Today is Thursday, May 17, 2012

Not Categorized

This week’s bullish and bearish charts

Each week I update my readings of charts of stocks that I’ve commented on. The stocks are on http://www.stockcharts.com, a paid subscription service where I maintain several watch lists. The charts are updated during trading hours with a 15-minute delay. All of the charts shown are weekly charts. It’s important to also look at daily, monthly and point and figure charts. But do so with the understanding that technical analysis is an art, not a science, and academics can prove that technical analysis is very unreliable. I use technical analysis in combination with fundamental analysis, which is reflected in my posts here. To find my comments on the stocks shown in the charts, search the symbol in the search box at the top of column three.

These weekly charts look bullish. AFL, CAT, COV, EBAY, GIVN, HMA, JNJ, MDR, SSYS, STJ, UHS,

These weekly charts look bearish. AIRM, CHE, STZ, UNH, WLP,

These are mixed: ABT, AET, ISRG, MTN, PEP, SMA, SYK,

Full Disclosure: I own SSYS and STJ leaps options.

For educational purposes only. Investigate before you speculate.

NOK covered calls were more attractive yesterday

The Covered Call Advisor yesterday reported a covered call trade on Nokia’s (NOK) May08 29 calls that would yield up to 84.9% annualized, including a 78 cent dividend distribution. Not including the dividend, which could be called away if the stock rises above the $29 strike price, the yield was 47%. By the time I looked at the site this morning, the potential yield without the dividend had shrunk to 43% and with less than an hour to go in the trading session, it’s down to a still respectable 39.6%. I fear that the stock could easily fall another 3% to 5%, and because of the illiquidity of the options markets, I’d rather trade the stock rather than the options. The stock’s point and figure objective is $19. So I think I’ll pass.

But the trade and other trades reported on the site are very educational and worth a lot of study by anyone trading covered calls.

Full Disclosure: I don’t own NOK.

For educational purposes only. Investigate before you speculate.

Point and figure objectives turn bullish on EBAY,  ISRG,  MDR, MTN,

Point and figure charts usually show bullish or bearish price objectives, and these objectives can change to bullish from bearish overnight.

The PnF charts on EBAY, ISRG, MDR and MTN have turned positive.. The recent objectives are shown here.

I’ve profiled all of these stocks recently. Please put a stock symbol in the search box at the top of column three to see my writeup on a given stock.

Full disclosure: I don’t directly own any of these stocks. My investment club owns ISRG.

For educational purposes only. Investigate before you speculate.

AIRM, CAT, ISRG, STJ, UHS look bullish; EBAY, MDR, PEP, SSYS, STZ are bearish

Of the stocks I’ve profiled recently, AIRM, CAT, ISRG, STJ and UHS have pretty strong but not perfect charts. Link is below.

I am always curious how

Charts for AFL, CAT, EBAY, ISRG, MDR, PEP, STJ, UHS

Over the last 15 days or so I’ve analyzed several stocks, including MDR today, that have drawn my attention for various reasons.  I own STJ LEAPs options, and AFL, ISRG and PEP are owned by my investment club. Writing about stocks helps me think about them as investments.

I am always curious how the stock and options markets value stocks, because I believe the markets are very predictive. They’re not perfect, but they reflect a consensus of very smart people. Understand, however, that smart people do dumb things, and that’s why we have a bear market right now. The market is correcting its mistakes. Is it too bearish? Maybe, but probably not yet.

I also wanted to know whether they were technically bullish or bearish in this very bearish market. Finally, I was interested in the price objectives that were being set for the stocks in their point and figure charts and in their longer-term options. In some cases, I looked to see whether the stocks long-term options, or LEAPS, offered buying opportunities. Often, I also like to look for call write opportunities, but I’m not willing to write calls against stocks in this bear market. Type the stock symbol into the search box at the top of column three to find the stock you want to review.

In addition, stockcharts.com lets its subscribers publish one watch list, and I’m publishing a watch list for some of the stocks that I am watching as possible trades and investments. Click here to see charts. For fundamental information, I use the companies’ 10K reports, their conference call transcripts, Morningstar.com writeups, Yahoo.com data, Investor’s Business Daily data from investors.com, wsj.com data and reports published by independent research firms on my brokers’ sites. I seldom use all of these resources for one report, however.

And, of course, I’m not a professional stock picker, analyst or financial adviser. I strive for accuracy, but we’re all human and make mistakes. I take no responsibility for how others trade. Investigate before you speculate.

Hospital chains publish very complex annual reports

I’ve been reading and sometimes reporting on hospital chains’ annual reports for more than 30 years, and I never cease to be amazed by the complexity of the hospital business. Reading Universal Health Services’ (UHS) annual report reminded me how bureaucratic you must have to be do be in the hospital business and deal with thousands of pages of complex, confusing and dumb laws and regulations. Some people are cut out for that kind of work, but I’m sure not one of them.

Rogue traders show how easy it is to be sucked in by the markets

A rogue trader at MF Global lost $141.5 million in the wheat market, apparently trying to pick the top and losing almost every time, throwing good money after bad.

The Chicago Tribune reports the trader, Evan B. Dooley, who had been with the firm since 2005 and was trading “on commission” has been fired. That Dooley had survived for several years shows he must have been an ok trader before he lost it.

So many lose it, especially in the futures markets, by over trading to make up for their losses. If you don’t have the discipline to take your losses and take a break when the markets are beating you, stay out of the markets, especially the commodity, currencies and options markets.

Does eBay want to dump small sellers and become a shopping mall for large ones?

Gary E. Sattler is speculating that eBay is trying to radically change its business model. He thinks eBay wants to become a mall for 1,200 large online sellers and drop its auctions for small sellers, which would reduce its bandwidth and customer service costs.

The problem with that idea is that the small sellers attract eBay’s traffic, not online stores, which can be found by searching Google, Yahoo or MSN, among others.

And a new model wouldn’t solve eBay’s problems with deadbeat buyers. If eBay gives up its auctions, other sites will step in. But in the meantime, small sellers need to focus on creating online stores on eBay, Amazon, Yahoo and other sites and advertising them in pay-per-click advertising. Stores suggest professionalism that auction listings can’t match.

Web sites contest Nielson Online, ComScore traffic reports; advertisers may be getting bad data

Publishers and broadcasters are always contesting audience studies by third parties, and web content publishers are in the midst of their version of the controversey.

Nielson Online and ComScore, the leading traffic reporting agencies are being audited while Google Analytics and two smaller firms, Compete and Quantcast, attempt to move in on them.

 

eBay’s sellers confirm their lack of trust in the company

My article on Seeking Alpha, which I also published here, drew an above-average number of comments for that site. And they show how unhappy some of eBay’s long-time customers are. One comment answered my questions for eBay’s buyers and sellers and investors in devastating detail.

Back in November I wrote a skeptical article about eBay for Seeking Alpha, where the stock gets more than its share of attention.