Wednesday, November 6, 2013

Ten of the Dow's Most Oversold Stocks

The lagging Dow Industrials tried to catch up with the S&P 500 last week and this month's analysis of the most oversold Dow stocks reveals some new opportunities in these high-yield, big cap stocks, says MoneyShow's Tom Aspray.
The relentless nature of the stock market's rally in 2013 has made several long-term bulls nervous about the near term outlook, even though they remain bullish long-term. The gains of the past two months have been contrary to the historical pattern which has many wondering about how stocks may do this month.
My analysis, as discussed in the Week Ahead column, suggests that November may be a choppy month, but the breakout in the weekly NYSE A/D line does indicate that stock prices will be higher by the end of the year. There are some early signs that investors are rotating to more defensive stocks, which makes this month's scan of overbought/oversold Dow stocks particularly interesting.
I use Starc band analysis to identify overbought and oversold conditions. When a market or equity is close to its upper monthly Starc band (Starc+), it is a high-risk time to buy and considered overbought. Conversely, when a stock is close to the lower monthly Starc band (Starc-), it is a lower risk time to buy and is considered oversold.
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Once the list is obtained, I then look at the monthly, weekly, and daily analysis of each stock to find new opportunities. All of the most oversold Dow stocks have weak monthly relative performance patterns including International Business Machines Corp. (IBM) which is at the top of this month's most oversold list. It is just 10.2% above its monthly starc- band and is down over 6% this year.  (more)

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Chart of the Day - China Sunergy (CSUN)

The Chart of the Day is China Sunergy (CSUN). I found the stock by sorting the New High List for Weighted Alpha and this stock has a WA of 848.00+. Since the Trend Spotter signaled a buy on 9/3 the stock is up 321.40%!
It is a manufacturer of solar cell products in China. They manufacture solar cells from silicon wafers utilizing crystalline silicon solar cell technology to convert sunlight directly into electricity through a process known as the photovoltaic effect. China Sunergy sells solar cell products to Chinese and overseas module manufacturers and system integrators, who assemble solar cells into solar modules and solar power systems for use in various markets.

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Indicator Shows Gold Could Finally be Bottoming

Stocks moved up the fourth week in a row and have delivered a large gain in the first 10 months of the year. For now, there is no reason to expect a reversal in the trend.
Stocks Continue Setting New Highs
SPDR S&P 500 (NYSE: SPY) added another 0.15% last week and is now up 25.55% for the year, including dividends.
To put this performance into perspective, we can review data for the S&P 500 index going back to 1928. This year's performance would be the 22nd best year out of 86. After such a strong performance, many investors expect a decline, and the question becomes, "How bad will the decline be?"
In the past, large gains have been followed by losing years 43% of the time. Overall, 28% of the 86 years have closed down, so there is a slight bearish bias for 2014. (more)

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This MLP Could Score Traders 19%-Plus Returns: MMP

Magellan Midstream Partners LP (MMP[1]) — This master limited partnership (MLP) is engaged in the transportation, storage and distribution of refined petroleum through its 9,600-mile pipeline system.
This company’s low-cost capital structure and fee-based earnings have contributed to the stability of its growth. It has successfully diversified and has access to 40% of the United States’ refining capacity. It earned $2.02 per share in 2012, and the consensus estimate is for $2.51 in 2013 and $2.78 in 2014.
MMP has been in a bull market since 2008. In September, it broke higher from a 10-month bull channel and formed a new bull channel with a steeper angle of advance. The stock is under heavy and steady accumulation with a bullish MACD.
The 12-month target for MMP is $70, and with a dividend yield of 3.7%, it could provide an annual return of 19%-plus.
MMP Chart
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Iron Ore: The Other Forgotten Metal Could Double, Too

We looked at aluminum last time, where the profit potential remains unusually high. But now it's time to look at the other "forgotten" metal.

This one, as you'll see, is already the most-used metal in the world.
And shares of its best producer could double...

A $500 Million Bet on Iron Ore

Remember, Mick Davis doesn't just know commodities. He bets on them. Big. And he wins.  (more)

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