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As a contributor to the New Low Observer (http://www.newlowobserver.com/about-this-site), we intend to give new insights on a low risk approach to trading in dividend paying stocks for tax deferred accounts. The New Low Observer (http://www.newlowobserver.com/about-this-site) is not intended for... More
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  • Bitcoin Downside Targets

    On November 19, 2013, we provided our best estimates of what the downside and upside targets were for Bitcoin (found here). In our assessment, we said the following:

    "Our conservative downside target for Bitcoin, based on the peak closing price of $785.50 is $384.83. The extreme downside target is $261.83. The worst case scenario is for Bitcoin to fall as low as $152.83 as indicated by the red line on the chart.

    As we've written many pieces on the topic of Edson Gould's Speed Resistance Line, we've made some observations that we think should be highlighted at this time. For the first time, we're going to provide what we believe might be an upside target. In the case of Bitcoin, the next conservative upside target is $1,154.49 if the most recent peak of $785.50 is exceeded. This is a tentative estimate based on observations of the many successful downside SRLs that we have run in the past. We'll be on the lookout for what may come next."

    The most updated Bitcoin chart demonstrates the value of Edson Gould's Speed Resistance Lines' ability to give informed estimates of upside and downside targets. In the case of Bitcoin, The upside target was achieved and exceeded by 7.23%. After achieving the upside target, Bitcoin has declined from the recent peak of $1237.96 down to the conservative downside target of $535.65. The conservative downside target is based on the updated peak in the price for Bitcoin using the guidelines for Gould's Speed Resistance Lines.

    (click to enlarge)

    With the conservative downside target being achieved, the extreme downside target of $412.65 and the worst case level of $152.83 are all that remains. However, in the last 24 hours, Bitcoin has declined as low as $455. This suggests there could be a significant appreciation from the current level as the conservative downside target has been achieved. Our revised upside target is now $1,606.95.

    Those willing accept the extreme volatility and political risk should seriously consider Bitcoin at or below the $412.65 ascending line with a willingness to see a decline of -62.96%.

    Tags: COIN, Bitcoin
    Dec 18 12:57 PM | Link | Comment!
  • Sysco Hits Our Upside Target, Retest Should Follow

    On September 26, 2013, we purchases a 19% position of Sysco Corporation (NYSE:SYY). Since that time, SYY has gone from near a 1-year low to a 1-year high all within three months. Today it was announced that Sysco Corporation would merge with U.S. Foods. The fair value target in our transaction alert on September 26, 2013 (found here) has been achieved but we expect that the stock will close below the fair value level on the day. Dow Theory suggests that SYY should re-test the fair value level at least once more.

    (click to enlarge)

    Our upside targets for SYY are substantial from a fundamental standpoint. However, we'd rather draw your attention to an article that we posted about companies in the industry and how Warren Buffett is utilizing similar companies as a hedge on the coming inflation. The article, titled "Warren Buffett Leverages Up on Inflation Hedge" (found here), outlines a longstanding thesis we have that if you believe inflation is coming then food processors, producers and distributors is the best way to take advantage of this trend going forward. We recommend considering related stocks once they hit our watch list as SYY at current prices are not as compelling as when we purchased the stock.

    Disclosure: I am long SYY.

    Tags: SYY, SYY
    Dec 09 1:35 PM | Link | 2 Comments
  • Nasdaq 100 Watch List Review

    Below is a table from our December 6, 2012 (found here) Nasdaq 100 Watch List and the performance of each stock. The entire list of stocks gained an average of +39.73% while the top five stocks (WCRX, BIDU, VOD, BBBY and MCHP) gained +63.72%. These gains compare to the Nasdaq 100 gain of +32.28% in the same period of time.

    SymbolName20122013% change
    WCRXWarner Chilcott plc11.3122.93102.74%
    BIDUBaidu, Inc.88.47168.7190.70%
    VODVodafone25.8737.7245.81%
    BBBYBed Bath & Beyond Inc.57.7978.1335.20%
    MCHPMicrochip Tech30.2243.5644.14%
    INTCIntel Corporation20.124.8223.48%
    ALTRAltera Corp.31.0832.123.35%
    MSFTMicrosoft Corporation26.6338.3644.05%
    CTXSCitrix Systems, Inc.60.1360.03-0.17%
    NVDANVIDIA Corporation11.9515.4729.46%
    EXPDExpeditors Int'l of WA36.7843.4418.11%
    SPLSStaples, Inc.11.3715.9640.37%
    FLEXFlextronics Int'l5.97.4826.78%
    KLACKLA-Tencor Corp.46.5362.6534.64%
    ATVIActivision11.2817.252.48%
    AMATApplied Materials10.7616.8356.41%
    DLTRDollar Tree, Inc.40.2855.1736.97%
    APOLApollo Group Inc.20.1825.0624.18%
    ^NDXNASDAQ-1002,649.123,504.2632.28%

    Disclosure: I am long INTC, KLAC.

    Dec 09 3:18 AM | Link | Comment!
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