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The Week Past
Well, we had the Dow down small last week by finishing -0.8% for the week, the Nasdaq finished the week -7.1%, The Russell 2000 was -0.9%, and the S & P 500 was -2.6%. All traders should pay closer attention to their mental stops or plan on riding out some bumps along the way.
This last week was a small downturn for the Dow and a big downturn for the Nasdaq. We believe margin is fine to use if you DO NOT margin all your holdings. We feel it would be prudent to have 1/2 of an account on margin at this time.
We believe that a long-term or swing-trader should have 1/2 of their portfolio on margin at this time. A daytrader could have some margin of up to 3/4 of his holdings if you use tight stops. We want short-term traders to have their stops in a tighter range of –10% to -15% We suggest using -30% stops on your long-term positions at this time.
Well, the Dow was down small and the Nasdaq finished the week down a lot.
The Economic reports coming this week are: on February 13th at 8:30 AM EST the Retail Sales report will be released; on February 14th at 8:30 AM EST the Business Inventories report will be released (The business inventories report includes sales and inventory statistics from all three stages of the manufacturing process (manufacturing, wholesale, and retail). But by the time it is released all three of its sales components and two of its inventory components have already been reported. Because retail inventory is the only new piece of information it contains, the market usually ignores the business inventories report.
However, sometimes retail inventories swing enough to change the aggregate inventory profile. This may affect the GDP outlook. When it does, the report can elicit a small market reaction.
The aggregate sales figures are dated and they say little about personal consumption. They are actually a good coincident indicator, but the market is far more interested in forward-looking statistics.
The inventory-to-sales (I/S) ratio measures the number of months it would take to deplete existing inventory at current sales rates. A relatively low (high) I/S ratio may mean that manufacturers will have to build up (draw down) inventory levels. Depending on the strength of final demand and the degree to which recent inventory changes have been intended or unintended, this can have an effect on the industrial production outlook. Note that this information is much more useful to market economists than it is to other market participants.);
on February 15th at 8:30 AM EST the International Trade report will be released and at 8:30 AM EST the Initial Claims report on joblessness will be released; on February 16th at 8:30 AM EST the Housing Starts and Building Permits reports will be released; at 8:30 AM EST the Producer Price Index (PPI) report will be released; and at 9:15 AM EST the Industrial Production report will be released. . These reports will rate a C- to A- on a scale of A-F. Everyone should place close attention to pre-market trading and how the futures are acting each morning before the market opens for trading.
IPOs by M_A_Trader©:
Ipos are now slowly starting to come out as the market goes higher. There will not be many ipos coming to the market so check on them at this web site. Click on Ipo Info is a great site to research ipos.WARNING: IF YOU BUY IPOs AFTER THE STOCK OPENS USE LIMIT ORDERS ONLY.
”A” Portfolio Stock Report by M_A_Trader©
Nortel (NT, TSE)(NT, NYSE) Nortel closed the week at $30.50. We now have a 12-month target on NT of $175 US. News for NT:
No new news for NT this week. We have a target on NT of $175 over the next 12 months. NT
These stocks in our “A” Portfolio EXTR; PALM; SCMR; CSCO; SUNW; EXDS; NT; ORCL; and JDSU all had double digit decreases with the rest of the “A” Portfolio not changing much. . The upper resistance levels for the Nasdaq is 2,570 and then 2,840. Support is at 2,400 and then 2,345. We would like to see the Nasdaq stay above 2,400.
The “A” Portfolio is going to a strict percentage gain or loss sell mode for now with the market fluctuating so much at this time. If a position moves up +20% one-quarter of the position will be sold, at +40% another one-quarter will be sold, and then at +75 to +100% another one-quarter of the position will be sold. That will leave one-quarter of the position to ride the stock higher. We still will use –30% to exit a stock position. Our targets for these stocks are on our Charts page.
We will talk about more of the stocks in the “A” Portfolio in the coming weeks.
All the past additions to the “A” Portfolio are on this page now.”A” Portfolio Additions
Please read our disclaimer about the “A” Portfolio here. ”A” Portfolio Disclaimer
Stock Charts for 2000 and 2001
This page has links to all our stock charts and “A” Portfolio results for 2001.The Charts
After we turn from overall market downward momentum to upward momentum these three Canadian companies should rebound well.
Infowave Wireless (IW:TORONTO) Target US$30 Infowave is well positioned to take advantage of the coming boom in wireless email. Thomas Koll(a current VP at Microsoft) will be starting as the companies CEO on February 15. They have many impressive partners including Intel, Nokia and Compaq. Current market conditions have made this stock very oversold.
Rogers Communications (RCB.A:TORONTO) Target US$42 Rogers is Canada's largest cable television company they also have their hands into providing high speed internet as well as cellular and paging services. The long-term outlook for this company is stable and is likely to see steady growth in a booming industry.
Nortel Networks (NT:TORONTO, NT NASDAQ) Target US$175 Many Canadian brokers are raving about the buying opportunity available due to Nortels current price weakness.
LEAPS® information is now on this page. LEAPS®
Stocks We Like
Research in Motion closed the week at $62 5/8 we have raised our 12 month target to $255 (RIM, TSE) (RIMM, NASDAQ). News for RIMM: No new news for RIMM. We are letting RIMM run for our target of $255. Use a trailing stop so you do not get stopped out of RIMM to early if you have some large gains from its lows earlier in the year. We would like to add RIMM to the “A” Portfolio if it goes below $50 but this is a very risky long-term play on wireless communications. Since we already have PALM a trader may want to add HAND and have all three in their portfolio.You may have to hold RIMM for 12 – 18 months depending on how the market is doing. RIMM has found partners in AOL and Compaq. Amazon has Crackberry available for $499 with service available at $39.95 per month. RIMM
VIRS (7.03 ) is a very speculative buy at this time. VIRS was –6.27% this last week. VIRS is a strong buy if it sinks down to $5 1/2 – 6 1/2 Only buy it if you can afford to lose all you invest in it. The chart for VIRS is looking good so continue to hold this stock for our $25 target. News from VIRS: No new news for VIRS this week.
Management and product development strategy is available on Triangle's website at: VIRS
We are adding another blown up stock as a speculative buy. We are adding ZOOX (4.03), -16% for the week, as a very risky buy at $3 ½ or lower with a target of $29 in 12-24 months. ZOOX is currently having a slow down in sales year to year. Its new switch for SANS are not selling as well as management expected. New management has been installed but it may take two or more quarters to fix their inventory oversupply. Well, ZOOX has not been doing very good since we recommended it a few months ago. We would average into more of ZOOX and hold for the long-term. ZOOX may be dead money for the next two-three quarters. News for ZOOX this week: No new news for ZOOX this week. Only buy this stock if you can afford to lose your entire investment in ZOOX.ZOOX
Over the next few weeks we will talk about the stocks in our “A” Portfolio. IMNX reported earnings on January 24, 2001 ($30.25) IMNX News for IMNX this week: “SEATTLE, Feb. 6 /PRNewswire/ -- Immunex Corporation (Nasdaq: IMNX) has scheduled presentations at the following investor conferences for February 2001. The conferences, their respective dates and locations are as follows: -- Merrill Lynch Global Pharmaceutical, Medical Device and Biotechnology Conference February 7, 2001 Grand Hyatt Hotel - New York, NY -- Goldman Sachs Heart Failure Conference February 21 - 22, 2001 Pierre Hotel - New York, NY -- Lehman Brothers Healthcare Conference February 27 - March 2, 2001 Grand Floridian Resort & Spa - Orlando, FL Links to and information about webcasts and replays are available at the Immunex website at IMNX Conferences
Last week we talked about Corvis Corporation CORV (19.06): “COLUMBIA, Md.--(BUSINESS WIRE)--Feb. 12, 2001--Corvis Corporation (Nasdaq:CORV), a leader in delivering intelligent all-optical networking solutions, will be participating in the Robertson Stephens Technology Conference, February 13-14, 2001. The conference is being held in San Francisco at The Palace Hotel. Dr. David Huber, President and CEO of Corvis, and Anne Stuart, Corvis' Senior Vice President, Chief Financial Officer and Treasurer, will speak at the conference on Wednesday, February 14, 2001, at 8:00 a.m. Pacific Time. Dr. Huber's and Ms. Stuart's presentation will also be accessible via web cast. A link to the web cast will be available on the Corvis web site, www.corvis.com.” CORV
This week we are talking about Sycamore Networks (SCMR) (22.44): SCMR will report its earnings after the market closes on February 13,2001 and look for an earnings webcast on SCMR’s website address. SCMR
We added CPST and CRNT to the “A” Portfolio on Monday February 12, 2001. Here are our reports on those two new stocks.
Ceragon Networks Ltd. (CRNT $15.00) designs, develops, manufactures and sells high-capacity broadband wireless network equipment that enables high-speed Internet access and intergrated data, video and voice services. For the FY ended 12/00, revenues totalled $29.2M, up from $4.6M. Net loss applic. to Common totaled $35.2M, up from $7.3M. Results reflect increased sales in North America and Europe, offset by increases in R&D, marketing, and non-cash compensation expeneses. CRNT
Capstone Turbine Corp. (CPST $32 1/4) designs, develops, assembles and sells Capstone MicroTurbines, compact, environmentally friendly generators of electricity and heat which provide power at the site of consumption and to hybrid electric vehicles. For the 9 months ended 9/30/00, total revenues totaled $16M, up from $1.3M. Net loss applic. to Common totaled $584.9M, up from $24.2M. Results reflect increased unit shipments, offset by increased preferred accretion. CPST
With the Market being so volatile, a trader should have some close mental stops in the stocks they buy. We suggest a mental stop of 20% is used where appropriate.Income and Bonds
We recommend buying utilities based in Florida and not any utilities based in California. The reason is California based utilities do not produce enough of their own power and have to go onto the open market to buy power during peak usage. California utilities are having trouble and two of them Edison Intl. (EIX) and P G & E Corp. (PCG) are having problems so stay away from them for now. The authorities in California granted EIX and PCG some rate increases for the next 90 days but it may not help those two utilities enough in their cash flow and they still may end up in bankruptcy. We would stay away from any power generators that supply power to any California utilities at this time. For a person needing some income be sure to look into electric utilities for some bargain buying opportunities to take advantage of the high dividend paying utilities. We would buy 10-year treasuries for income and some appreciation if interest rates were lowered more this year. We recommend 3-6 months Treasuries because they are currently yielding 5.0%. CEI yield has gone down to 9.8% but it is still a buy for its yield and our target is $35. We also like these two reits: CRE yielding 6.1% and SPG yielding 7.7%. We will report on them in the next Newsletter.
Stocks for 2001
The new stocks we have added to our charts for 2001 are: INSP; IMNX; ICOS; TQNT; TGEN; SBUX; RSTA; CRXA; COST; WM; ISLD; MCOM; CHKP; EMLX; ITWO; MANU; JNPR; MUSE; VRTS; QLGC; VRTY; ACRT; AREM; CHCS; INRS; PWER; PDII; SNWL; CHEZ; KO; CORV; GPS; GSPN; MDT; MRCY; AMCC; VTSS; XLNX; BKE; MYGN; CHIR; APC; DVN; JNY; MCLD; NBR; PTEN; QQQ; and TXN. We dropped the following stocks: T; EWEB; ROWE; SGAI; PCOR; PCNTF; ICY; AND LU. You will notice there we be more sections in the charts section of the website. We still will have sections called 12 month, Like, and Tracking. With new sections for Beaten up stocks from 2000, an ADV section for stocks new to our Newsletter, and a section called Dogs of the Dow. Dogs of the Dow are five stocks chosen from the Dow Jones Average of 30 stocks that has shown to beat the market over the past few years.
Some the company’s reports written about Stocks 2001 in the newsletter are here Stock Picks 2001
With the Market being so volatile, a trader should have some close mental stops in the stocks they buy. We suggest a mental stop of 30% is used where appropriate.
Readers will notice all our stocks we follow are on a separate page and we will list prices to purchase stocks at and a target price that we feel the stocks have of reaching in 12 months.