Hi, these are just ideas not recommendations, sometimes I trade my ideas, sometimes I don’t.
Always remember, yours is the responsibility for your trades,
Good luck,
Erick



Thursday, August 12, 2010

On Worth and Cramer

I read two articles on august 10 about the markets, and I would like to share some excerpts.

This one is from Bloomberg:
“Aug. 10 (Bloomberg) -- Stocks could go either way and anyone who claims to know their future is lying, according to Carter Worth, the third-ranked technical analyst in last year’s Institutional Investor survey.
A monthlong gain in the Standard & Poor’s 500 Index has left bulls and bears at a “a perfect standoff,” Oppenheimer & Co.’s Worth wrote in a note yesterday. It’s a “coin toss” as to whether the index will increase or retreat, he said.

Worth’s ambivalence highlights the challenge for investors as earnings rise at the fastest rate in 22 years even amid signs the economy is faltering. The S&P 500 rallied as much as 9.2 percent from its Dec. 31 close this year and dropped as much as 8.3 percent. It climbed 0.6 percent yesterday to 1,127.79, up 1.1 percent for 2010.

“This is the elegant, exquisite moment that you’ll see a handful of in your lifetime,” Worth said in an interview. “Anyone who says to you, ‘I know where it’s going,’ they’re lying to themselves and they’re lying to their clients.””

And the other article is from CNBC:
“ Cramer: ‘Fed Said Good Things-Buy’
cnbc.com | August 10, 2010 | 03:26 PM EDT
What’s the takeaway from Tuesday’s announcement from the Federal Reserve?

“They are not in the way.” Cramer said during Stop Trading!, meaning the central bank is doing whatever it can to promote an economic recovery.
The “Fed said good things,” Cramer said. “Buy””


Cramer and Worth are both outstanding personalities in the financial world, and both are in a way right, I more or less concur with Worth about the non-directional market, but after yesterday drop is coming close to become a bearish one.

This is my last post until after august 25 and I want to leave you with two trading ideas based on the ancient craft of point and figure chart interpretation.

Cymer Inc. (CYMI) and JDA software group Inc. (JDAS) are two companies in the technology sector and different industries, JDAS is a software company and CYMI is in the Semi-Conductor group.

On July 27 JDAS posted weaker-than-expected adjusted quarterly profit as operating expenses jumped 60 percent, but reported revenue that beat expectations.

The company earned 48 cents a share, excluding items, while total revenue rose 59 percent to $158.4 million.
Analysts on average were expecting earnings of 52 cents a share, excluding items, on revenue of $153.5 million, according to Thomson Reuters I/B/E/S.

At 12:25 PM EDT today JDAS is trading at 23 with a P/e of 90.20, it’s latest quarter figures set the following yearly results: Profit Margin 3.72%, return on assets 4.91%, return on equity 3.66% and current ratio 1.75.
Analysts estimate a 9.00% yearly growth for the following 5 years.

JDAS started a bearish formation when it traded at 24, breaking below a triple bottom formed at 25 with descending tops. Jdas stopped the down move at 22 reversing up to 25. Some traders like to short a bearish formation on the reversal move; others wait for a new breakdown. Price projections set the objective at 14.



On July 22, CYMI reported a 16% increase in revenue from the previous quarter, making this the sixth consecutive quarterly sales increase; also net income and EPS have been growing in the last 6 quarters. At 2:48 PM EDT today, CYMI is trading at 31.36 with a P/e of 15.75. With a 13.85% profit margin, ROA of 8.62% and ROE of 11.19%, some analyst would say that CYMI is a value stock.

With an estimate of 0.63 EPS for the next quarter, the forward P/e at today price is 13.81, combine that with analysts projections of an annualized growth of 19.73% for the next 5 years and you have a stock with a 0.70 PEG. Also adding to the good numbers, insiders lately have been buying the stock.

CYMI started a bullish formation when it traded at 34, almost immediately the stock reversed. Support is at 29, price objective is set at 48.


Good luck and remember short term is all about the market move, long term is about value.

No comments:

Post a Comment

BlogCatalog

Investing Blogs - BlogCatalog Blog Directory

Followers

About Me

I am a civil engineer who likes charts, to me, speculating in the markets is both a hobby and a second profession and in my view the stock market is the most honest environment, since it is only your knowledge and preparation that matters. I live, and work in the construction industry, in the Dominican Republic. I read and answer all my mail so please feel free to write sternloinaz@gmail.com Thanks, Erick