Monday, June 30, 2014

American Capital Ltd. (NASDAQ: ACAS)

American Capital, Ltd. is a private equity and venture capital firm specializing in management and employee buyouts, subordinated debt, leveraged finance, mezzanine, acquisition, recapitalization, middle market, early venture, mature, industry consolidation, and growth capital investments. The firm seeks to invest in senior debt mezzanine, unitranche, and equity financing for buyouts of private equity firms and direct in private and public companies. It also invests in special situations and in government. In special situations, the firm invests in troubled situations and in distressed situations. The firm also considers smaller investments as add-on acquisitions for existing portfolio companies.
To review American’s stock, please take a look at the 1-year chart of ACAS (American Capital, Ltd.) below with my added notations:
1-year chart of ACAS (American Capital, Ltd.)
Over the last 5 or 6 months ACAS has traded mostly sideways, while forming a trend line of support (blue). Always remember that any (2) points can start a trend line, but it’s the 3rd test and beyond that confirm its relevance. As you can see, the market deems ACAS’ trendline to be very important. In addition, the stock also has a key level of resistance at $16 (red).

The Tale of the Tape: ACAS has a trend line support and a $16 resistance. A long position could be entered on a break above $16, or on a pullback to the trendline, with a stop placed below the level of entry. A short position could be entered if ACAS were to break below trendline or if the rally continues up to $16.
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Prepare for a Natural Gas Price Explosion

In my last article, I discussed how ISIS’ actions in Iraq [1] aren’t likely to send oil prices blasting higher in the short term.
Supplies are simply too plentiful for prices to experience a major spike.
For natural gas, however, a price explosion is imminent…
Indeed, even though natural gas is such an abundant resource, there are other factors in play right now that point to a significant increase in prices over the next six to eight months.
In fact, seeing natural gas reach the $6 level by December isn’t out of the question.
A Roadmap to $6 Natural Gas
Remember, the trajectory for natural gas prices is decided mainly by five factors: usage predictions, demand forecasts, current inventory levels, a healthy dose of speculation and – of course – the weather.
Let’s take a closer look at the first four…
Price Driver #1: Usage. We’re certainly going to see greater commercial usage of natural gas – both for transportation (the fastest-growing segment) and for electricity generation. Because of tougher carbon emission regulations, many power plants are transitioning out of coal and into natural gas.  (more)

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Sinovac Biotech Ltd – SVA

SVA has been on a tear since 2012 and has recently pulled back to work off some of it’s overbought condition. While there is a risk of this pulling back further, I think now is a good time to initiate a starter position as this could retest it’s highs in the coming months. I like the position of the RSI here and as it gets closer to 40. Typically that is an area after a big run-up it finds support. Keep this on your watchlist.
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Sodastream International Ltd (NASDAQ: SODA)

SodaStream International Ltd. develops, manufactures, and markets beverage carbonation systems and related products. The company operates in four segments: The Americas; Western Europe; Asia-Pacific; and Central and Eastern Europe, Middle East, and Africa. It offers soda makers, exchangeable carbon-dioxide cylinders, which enable consumers to easily transform ordinary tap water instantly into carbonated soft drinks and sparkling water; and consumables, such as carbon-dioxide refills, reusable carbonation bottles, and flavors to add to the carbonated water. The company also sells accessories, including bottle cleaning materials and ice cube trays. In addition, it distributes Brita water filtration systems in Israel. The company markets its products under the SodaStream and Soda-Club brand names. It sells its products through individual retail stores and local distributors, as well as directly to customers.
To review Soda’s stock, please take a look at the 1-year chart of SODA (Sodastream International, Ltd.) below with my added notations:
1-year chart of SODA (Sodastream International, Ltd.)
SODA has been trending mostly lower for most of the entire year. During the last 5 months though, the stock had held a clear level of support at $35 (blue). Even though the market has caused most stocks to move higher over the last year, SODA had not been able to follow along and has recently broken below $35. This breakdown is not only a new 52-week low, but its also a break of a clearly defined support level.

The Tale of the Tape: SODA has broken a key support level of $35, which was a 52-week low breakdown. This should signal lower prices ahead for the stock. A short trade could be entered on SODA on a rally up to $35, with a stop set above that level. A break back above $35 would negate the forecast for a move lower and a long position could be considered instead.
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US Weekly Economic Calendar

time (et) report period Actual CONSENSUS
9:45 am Chicago PMI June   64.3 65.5
10 am Pending home sales May   -- 0.4%
9:45 am Markit PMI June   -- 57.5
10 am ISM June   55.6% 55.4%
10 am Construction spending May   0.6% 0.2%
TBA Motor vehicle sales June   16.4 mln 16.8 mln
8:15 am ADP employment June   -- 179,000
10 am Factory orders May   -0.4% 0.7%
8:30 am Weekly jobless claims 6/28
314,000 312,000
8:30 am Nonfarm payrolls June
215,000 217,000
8:30 am Unemployment rate June   6.3%  6.3%
8:30 am Trade balance May   -$45.2 bln -$47.2 bln
10 am ISM nonmanufacturing June   56.3% 56.3%
  Independence Day
None scheduled
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