Friday, May 9, 2014

Why You Need to Cash Out of the Oil Sector Now

It's time to take profits on the oil sector.
We said lagging oil stocks – that started out the year in bad shape – playing catch-up would keep the oil sector moving higher in the near term.
The NYSE Oil Index (the "XOI") is up 6% since our essay. That's a terrific move in one month. But now it's time to cash out...
The oil sector has had a great run. But as you can see from the chart of the XOI below, the sector looks due for a break.  (more)
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Rick Rule’s Top Three Resource Picks

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Insider: NSA to Rig Stock Market Investments 100%

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TW Telecom Inc (NASDAQ: TWTC)

TW Telecom inc., together with its subsidiaries, provides managed network services in the United States. The company specializes in business Ethernet, data networking, converged, Internet protocol (IP) based virtual private network (IP VPN), Internet access, and voice, including voice over IP (VoIP), as well as network security services. It delivers a portfolio of data networking services, including Ethernet bandwidth, and integrated and managed network solutions; data and Internet services comprising Ethernet, managed services, Internet services, and integrated services; and voice services that provide customers with local, local toll, and long distance calling capabilities.
To review TW’s stock, please take a look at the 1-year chart of TWTC (TW Telecom, Inc.) below with my added notations:
1-year chart of TWTC (TW Telecom, Inc.)
TWTC has been trading sideways for the last 9 months. Over that period of time the stock has formed a clear resistance level at $32 (red). In addition, the stock has also created a strong level of support at $28 (blue). At some point the stock will have to break one of the two levels that the sideways consolidation has created.

The Tale of the Tape: TWTC has clear levels of support ($28) and resistance ($32). The possible long positions on the stock would be either on a pullback to $28, or on a breakout above $32. The ideal short opportunity would be on a break below $28.
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How Low Can Biotech Go?

The stock market followed through to the downside, early Wednesday, raising the hopes of those on the short side. The turnaround caught many by surprise as the somewhat-optimistic economic outlook from Fed Chair Janet Yellen helped boost the market.

It still was a mixed close as the Nasdaq Composite (COMP) was down 0.32% while the Spyder Trust (SPY) that tracks the S&P 500, gained 0.59%. The Internet stocks continued to get hit hard, but in the broad market, there were twice as many advancing stocks as there were declining ones.

It has been a rough couple of months for the stock market as the wide trading range and sharp swings up and down have made it tough for both traders and investors. The earnings season has made it even worse as it has accentuated the volatility. There have been a number of stocks that beat earnings estimates but were still hit by selling.

Biotechnology has been one of the casualties as the Dow Jones Biotechnology Index (DJUSBT) was down over 20% at the mid-April lows. The question now is whether the sector has made its lows or if the biotech stocks are vulnerable to another wave of selling?
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Weight Watchers International, Inc. (NYSE: WTW)

Weight Watchers International, Inc. provides weight management services in North America, the United Kingdom, Continental Europe, Australia, New Zealand, and internationally. The company operates through North America, United Kingdom, Continental Europe, and Rest of World. It offers a range of products and services comprising nutritional, exercise, and behavioral tools and approaches. The company also provides various products, including bars, snacks, cookbooks, food, and restaurant guides with PointsPlus values, Weight Watchers magazines, PointsPlus calculators, and fitness kits, as well as ActiveLink, an activity monitor and Web experience that tracks activity throughout the day. In addition, it offers Internet subscription products, such as Weight Watchers Online that offers online and mobile content, functionality, resources, and interactive Web-based weight management plans; and Weight Watchers eTools, an Internet weight management product, which allows users to manage the day-to-day aspects of weight management plans online or via their mobile devices, discover different food options, and keep track of their weight management efforts.
To review Weight Watcher’s stock, please take a look at the 1-year chart of WTW (Weight Watchers International, Inc.) below with my added notations:
1-year chart of WTW (Weight Watchers International, Inc.)
WTW has been in a persistent downtrend since August of last year. During that time the stock has also formed an important trend line of resistance (blue). Always remember, any (2) points can start a trend line, but it’s the 3rd test and beyond that confirm its importance. So, WTW obviously has a very important trendline of resistance that currently sits near $25.
The Tale of the Tape: WTW is currently stuck under a down trending resistance. A break above resistance should mean higher prices, thus a long trade could be made. Short traders might look to enter a trade at the resistance.
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