Saturday, September 12, 2009

Jim Van Meerten - BarChart Stock Market Momentum Indicators W/E 9/11/2009 - CODE GREEN

At the close of each week I try to evaluate the Stock Market's Momentum by looking at some key indicators I've learned to trust that are published on BarChart. I have no crystal ball and I'm not a Technical Analyst that thinks he can interpret the tea leaves and the alignment of the stars and predict the future. I use a common sense approach to see if the Stock Market is trending up or down, determine how strong and how long that trend has continued and cross my fingers it will continue. Sometimes it's good to be in the Market, sometimes it feels better to sit this week out. Let's see what happened this week.

Momentum of the Value Line Index - I use this index because it is a broad based index of about 1700 stocks and covers about 95% of the US Stock Market capitalization
  • BarChart ranks the Index as a Overall 96% BUY - 12 of the 13 indicators BarChart uses are BUY and only 1 is a HOLD - looks good
  • The VLA is trending above its 20, 50 and 100 Day Moving Averages (DMA)

BarChart Market Momentum - this week looks at the direction of the 6000 stocks that traded.

  • 78% of the stocks closed above their 20 DMA
  • 83% of the stocks closed above their 50 DMA
  • 88% of the stocks closed above their 100DMA
  • This is stronger than last week's closings and is positive

The ratio of how many stock hit new highs vs. how many hit new lows - any number above 1.0 is positive, below .99 negative

  • 20 day ratio - 2222 new highs/ 227 new lows = 9.8 pretty strong
  • 65 day ratio - 1563 new highs/ 104 new lows = 15.0 very strong
  • 100 day ratio - 1414 new highs/ 91 new lows = 15.5 very strong

Overall it seems like the Stock Market is trending upward and will continue - A BUY CODE GREEN

NOTE: I've been asked why is use 3 different methods that seem to give parallel information. Good Question - It's because each of these 3 methods has some tracking error in them. Example: In one of the worst weeks in the Market last year there were 26 stocks hitting strong new highs on the AMEX. When I examined closely I found that all 26 were inverse ETFs. By using all 3 methods I hope not to get caught off guard by a tracking error in any one of them.

Remember: This Financial Tides is an instructions site that tries to teach you to trust your experience, knowledge, common sense and a good stock screening tool like BarChart to beat the Market on your own

Changes to Jim Van Meerten - BarChart Model Portfolios W/e 9/11/2009

Deleted from the Jim Van Meerten - BarChart Short Portfolio: GMXR GMX Resources and NTLS NTELOS Holdings - both of these stocks are showing signs of recovery and are presently trading above their 50 day moving averages on BarChart. I've covered these short positions

Deleted from Jim Van Meerten - BarChart Stategy Lab Portfolio: TLP Texas Pacific Land - this stock hasn't been maintaining its upward momentum and is present trading below its 50 day moving averages

Performance of these portfolios can be followed Marketocracy

Changes to Jim Van Meerten - BarChart Model Portfolios

In the next few days I will be posting links to several model portfolios that I have been running on Marketocracy. I have been using BarChart to manage these portfolios and use Marketocracy to independently measure their performance. You will be able to follow these additions and deletions on this site and maybe even make some similar trades in you own portfolio. There will be:

  • Jim Van Meerten - BarChart S&P 500 Portfolio - A portfolio using only the large cap stocks included in the S&P Large Cap 500 Index

  • Jim Van Meerten - BarChart S&P 400 Portfolio - A portfolio using only the mid cap stocks included in the S&P400 Mid Cap Index

  • Jim Van Meerten - BarChart S&P 600 Portfolio - A portfolio using only the small cap stocks included in the S&P 600 Small Cap Index

  • Jim Van Meerten - BarChart New High Portfolio - A portfolio using BarChart to screen for stocks that are trading more than 100K shares a day and hitting the most new highs in the last 20 trading sessions

  • Jim Van Meerten - BarChart SLO Portfolio - A portfolio that is a continuation of the portfolio I used to win the Strategy Lab Open sponsored by Investor Place Media. This portfolio will also use BarChart to screen for stocks hitting the most new highs but will concentrate on more thinly traded stocks trading between 25K - 99K a day

  • Jim Van Meerten - BarChart Short Portfolio - A portfolio again using BarChart to find stocks trading over 100K shares a day hitting the most new lows over the last 20 trading sessions.

At any time these portfolios may be non-compliant with Marketocracy's Compliance rules. Marketocracy requires all funds to be invested at all times with at least 65% in positions and no more than 35% in cash. If I can't find enough proper trades that meet my criteria my fund might hold more than 35% cash.

Anyone who tried to stay full invested during this last Stock Market Crisis can see the value in not riding a dead horse into the ground.

I hope that by having model portfolios what have a mix for large, mid and small cap stocks plus stocks trading at new highs and lows there will be a little something for everyone in this site.

If any of my posts are unclear please ask questions or make comments for improvement. The goal of this site is to help you become a better investor through the use of my 40 years of experience, knowledge, common sense, discipline and a great stock screener: BarChart.

Disclosure: I promise not to hold any of these positions in my personal portfolio, You'll never have to worry about any front running or pump and dump recommendations on this site.

Wednesday, September 9, 2009

Nighthawk Radiology May Be Ready to Fly - NHWK

For my Financial Tides readers I always try to find companies that are getting attention now and will show price movement immediately. One of the easiest was to find such companies is to screen for companies hitting the most new highs using BarChart. This evening I found a company that has hit 14 new highs in the last 20 trading session for a monthly gain of 52.08%.

That company is Nighthawk Radiology Holdings NHWK. The company is one of the leading providers of overnight and off hour radiology services for hospitals, clinics and imaging centers and should get increased revenue if the new health care plan is implemented.

BarChart's 13 technical indicators all rate this stock a 100% BUY. Why am I sure the movement will continue? Morgan Stanley has invited this company to speak at their Global Health Care Conference on September 15 so there will be some press buzz.

Reasons to buy:
  • Recent strong price movement
  • BarChart rates it a BUY on 13 of 13 technical indicators
  • A product that is essential to health care
  • An opportunity to get great press coverage in the coming week.

BUY with a stop loss at 6.67. Let me know if it works for you.

Disclosure: No Positions held at time of posting

Tuesday, September 8, 2009

As the Economy Recovers Zenith Might Hit New Peaks - ZNT

Zenith National Insurance Corp. - ZNT is a pure recovery play. The stock is depressed for 2 reasons: 1- As payrolls in the manufacturing sector contracted so did the underlining payroll insurance premiums and 2 - like all insurance companies they make money investing on the time spread between the time they collect premiums and the time they pay benefits.

When the economy recovers, the investment portfolios should increase in value and when new workers are hired premiums should increase.

There has been recent price action to the upside and BarChart has BUY signals on 12 of its 13 technical indicators. New high have been hit in 7 of the last 20 trading sessions including 4 of the last 5 trading sessions,

I call a BUY with a stop loss at 25.43

Monday, September 7, 2009

Dreams come true at Dream Works Animation - DWA

Dream Works Animation is the stock of the day coming up on my BarChart screens. The company is rated a 100% BUY for all three rating periods: short, mid-term and long-term. The stock price has hit 7 new highs in the last 20 trading sessions. Nice addition to any portfolio.

The company develops and produces Computer Generated Animation feature films with 17 films presently on it's shelves. Its major competitors are Blue Sky Studios, Pixar and Walt Disney Feature Animation; all 3 are privately held so this is the only one of the 4 you can invest in.

The Company has profit margins of better than 20% and has maintained that for several years. Although it seems to be a great stock fundamentally, it's even a better buy on technical analysis.

As previously stated BarChart give it a 100% BUY rating on all 13 of its technical analysis indicators. The stock has hit 8 new highs and the last 65 days with an 18.83% price appreciation and seems to have some legs to it to go even higher.

It's a buy at this price and you should fells save with a stop loss at 30.

Addition Information:

Dream Works Web Site