Monday, June 27, 2016

How I Did Last Week

As promised to my followers, I am going to share the results of stocks that I had highlighted just 2 weeks ago in my blog on June 6th. My market outlook at that time was very dim. We had a pathetic jobs report of just 38,000 jobs created in May when in my view we should be looking for 200,000 to 300,000 range. The slow down in job growth and lower labour participation rate has been the theme for the last several months. Bulls have run out of breath after 7 yrs 6 months of bull market and it best to just follow the institutions. They have been piling their profits in dividend paying utilities and consumer staple stocks. They have been defensive in their investments and I found it best to look at GOLD mining stocks and staple items like FOOD.

Here is the summary of stocks highlighted:

  1. $AU  entry $15.96 up $16.77
  2. $ABX entry $19.73 up $20.47
  3. $AEM entry $48.47 up $52.03
  4. $NEM entry $34.99 up $37.19
  5. $GDX entry $25.13 up $$26.71
These are GOLD stocks that have attained over 6% profit in the last 2 weeks. I had planned for 10% as a profit target and 5% as a loss target.

Dividend paying stocks that I had highlighted were:


  1. $OKE entry $44.33 up $45.82
  2. $BGS entry $44    up $46.66
These stocks have attained over 5% profit overall and I had planned for 8% as a profit target and 4% as a loss target.

I had a failure as well. $AVGO was highlighted for entry @ $159.75 but was triggered for a loss @ 4% with a contingent order in place.


My Market Sentiments this Week

Brexit was not a good thing for the markets world wide. UK is the 5th largest economy and it is the first domino to fall. We are all interconnected and what happens in one part of the world is going to affect all of us. Most bull markets in US have been 5 years long and our current bull market has run over 7 years now. We are heading into the 2nd quarter earnings confession booth in two weeks. Increased earnings and increased sales is what drives the price of a stock. Projections are that this will be the 5th quarter of lower sales and lower earnings with $SPY. I have the following as my lower targets for the 3 major indexes.

  • $DOW ... 16,500
  • $SPY  ... 194
  • $QQQ ... 96.50
These targets may not be reached this week but I am keeping that as my support area. Quite often market bounces back a little after a dramatic move down of over 3.5% on Friday. History suggests that when the indexes drop to this level on Friday, Monday trading sessions it drops even further. This happened recently on Friday August 21st when the $SPY dropped 3% only to be followed by another 5% drop on Monday. Volume on last Friday June 24th was just as heavy as the one on August 21st. Monday following the volume increased even further by another 25%  Does history repeat? 

Stocks on My Watchlist

  1. $MLM
  2. $VMC
  3. $MO
  4. $SJM
  5. $DLTR
  6. $WEC
Once again I am looking at US centric, dividend paying and food stocks. They pose less of a currency risk and these are the stocks that institutions are favouring. They all show an IBD RS ratings of 90 and above and rising recently. 

Happy Trading!

Amin 


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