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Stock Tiger Stalking Stocks™
For Monday October 15, 2007
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Close Friday
Dow +77.96 at 14093.08, Nasdaq
+33.48 at 2805.68, S&P
+7.39 at 1561.80
 On
October 15 1951 - "I Love Lucy" debuted on CBS-TV. For the next
20 years, Lucille Ball would be a TV regular.
On October 15 1990 - Mikhail Gorbachev, President of the USSR
(1985-1991), won the Nobel Peace Prize.
On Friday it was announced that Al Gore was the co-winner of the 2007 Nobel Peace
Prize for warning the world about the dangers of global warming,
and leading the campaign to persuade governments and individuals
to reduce their reliance on fossil fuels. He won this jointly
with Intergovernmental Panel on Climate Change.
This week the market was doing pretty well until
late Thursday when the Nasdaq seemed to start the pullback which
they say may have been prompted by an inflation warnings
made by a European Central Bank Council member. In his opinion
the ECB may need to raise rates to a "restrictive" level due to
European inflation risks. Actually the rally in the first part
of Thursday was rather strange as the September same-store sales
retailer reports were not good. I guess they were expected to be
that way. On Friday though September retail sales reportedly
rose 0.6%, stronger than the expected gain of 0.2%. For sure you
cannot outguess the reports as they can reverse each day.
Friday brought Deutsche Securities downgrading
Citigroup to Sell from
Buy and GE was quite weak but the markets still were able
to put in a decent rally and take back some of the losses from
Thursday. McDonald's MCD
said they expect to beat when they report and ORCL
made an all cash offer to buy BEAS for $17 per share.
This helped the rally in tech land. This week
starts the earnings reports from
many leading companies. 13 Dow components are due to report
their results and the financial and
technology sectors dominate the earnings calendar.
It will be telling to see if this is going to be
a "sell the news" kind of earning's season when stocks have been
priced for good reports so the actual announcement of them creates
sell offs.
I read that the downside volume for the NYSE is
the lowest level since Christmas time in 2004 so just another
indicator that we will likely soon see a top in the market. In the
start though of 2005 the NYSE only dropped 300 points - then
recovered and resumed its rise. With a pretty good chance of
recession in 2008 do to increasing unemployment plus the housing and
mortgage problems the markets may not as rapidly recover when they
finally do take a real fall. One thing though that may be helping
hold things up was recently pointed out. Money manages do not want
to be underinvested at this point as they need to at least match the
benchmark S&P 500 for their job security. They do not care too much
if their clients loose money if the market pulls back as long as
they do as well a the S&P. If however they are not invested and the
market keeps going up it could cost them their bonus or their jobs.
A reason to be careful about letting someone else handle your money.
BTW this week is the 20-year anniversary of
the Oct. 19, 1987 market crash when the
Dow dropped 22%.
The weekly sector performance:
The weekly index performance showing the continued under
performance of the Russell 2000.
The Dow Jones index
closed virtually flat on the week.
The transportation index back at its
moving averages so not conclusive about anything.
The Nasdaq had a high volume drop on Thursday and a lower
volume bounce on Friday. The longer term chart may tell more below.
This longer term weekly
Nasdaq chart shows some minor negative divergence on the MACD
and the volume has been under the average volume during this gain.
You can see that the Nasdaq has spent most of its time in the center
of this channel in the last 4 years and times close to the top or
bottom have been relatively short lived. It is now pretty close to
the top and we may still see a blow off rally to the top at near
2900 but if so that will likely mark the top for some time. The RSI
is near 70 and stochastics already over 80.
The QQQQ Nasdaq 100
monthly is not too far from the 62% retrace we pointed
out last week and with volume decreasing, one last push could
present a shorting opp.
The SOX semiconductor
index is for sure not a winner. The Nasdaq has been making its
gains without the help of the semis. However we note that the
stochastics are now at 20 and a dip below may set up a new rise.
The NYSE about unchanged
so just watching the trend line and if broken then the one below.
Stochastics so far are rolling over a bit.
The Russell 2000 in
another little island type pattern where one could play the futures
on it when it breaks to either side.
The 30-year bond yield
Back above the channel but under the 200-day. The bond traders
control the long term rates and it looks like they want them up but
as yet it is un decisive.
NYSE percent of
stocks over their 50-day moving averages is now at levels where
in the past we have seen pullbacks begin.
Bullish percent this is not yet too overly
bullish but the market sure acts like it.
Japanese Yen has fallen to possible
support so watch as a bounce here may mean a market pullback. --
though a drop under the 200-day may also make a market rally.
Gold added about a percent during the
week. We had some moves in our watch list gold stock buys lately but
no grand ones.
US Dollar it really is weak. It makes stocks cheap for those outside the
USA and I read that cab drivers are getting much better tips from foreign
tourists visiting the USA. This will help sales overseas for US companies but
all US residents are paying a lot more for imported products. When this finally
bottoms sometime in 2008 there may be a multi year rise - I hope.
Value Line pretty close to its former
high.
The economic calendar from briefing.com
NNRI had a nice two day rise this past week and is now
just at the top of its 2 1/2 week range. This and next month are
very likely to be good ones for the company and the stock. We
know that the company expects soon to receive the technical
request from E.ON of Germany for an installation of the
first production run of its composite shielding materials in a
nuclear facility in Central Europe. The plan of NNRF is to
receive at least 50% of its revenues from income outside of
Russia and this will be the first major step in this.
Ramadan ended this weekend and the company said that they would
then present their plan to the Egyptian Environmental Affairs Agency
where they intend to sign a global agreement thereafter regarding
the handling, containment and the disposal of high level hazardous
wastes in Egypt. This global agreement will identify the priorities,
amounts and terms of the engagement of NNRF by the Arab Republic of
Egypt.
Thirdly the company stated that in regards to their power quality
products in Tartarstan, NNRF's sub-distributor, SKI, will be meeting
with representatives from KSU and TGP to discuss the results of the
testing during October, after which NNRF anticipates commencement of
the installation of PQ equipment in government facilities throughout
the Republic of Tatarstan. Earlier this year the company raised its
sale's projections for this dramatically for the next several years.
We also expect to see earnings reports from ATOLL as soon as the
auditor has completed it. With all these things going on it is no
surprise that we again are seeing buying interest. The trend line
break out now is at about $3.00 as are the moving averages. Note
that the stochastics have given their buy signal by rising back over
20 while the volume picked up on Friday.
PLTG
has rallied above resistance then drooped back to test the moving
averages and successfully risen again to back above the resistance
line. In last week's newsletter we pointed out the low trend
line buy point and it has risen nicely from there about 47%
for the week.. We feel very positive abut the company had how they
are progressing. They had news this week:
Platina Energy Management Announces
Acquisition Buying Spree
they said that they will soon be announcing several acquisition
prospects under joint venture arrangements with various Investor
Groups. These joint ventures are very good situations as they
greatly lower any risk to the company and costs while still
providing for much earning potential. About this they stated that
their target is to have net interests from these acquisitions that
would yield the equivalent of 500-1000 barrels per day of production
to Platina by mid 2008.(the high end of that is about $2.5M per
month) This activity greatly ramps up the timing not only to get to EBITDA
profits but to net ones. They had additional news
also this week:
Second Gas Well Reaches Total Depth
in TN; Excellent Indications
In this they announced an addition natural gas well
in Tennessee has reached depth. This now is 5 wells that have been
drilled there and they stated that they will be adding to
their production such that operational profitability is just around
the corner-perhaps as early as next quarter. We look forward to
these additional joint ventures as they most certainly will add
greatly to the already solid situation with the company's progress.
Note that from today's price of $0.27 it will be a
nice 100% gain just to return to the $0.54 cent break out
price - the point some will wait to start buying. Remember our 12
month EBITDA forecast is much higher than the stock price
alone is today so the upside potential is excellent. Volume is also
again returning to the stock so seems an very good point to buy as
MACD is about to cross above the 0 line.
NPWS is also still holding above its 50-day
EMA. The main thing to say is that the company proved that their
fuel cell works. They of course have now much work in
refinements and scaling the size down while increasing the power and
work on other designs. This is still a stage though where they can
receive funding from the government and joint partners to provide
income while they progress. We do not know at what point the
investing community will decide to latch on to this stock but they
are progressing and have proven themselves and the current support
is at the 50-day as shown.
On other other long term stocks of interest:
CFPC had news
Coffee Pacifica Launches 5 Roasted Coffee Blends
for China Coffee Market The company
is advancing for the opening of stores in China and they have made new roasted
blends for that market. They will make excelled margins on the roasted coffee.
We hope soon to hear the report about the containers that have arrived in the
USA and other places. The stock is in the same range it has been in for a while
but we saw how it can quickly jump up. We know full well that the stock will be
much higher in the months and quarters ahead as the company is progressing. One
day the sellers will be finished and the buyers will take over.
CYRX has been doing well holding above $1 and we also await news on the
progress they are making. HSXI sill waiting on the infomercial for
enSonic@home to start and for SIBE would want to see the completion of
the merger and we know the Hats! productions will begin again in January.
Now some additions to our watch list:
Remember it is now earnings season so
Check the
Earnings Calendar
on all overnight holds
UTI Over $20.27
RBN Over $60.40 then $64.18
MEOH Has a level at $28.00 or
$28.12 then to $28.00 top
MTOX Over $22.00 on good volume
IRBT Short
under $17.18 - may have support at $16.50
TRMP On break out of flag around $8.40 -
$8.50 depends on price at day of break
BRKS Short
under $13.49
ORBC Back over $9.20 aggressive or $9.33
50-day EMA
AAV Over $12.45
NSTC Over $11.37
ARTG Over $3.40
SANM Over $2.34
UMC The 3 day pullback to it to the 38%
retrace so watch for a possible bounce up from here.
The photographs are by
Daniel Bayer - great clouds in the first one - beautiful
shot
http://photo.net/photodb/member-photos?user_id=321228&include=all
My first paragliding flight
Lights Out
The Maroon Bells
in full moonlight
That's a full lid for today - will see you all
during the week.
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Check the
Earnings Calendar
on all overnight holds.
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