Market Chasers

Market Recap: August 20th, 2008

Man what the hell happened today. All my puts were making money this morning but the DJIA as well as the bulls found some way to end the day in the green. To show how I felt through the day, here is a nice graph describing how it was:

Got up this morning at 8 AM and at 8:30 I was absolutely ecstatic, marked by the smiley face drawn on the chart. I left my house and when I went on my computer next at around 11 AM, I was like WTF. This is marked by my sad face. The market then hovered around the unchanged for a bit and I was a bit befuddled before we saw a big bull run in the last half hour of trading. This is again marked by the sad face in the picture. Banks flew today in the higher direction, definitely something I didn’t want.

Thanks for reading.

-Justin Moon, Senior writer for Marketchasers.com

Posted in Ramblings | No Comments »

Personal Portfolio Play: August 20th, 2008

I have been following Cummins International (CMI) since Jim Cramer recommended it on his show a few months back. Got to love the Cramer effect :)…. This is why I bought in:

We have a converging triangle formation and saw a downside breakdown yesterday. Lets see this company fall.

Bought some October 60 puts this morning at $66.33 and it has been plummeting ever since. There is a huge sell off this morning in all of the indexes except we are viewing some strength in the NASDAQ. All my puts are making money! If you guys followed my idea to call Companhia Vale do Rio Doce (RIO), the calls have been doing nicely.

I decided to sell off my stake in General Electric (GE) for a bit because I feel it has a chance to take a big hit in the next month or two. The break in the Dow Jones Industrial Average ascending wedge, GE’s heavy weighing on the index as well as 40% of its company being financial based was my theory to sell for the time being.

Gotta run guys! The day is young and many trades to be made. Thanks for reading

-Justin Moon, Senior writer for Marketchasers.com

Posted in Personal Portfolio Plays, Short Term Plays | No Comments »

Personal Portfolio Plays: August 19th, 2008

Purchased Cisco (CSCO) September 23 puts 15 minutes ago. I could of bought at the open and pocketed about 5-10% so far but my alarm clock didn’t go off :/

I had a small conversation with one of the other writers here on the site over whether or not to take up the September 22’s or September 23’s. I wanted to purchase the 22’s but went ahead and purchased the 23’s instead.

On a slight side note, my put play on Companhia Vale Do Rio (RIO) has gone a bit south. Remember, I told you to buy it only barring a big drop, which it had the morning after the articles post. We are going to wait for a retest of the $25.20 resistance line before we make a play.

Thanks for reading.

-Justin Moon, Senior writer for Marketchasers.com

Posted in Personal Portfolio Plays, Short Term Plays | No Comments »

Marketchasers Podcast

We will be running a podcast here on the site within the next two weeks or so. For those of you who do not know what a podcast is, it is basically a non live radio show where certain topics are addressed and discussed. After it has been uploaded to the site, you can listen to it through windows media player or some other media program on your computer. Feel free to leave a comment with questions or email us your questions later on this week or next week on certain stocks you want to know about and what plays to do. Make sure to include your name and where you are from. After the financial discussions, we will rant about interesting world topics. Some interesting ones we will be definitely covering are:
1)Mens Olympic Basketball. USA! USA!
2)Upcoming playoff baseball

Thanks for reading. We will be posting what day we do the podcast soon.

-Justin Moon, Senior writer for Marketchasers.com

Posted in Ramblings | No Comments »

Short Term Play: Companhia Vale do Rio Doce (RIO)

I have a potential play that could be made Monday. The company is Companhia Vale do Rio Doce (RIO), a Brazilian mining company. Lets take a look at the charts:

In the graph below, we have a three year chart of Companhia Vale do Rio Doce. Notice the descending channel that forms and the stochastic oscillator registering the stock as oversold for close to two months now. I did not draw it on this chart, but we are seeing a megaphone top pattern here. Normally, I would see this as a opportunity to buy puts, but you will be my reasoning for now doing this later. Onto the next chart…

Here we have a one year chart of Companhia Vale do Rio Doce. Again, notice the descending channel and the support line which I have set at approximately $25.20. Onto the next chart…

Here, we have a 10 day chart of Companhia Vale do Rio Doce. Notice the doji candle that forms on the 8th with WAY lower than average volume, the inverted hammer candle that forms on the 12th and the crack of the support line this past Friday on lower then average volume. The %K line has also passed the %D line on the stochastics chart an divergence is growing and increasing. These are all strong bullish signals.

So what is our play here? Even though the chart is in a megaphone top pattern, I think purchasing calls would be a great play here. A lot of indicators point to this play: doji, inverted hammer, retest of the support line, rising stochastics and long term oversold stochastics. I would purchase this on monday barring a big drop. As long as the price says above our support line, buy calls and set a stop at $25.20. Which calls to purchase you might ask? I would stick with December 29’s or 30’s. Thanks for reading.

-Justin Moon, Senior writer for Marketchasers.com

Posted in No Category, Short Term Plays | No Comments »

Personal Portfolio Update: August 15th, 2007

Sold off Procter & Gamble (PG) for a 5.32% gain.

Purchased Bank of America (BAC) September 30 puts and PNC Financial (PNC) November 60 puts right after the opening bell.

Thanks for reading.

-Justin Moon, Senior writer for Marketchasers.com

Posted in Personal Portfolio Plays | No Comments »

Portfolio Update: August 12th, 2008

Since I first started investing in stocks I’ve wanted to have Schlumberger (SLB) in my portfolio. Schlumberger, an oil services company, is widely diversified and technologically progressive. I’ve simply been waiting for a decent opportunity to jump in. Consequently, I purchased shares of SLB on Friday morning for $94.50 per share amidst the steady decline in oil prices of late. Schlumberger has shown consistent growth and holds a P/E multiple about four points higher than its industry’s average, which shows that there is an abundance of buying the stock. I have a great deal of confidence in SLB, so it being slightly overbought doesn’t worry me. I plan to keep at least part of this position for quite some time.

Another industry giant I’ve had my eye on for a few weeks now is the investment servicer Goldman Sachs (GS). There are some very convincing numbers associated with this firm that should be noted. In a very simple earnings analysis, consider the following numbers.

P/E Multiples

• Goldman Sachs: 8.5
• Investment Services Avg: 16.9
• Financial Avg: 15.7
• S&P 500 Avg: 18.1

Earnings Growth Rates

• Goldman Sachs: 25.64% (1-year), 43.78% (5-year)
• Investment Services Avg: 19.44% (1-year), 29.74% (5-year)
• Financial Avg: 0.41% (1-year), 16.55% (5-year)
• S&P 500 Avg: 14.54% (1-year), 23.11% (5-year)

With Goldman’s growth, trading at 8.5x earnings is a bargain. Beyond growth, take a look at the consistency of Goldman’s earnings compared to its competitors. Goldman is one of the few investment services firms that have consistently recorded earnings, meeting or beating expectations through 2007 and 2008. A few of Goldman’s big competitors have recorded devastating losses and failed to meet expectations amidst America’s financial crisis. Merrill Lynch (MER) reported losses and/or failed to meet Wall Street’s expectations for past four quarters, Lehman Brothers (LEH) reported a loss in our last quarter, Morgan Stanley (MS) stumbled in the last two quarters of 2007, and Citigroup (C) reported losses and/or missed expectations for the past three quarters. Goldman has stood strong, giving me confidence in their management and where they put their money. Goldman, however, has recently received a bit of negativity from analysts. Their earnings projections were downgraded by some and Deutsche Bank changed their rating from a buy to a hold. Of course this caused the stock to drop from $178 per share at yesterday’s close to around $168 per share at today’s close. I purchased Goldman at $168 during the late afternoon after its 6% tumble. It has dropped 11% since its mid-July spike, so I took the opportunity and bought in. Thanks for reading.

Justin Shade, www.MarketChasers.com

Posted in Personal Portfolio Plays | No Comments »

Market Midday Overview: August 11th, 2008

Today has been a very mixed day of trading so far with an hour and 15 minutes before the close. Oil drops to the $114’s and consequently, we see drillers being absolutely hammered. Look at today’s drop to load up on national bank stock puts as they have been performing well on a relative basis.

If you would of taken up my recommendation on Baker Hughes (BHI) puts last night or Potash Puts 6 days ago with the focus on Potash of Saskatchewan (POT), your puts would be flying right now. Baker Hughes was down over $2 a share around noon but has recovered nicely. Don’t expect that to last for long. Potash of Saskatchewan is down 11, I REPEAT 11 points! That is approximately 16 points (dollars) down from Wednesdays close when I recommended it. That would of been close to a 75% gain after costs in 5 days if you would of purchased the December 120 puts, which would of been the conservative route. I don’t even want to look at how much you would of made if you purchased the December 140 puts. Good night and come again.

Thanks for reading.

-Justin Moon, Senior writer for Marketchasers.com

Posted in Ramblings, Short Term Plays | No Comments »

Short Term Play: Baker Hughes (BHI) Short or Put

For this article, we are looking at Baker Hughes (BHI). Lots going on with this chart, but the plan is simple. We are shorting. Lets take a look at the graphs.

In this first graph, we have a 3 year chart of Baker Hughes. Notice the support line that is present at $62.26, seen within the circles on the chart. This company just refuses to pass below that point.

Here is a 6 month graph of Baker Hughes. We see the formation of a double top with a support line at $77.27. You could almost call this a head and shoulders top, but the large candle formation in Mid-April that touches the support line is straddling the support line, so it is a bit sketchy.On Friday, August 8th, we see the price of the share close at $77.20, thus passing below the trigger point of the support line (pink line) and indicates the start of our downward trend.

For this third chat, we view a three month chart of Baker Hughes. We see close up view of the cross below the support line, again indicated by the pink line.

What is our play here? Friday showed the crossing of the shares below the support line, causing the options price of the October $65 puts to increase 65%. Why the October $65 put you say? If you look at the second graph, the trend formation lasted 90 days, but the last support line hit of $62.26 happened about a month and a half prior to the start of the formation. This means that we are expecting the support line to be hit in another month and a half, thus causing the October $65 puts to skyrocket. We have two possible plays we can do here. We can purchase the October $65 puts currently priced at $129 per contract, or we can purchase the October $60 dollar puts to lower our cost basis, this lowering our risk. I wish there was a November or December put option to give us a little more time flexibility but the next one is in January. Preferably, we want to do this move if Baker Hughes has a drop Monday morning, but Baker Hughes had a huge downward move Friday. We will then set a stop at the resistance line. If the line is passed in the upward direction on a nice healthy 2-3% move on higher volume, calling might be on option here because the share price has bounced off of the support line twice in the higher direction twice in the past two months. In all honesty, I expect puts to be placed, especially with the way commodities have been trading since mid-July. Thanks for reading.

Justin Moon, Senior writer for Marketchasers.com

Posted in Short Term Plays | No Comments »

Short Term Play Watchlist: Bristol Myers Squibb (BMY)

We are going to add Bristol Myers (BMY) to our watch list for next week. I was picking through my watch list and passed by this very intriguing graph:

What I see: Alright, here we have a 5 year chart of Bristol Myers. The orange line I drew shows the support line at $20.05. There is a uniform descending channel formation that begins right after the huge red candlestick formation at the beginning of January ‘08. Notice how the price of the stock bounced off of the support line twice since January ‘08. Now on to the next graph…..

Below, we see a formation of a head and shoulders bottom. It is not a 100% definitive one but it is definitely clear enough to draw and evaluate. The green line here shows the head and shoulder pattern and the blue line shows the upper resistance line. After a bit of extrapolation, I view this line to extend out to about $22.59. Another interesting thing to note is another upper resistance line formation that forms at the two ends of the “head” in our head and shoulders formation, as shown in the third picture. On May 30th ‘08, we see the high hit $23 dollars even and on July 17th ‘08, we see the daily high hit 22.93 and bounce right back down. On May 1st of ‘08 we see the chart breaking through this resistance line but ends up breaking right back down six days later.

This is how I would play this graph. Looking at the chart, we can see two resistance lines as I stated earlier, one forming at $22.59 from the descending trend line (blue line on the chart) and another forming at both ends of the head (not drawn). With this, I can set the head resistance at 22.93, which equated to a 34 cent difference in my two resistance lines. Next week we can use one of two strategies. First, but the most doubtful of the two, we can see if the graph trends lower to the support line at $20.05, which is the gold line on the graph. If the graph has a healthy move in either direction (2-3 percent) on higher than average volume, we can set a call if the price trends higher or a put if it trends lower. We will then set a stop at the support line price of $20.05. The second strategy we can use, which is sure to happen, is play the upper resistance line. From the way the chart has look in the 5 year graph, I could safely bet that Bristol Myers will be trending lower sometime soon, but you never know. Once the chart hits the “head” resistance line of $22.93, we can set a stop or put based on the direction of the movement, with another stop at the resistance line price. I would most likely guess that the put option will be used. Thanks for reading.

-Justin Moon, Senior writer for Marketchasers.com

Posted in Short Term Plays | No Comments »