/2= 3.76+9.5= 13.26

    There were two distinct high volume 30+million share dumps in the last few months telling me that some overhead supply was eliminated.

    Once it gets into the 13s, then its time to let JBLU loose and observe where the pivot point will lie. If the equity breaks over 14, then its time to long it. Price target will then become 17.02+9=26.02 *assuming* it can make it north of 17.02.

    If it pivots off of 13.5 and goes below 13, then short it back to the 9s-10s. Then find the next pivot point. If it turns upward from there, then it will probably make for the 17 dollar line. If it turns downward, then JBLU will go bankrupt and fly into the pinks as oil moves towards my $100+ target.

    Notice the pattern on the macro 3 year chart. It goes to 17 dollars, then turns around, then there is a reaction rally and then its back to 17 dollars. 3 tries for the resistance is the charm in which a breakout could occur or we fall back down like it was February 2007.

    The macro trend on the chart is a sloppy reverse head and shoulders.

    This is not a quick in and out trade. Last year it went from 8.93 to 12.92 from May until July. Thats also a trend to be aware of. JBLU usually reaches its bottom at this time of year. This is good and bad. Once JBLU turns the corner, you know its not suddenly going to dump down like a bad .OB stock. There will be time to think. However, you will have to be patient. I say

    Checking the airline index, I believe we may be at a yearly bottom.

    http://stockcharts.com/charts/gallery.html?$XAL

    In conclusion, wait for the pivot under 10 and then long it on a convincing pivot. Dont attempt to fade it.

    Then short it on a convincing pivot at 13.5. Then its back down to the 9s-10s where you cover. Then look for a pivot and long for another ride.

    If its done correctly, then you can make a 270% return in one year.

    10-13. Long at 10 and sell at 13. 30%

    13-10. Short at 13 and cover at 10. 30%

    10-16. Long back at 10 and then sell at 16.

    Airline stocks are very risky and I highly suggest not attempting to fade any of the pivots. Wait for a convincing bounce before throwing your money at it.

    It was announced that Soros got in on JBLU.
     
  2. Here is another good one. A break above 80 will put the target price at 120. I would wait for a convincing close above 80... 82-85 range and then long it to the target range, then dump because the pattern will be complete. Do not fade this trade. Wait for convincing closes above the resistance.

    Its a slow chart so it will probably take 3-6 months to get to 120 on any close above 80. I'll take that trade however. Thats like an 8 dollar stock going to 12 dollars. 50 percent return.
     
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  3. BIDU

    I want this to fill the gap down to 113 before longing. Any close above 134 and the price is headed to 224.

    I say to wait for the price to burn down to the upper Bollinger channel before going long. Right now the upper line is still at 113.

    I say 224 in 12-15 months if done correctly.

    I expect it to take some days to weeks to burn in to 113. We need a healthy retracement and to fill that gap before we can move forward as a bull.

    This is not a fast chart and it may take 1.5 years to reach my target. Nevertheless, double your money in that period of time is not bad. I will take that.

    When it gets to 224, then I would sell it.
     
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  4. Gold

    I believe a pullback is in order. That pullback will be

    698-((730-542)/2)= 604

    Then there will be an advance that might break the top. In the event of a close over 698 then we have a price target of 698+188= 886

    The next Fed meeting will set off the correction to the 50% retracement point. This also makes sense when you connect the 2006 bottoms of 542 and 563 on the chart together. It may not get to 604, probably low 600s. Then it will be time to buy into the AU gold etf.

    Notice the Bollinger Bands on the chart and how well they work with gold. A smack on the top means that the price will deflect and make for the middle. If the middle is invaded, then the price will smack the bottom Bollinger line.

    My opinion of Gold is that the chart is starting to look like a tech stock from 1999-2000. There is this mania on the televisions and it seems so familiar to 2000. Everyone was saying to buy tech back in 1999-2000, now its gold.

    I think money can be made from this trade, but it just seems too familiar with 1999 tech bubble. I'll pass.
     
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  5. NYX

    Bounce off of 85, my target becomes 98. Then when it pivots off of 98, my target becomes 70. Go long at 70 and then my price target becomes 112. A break through 112 and my target becomes 175.
     
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  6. Here is a free 36% return in 12 months. The S&P 400 is going to climb to 1028 in 12 months by my calculations or an 18 percent rise from where its at currently.

    The UltraMid-Cap is a leveraged fund and provides double the exposure.

    http://www.profunds.com/profiles/profile.asp?id=39

    Here is a 38% return in 12 months.

    http://www.profunds.com/profiles/profile.asp?id=36

    Here is yet another 12 month 38% return.

    http://www.profunds.com/profiles/profile.asp?id=26

    This corresponds to the cup/handle thesis. The height of the cup added to brim will get you the target price. Currently all the indexes are in breakout mode. Once the indexes reach their target price then there is no guarantee after that. I say sell when the target is reached and wait for a pullback.
     
  7. This is called a "journal." Why don't you move it there? (please)
     
  8. Calculating the next correction

    I believe its fairly important to know when to pull your cash back out of the market. If you know when, then you can enjoy buying at the low of the market and then making incredible gains when the market ultimately recovers. If you had pulled your money out of the market in January and then came in in March, then you would be enjoying a great gain right about now.

    Therefore, I study certain tried and true indicators. The premise of any bull market in a stock or index is the following. It will go up by a set amount and then pullback by a fraction of that set amount and then advance by the previous set amount. The pullback is usually 50% of the advance, but sometimes 33% or 66%.

    For example, the Russell 3000 went from 776.13 to 707.22 in May of 2006. 776.13-707.22= 68.91, 68.91+776.13= 845.04. Actual point of correction= 853.98. You can go back and backtest this theory through the various corrections and you will see that its sound logic.

    Now this isnt a perfect theory, but it gives you a hint when to take shelter.

    So in studying the Russells we know the following are points where we should take warning if the above theory holds correct.

    I have two numbers, because there are two theories that I have in regards.

    Russell 3000 Total Market=
    913.08 February peak (853) minus March bottom (794.88) plus the February peak (853)

    1000.74 February peak (853) minus May 2006 bottom (707.22) plus February peak (853)

    Present rate of rise from March bottom is about 38 points per month. Assuming that the present rate will persist, then we have about 1 and a half months using the 913 number. Then with the 1000 number we have about 3.5 months.

    Now with the 1000 number we get the following
    1000-794.88= 205.12

    205.12x.5= 102.56
    205.12X.66= 135.37

    102.56/1000.74= 10% correction
    135.37/1000.74= 13.5% correction

    Now with the 913 number we come upon the following

    913.08-794.88= 118.20

    118.20X.5= 59.1
    118.20X.66= 78.0

    78/913= 8.5% correction
    59/913= 6.4% correction

    So what we can conclude is that the next correction will either be in July or September and that it will probably range in depth from 6.4% at the low to 13.5% at the high.

    In using another theory, the bullish percent indexes. We can see certain relationships forming.

    http://stockcharts.com/h-sc/ui?s=$BPCOMPQ&p=W&b=1&g=0&id=p22490875652

    When the BP index for the Nasdaq composite hits the roof of the Bollinger Channel then its time to be, well, afraid.

    This, however, wont happen probably for 1-3.5 months which confirms the above theory. Note that the chart at stockcharts is a weekly chart. 1 candlestick=1 week. The chart right now does appear close to the top, but you can see where these charts chopped in the past before making a decision.

    As for the grand finale to this bull run, I do have a theory as well. It may not be a bear market, but it will be another year 2000 type correction.

    The S&P 500 was at 62.52 in July of 1974.

    1552.87-62.52= 1490.35

    1490.35/2= 745.18

    1552.87-745.18= 807.69

    Actual low was July of 2002 at 775.68.

    Therefore 775.68+1490.35= 2266.03

    2266.03-1494.07= 771.96

    Therefore when the S&P500 strikes 2200, then you should be taking your cash out of the market and be preparing for the next measured move.

    Using the rate of climb for the last 3 years, I project that this next peak will probably occur in 3.5 years. Thats why I said to go ahead and pile into the Ultrafunds. There will be dips along the way to 2200, but thats a 47% return along the way. Using the Ultrafunds will yield you double that return.

    Assuming the next correction will be a continuation of the run from 1974, we come up with the following:

    2266.03-775.68= 1490.36

    1490.36/2= 745.18

    2266.03-745.18= 1520.85 or a 49% correction


    We can conclude that the next correction will probably happen in 2010 and the bottom will be around 1520. This isnt a bad thing as long as you are on the right side of the trade. There are also Ultrabear funds too.

    Interestingly enough, the following link has been posted on this site many times:

    http://www.mises.org/journals/qjae/pdf/qjae8_1_4.pdf

    http://en.wikipedia.org/wiki/Freedom_Tower#Height

    While I seldom like to use anecdotal data, the coincidence between the completion date of the Freedom Tower and my calculations are uncanny.

    The next question is will it be the end of the bull market and the start of a long bear one or will it be a continuation of the previous trend?

    There really has not been a bear in the history of the S&P 500. If you go along this chart. All of the dips have been buying opportunites. Along the way, there have been some grand dips like 1972-1974 and 2000-2002, but those only proved to be great buying opportunities that turned a lot of folks into millionaires.

    http://finance.yahoo.com/charts#chart1:symbol=^gspc;range=my;indicator=volume;charttype=line;crosshair=on;logscale=on;source=undefined

    Therefore the next grand dip will occur probably in 2010 and last 2 years. 2012 will be the time to buy again.
     
  9. Lots of research this weekend.

    Morgan Stanley MS Target: 115.03
    JPMorgan JPM 66.39
    Goldman Sachs GS 309

    Their 20 week moving average has crossed above the 50. When this has happened for these equities, then it means months of appreciation. The move to their target price will occur over the next 6 months.

    The floundering of the Goldman Sachs common stock has predicted every major correction in the last few years. Watch this stock very closely. Look at how it started floundering days before all of the corrections.

    As Goldman approaches 300, then start getting worried.

    This lends credibility to my theory that a correction will most likely occur in September/October.
     
  10. BRLC

    This is a stock that traditionally has its strongest time in the last 6 months of the year. You buy it in June and sell it in December. Its not a buy right now, but a monitor right now.

    The stock has been floundering about and it should have tanked to 3-4 dollars. However, something is propping it up. We'll monitor to see which way it goes.

    NILE

    This stock seems to be at the top. Im calculating that it could fall 10 or more dollars. However, something is propping it up too.

    This time of year Christmas and Valentines day have passed and everyone's moving on to other plays. Conference call is on May 7th and they are bidding it up all the way to the 7th it appears.

    I cant justify it going much higher then the current level either fundamentally or technically.

    When it does come down, then we will consider it for a long position in June and then dump in Christmas.

    Something must be going on behind the curtains at Nile. Not sure what it is, but I wont jump in at this level.

    HAUP

    Another one that usually starts finding a bottom in the next 3-4 months and then runs up into Christmas.
     
    #10     Apr 29, 2007