Thursday, September 26, 2013

Tesla’s Rally Is Running on Fumes: TSLA

Tesla (TSLA) CEO Elon Musk may seem to be using his entrepreneurial super genius for the forces of societal good, but he's making some powerful enemies. Last week General Motor's (GM) VP of Global Development told AP the company is working on an electric car with 200 mile range and a price tag under $30,000. The fact that GM refused to say when or even if such a product would be mass produced goes a long way towards explaining why Musk doesn't seem too concerned about the competitive threat.

Judging by shares of Tesla the stock market is convinced the electric car industry is going to be huge with or without Detroit. Despite electric cars accounting for a mere 0.3% of total U.S. auto sales, shares of Tesla are up 430% in 2013. General Motors rakes in more than 100x as much revenue as Tesla but is only about twice the size in terms of market cap. The stock market seems to giving Tesla credit for selling cars to people who haven't even been born. (more)

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Is It Time To Sell Yen Once Again?

You want to talk about following trends? Is there anything worse out there than Japanese Yen?
There is something important to keep in mind here: Consolidations tend to resolve themselves in the direction of the underlying trend. It’s not always the case (what is?), but more often than not, when an asset is trending: triangles, rectangles, flags, pennants, you you name it, these consolidations tend to breakout in the same direction they came from.
Today we’re looking at the Dollar/Yen $USDJPY. After a monster move from last Fall, the currency cross has been consolidating those gains in a text book range since the May highs. With lower highs and higher lows, we can see that the correction has taken the shape of a triangle made up of converging trendlines. Eventually, as prices approach the apex, something’s gotta give. I’m looking at 100.60 as confirmation of a new leg higher:
9-24-13 usdjpy
If Yen breaks down (this chart breaks out higher), you’re looking at about a 10 point measured move. This target is achieved by taking the height of the consolidation (May highs to June lows) and adding it to the breakout level mentioned above 100.60. So we’re looking for prices to get above 110.
There is a very strong negative correlation between Japanese stocks and their currency. If you look at $DXJ, the Wisdomtree Japan Hedged Equity Fund, prices have already broken out of a similar looking triangular consolidation. And it looks like it’s heading higher, which is not good for Yen.
I think we could be looking at a new leg lower for Yen. We’ll be keeping a close eye on this chart above.

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The Best Stock Under $10? : KTOS

Since we recommended Kratos Defense & Security Solutions Inc. (Nasdaq: KTOS) back on June 6, the stock has soared nearly 40%.
And we believe there's more to come.
A lot more.
Founded in 1994, the San Diego-based Kratos is a specialized security-technology company that provides products and services crucial to U.S. national security priorities.
That national security focus is borne out by the company's customer base, which includes the U.S. Army, U.S. Air Force, U.S. Navy, the National Aeronautics and Space Administration (NASA), the Defense Logistics Agency (DLA), and the U.S. Department of Homeland Security. (more)

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The Only Warren Buffett Pick Signaling 'Buy' Right Now: USB

Warren Buffett is synonymous with value investing and investment success. Buffett has consistently delivered profits to his investors in Berkshire Hathaway (NYSE: BRK-B) for almost 60 years. Now, Buffett is 83 and probably won't have the opportunity to build wealth for the next generation. Fortunately, Buffett has left a detailed road map of his investment strategy that we can use to build wealth long after his departure.

Buffett has built a fortune by buying shares of great companies when they were selling at a discount. He is a patient investor and waits for prices to reach what he considers to be a bargain level. Because he never knows when bargains will be found in the market, Buffett maintains a large cash position in his portfolio, something individual investors cannot do without hurting their returns.  (more)

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Who is stealing Nigeria's oil?

Nearly 100,000 barrels of crude oil is stolen each day from Nigeria - about 5 per cent of the country's total output - yet the international community continues to turn a blind eye to the thefts.
Most of what is stolen is exported with proceeds laundered through world financial centres, according to a new report from the United Kingdom's Chatham House, a global think tank based in London.
For years, officials have known the problem exists but little has been done to stop it, says Christina Katsouris, the co-author of the report, "Nigeria's Criminal Crude: International Options to Combat the Export of Stolen Oil."
Theives tap into pipelines and other crude oil infrastructure in the Niger Delta to steal the oil and then it is pumped onto waiting barges or boats, the report states. Some of the crude is refined locally or it is shipped abroad.
"You can see it being stolen," Katsouris says in a YouTube video post.
Quite often, the criminals are messy and cause oil leaks, which often get blamed on the oil companies, she says. "It is horrendous, it leaves big black holes over what was once pristine swamps."
Bribery, corruption and organized crime fuels the thievery. And often, the product ends up on the legal market. "We tried to find cases of prosecution - money laundering linked to crude oil theft - and we couldn't find one," she says on YouTube.
Nigeria needs international help to stop the problem, she suggests.
First, Nigeria and the country's partners need to prioritize the gathering, analysis and sharing of intelligence on the problem, the report says. Figuring out how much is actually being stolen and tracking where the money is going would be a start.
Nigeria could also consider working with it's partners and build confidence by strengthening policies such as anti-bribery laws and they need to work with their neighbouring states to monitor the flow of stolen crude oil over the borders.
"Poor governance has encouraged violent opportunism around oil and opened doors for organized crime. Because Nigeria is the world's 13th largest oil producer – exports often topped two million barrels per day in 2012 – high rents are up for grabs," according to a Chatham House release.

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Oracle Corporation (NYSE: ORCL)

Oracle Corporation develops, manufactures, markets, hosts, and supports database and middleware software, applications software, and hardware systems. It licenses database and middleware software, including database and database management, application server and cloud application, service-oriented architecture and business process management, business intelligence, identity and access management, data integration, Web experience management, portals, and content management and social network software, as well as development tools and Java, a software development platform. In addition, it offers servers; storage, networking, and virtualization software; operating systems, including the Oracle Solaris Operating System; Oracle engineered systems; and hardware systems support solutions, including software updates for the software components, as well as product repair, maintenance, and technical support services.
To review Oracle's stock, please take a look at the 1-year chart of ORCL (Oracle Corporation) below with my added notations:
1-year chart of ORCL (Oracle Corporation) ORCL has formed a very clear down-channel chart pattern over the last (6) months. A channel is simply formed through the combination of a trend line support that runs parallel to a trend line resistance. When it comes to channels, remember that any (3) points can start the channel, but a 4th point or more confirms it. You can see that ORCL has (4) points of channel resistance (red) and (2) points of channel support (blue). Following the ORCL channel can provide you with both long and short trading opportunities.

The Tale of the Tape: ORCL has formed a common pattern know as a channel, in this case, a down channel. A long trade can be entered on a pullback to the channel support, which at this point is somewhere down in the mid-20's, or on a breakout through the channel resistance, currently sitting near $33. Short trades could also be placed at channel resistance or if ORCL were to break below the channel support.
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