I sold my Goldman Sachs (GS) shares about two weeks ago after a decent gain and moved the funds into the more diverse SSO ETF. But I am now kicking myself as Goldman continues to rally to new highs and analysts upgrade their expectations for the dominant investment bank.

Past Quarter Performance

Goldman Sachs has rallied over the past six months from near $90 a share to now over $175 a share with a recent burst from the $160 range. This rally has occurred as profits have improved steadily and analysts have upgraded the company’s expectations for future quarters. The company has beat expectations the past two quarters after having a terrible November 2008 report. But the turnaround has been quick and explosive. They fell to a $5 loss per share in November of 2008 to only turn around and report a $3.39 profit in March and then an even better $4.93 profit in June. And now analysts are steadily increasing their expectations for September, December, and the current year.

Last Friday I purchased Goldman Sachs Group (GS) as the markets quickly recovered from month lows and broke to the upside as earnings season got underway. This was after GS reported great earnings that beat expectations by 40% with analysts increasing their expectations for future quarters and the year.

Markets Jump

What a difference two weeks make? Prior to the start of earnings season, the indexes were slowly falling to new month lows and signaling a sell. But a number of companies have beaten their expectations including Goldman Sachs, Johnson & Johnson (JNJ), JPMorgan Chase (JPM), and International Business Machines (IBM), giving the bulls reason to buy.

Southwest (LUV) Flies into New York LaGuardia

Southwest Airlines begins to fly into New York this weekend as the company searches for business travelers to increase revenue in a field that it has not ventured in the past. Flying into crowded airports where turnaround times are slower and most travel is for business is something the company does not have much practice doing.

Goldman Sachs (GS) is one of the few companies with increased profit estimates in the marketplace today. Over the past 90 days their current quarter profit estimates have increased from $1.92 a share to $2.44 a share, a 27% increase. Likewise the next quarter estimates and the year profit estimates have also moved higher with the analysts that cover the stock.

Revenue and Earnings

Sales remain flat until next year when the company is projected to see an increase of 9% and earnings are still quite a bit lower this quarter compared to a year ago. But next quarter's earnings are now projected to be 19% higher than the previous year's same quarter. The forward price/earnings ratio is 11.44 for the stock which leaves room for appreciation in the price of the stock when earnings do materialize.

With a world-wide economic recession continuing, the major casino operators in both Las Vegas and Macau, China are seeing slowing traffic and decreasing profits. The stocks of casino operators Wynn Resorts (WYNN), Las Vegas Sands (LVS), and MGM Mirage (MGM) all fell Friday. MGM fell 1.5% midway through the afternoon with Las Vegas Sands falling 14% and Wynn Resorts tumbling 8%.

Analyst Lowers Targets

Lam Research Corp (LRCX) has come under selling pressure the last two days, with analysts downgrading the company after disappointing 2nd quarter results and poor guidance for the 3rd quarter from the semiconductor processing equipment maker. Analysts were already expecting weakness, with sales growth for the year in the negative 50% area. Earnings are expected to tumble 100% compared last year's results.

2nd Quarter Results

The company posted a 9 cent loss on Thursday, compared to an expected 5 cent loss for the 2nd quarter earnings. The revenue was a little bit stronger than expected, coming in at $283 million compared to an average estimate of $277 million. The company has had difficulty due to market conditions, including an oversupply of chips and falling prices.

With a recent "Buy" rating initiated by Standpoint, continued growth in revenue and earnings, and the anticipation of a large infrastructure plan by the new US Administration, Jacobs Engineering (JEC) looks like a buy at this time.

Standpoint Coverage Initiated

On Monday, Standpoint came out with an initial coverage rating of "Buy" for Jacobs Engineering. The company is a provider of technical, professional, and construction services. This is an infrastructure play that could do well in the coming year.

With a recent Buy initiated by Standpoint, continued growth in revenue and earnings, and the anticipation of an large infrastructure plan by the new US Administration, Jacobs Engineering Group (JEC) looks like a buy at this time.

Standpoint Coverage Initiated

Gilead Sciences (GILD) is breaking out of a trading range with the possibility of moving higher on analysts' upgrades, improving profitability and a patent infringement case against Teva Pharmaceuticals.

Trading Range Breakout

For the past three months, Gilead Sciences has been trading between $47.50 a share on the high side of a range and $41.50 a share on the lower end of a trading range. Just recently, the stock has pushed through the upper end of the range reaching an intraday high of $49.77. At the same time, the stock’s 13 day moving average crossed above its 50 moving average, technically signaling a buying opportunity.

Analysts Upgrade Gilead Sciences

Gilead Sciences was upgraded by Merrill Lynch on Tuesday with a new $55 target and improved earnings expectations due to the company's HIV treatments. Over the past 90 days, analysts have increased the company's expected earnings from 52 cents a share to 55 cents a share for the current quarter. For the current year, analysts are now expecting earnings to come in $2.05 a share compared to previous expectations of $1.98 a share.

With the New Year and the 2008 Tax Season right around the corner, H&R Block (HRB) is experiencing some buying interest which could translate into a buying opportunity. This past week, the 13 day moving average (MA) crossed the 50 day MA for the stock, indicating a technical break upward. The company has a decent dividend and has run from April Until July for the last four years.

13 Day MA Crosses the 50 Day MA

From a technical standpoint, the stock for H&R Block has recently broken to the upside, which could continue to run with improved fundamentals, the tax season approaching, and the overall market looking to make a similar technical buy signal. The stock has moved from $17.43 a share to $21.03 a share over the past month. Analysts aren’t looking for much in earnings improvements but see the company’s profitability remaining the same over the remainder of the year and next year.

Sony (SNE) is planning on cutting 8,000 jobs to reduce expenses by $1.1 billion as the company struggles to stay profitable. They will also delay spending on manufacturing and streamline their supply chain. Technology companies in Asia are worried that others may have to take similar steps as the worldwide slow down has reduced demand for high-definition television sets, computers, and other small electronic devices.

Stock Movement

The stock of Sony (SNE) has recently begun to move higher and is higher on the day 5% with the announced cost reductions. The holiday season has traditionally been a period of profit for the company and could surprise investors if store sales are stronger than expected. But longer term, the company needs to deal with reduced margins, falling demand, and improving its return on investment which fell to 8.6% last quarter.

Sony is planning on cutting 8,000 jobs to reduce expenses by $1.1 billion as the company struggles to stay profitable. They will also delay spending on manufacturing and streamline their supply chain. Technology companies in Asia are worried that others may have to take similar steps as the worldwide slowdown has reduced demand for high-definition television sets, computers, and other small electronic devices.

Stock Movement

The stock of Sony (SNE) has recently begun to move higher and is higher on the day 2% with the announced costs reductions. The holiday season has traditionally been a period of profit for the company and could surprise investors if store sales are stronger than expected. But longer term the company needs to deal with reduced margins, falling demand, and improving its return on investment which fell to 8.6% last quarter.

Freeport McMoRan (FCX) stumbled out of the gate this morning after releasing an earnings report that showed slowing demand for copper in China as the world begins to worry about slowing economies everywhere. The price of copper fell dramatically over the past quarter after an incredible run with a number of other commodity names like oil, gas, wheat, coal, and others. This drop in pricing power made it difficult for the Phoenix based miner and producer of gold and cooper to make it's expected earnings numbers for the quarter.

Missed the Quarterly Badly

Shares of International Game Technology (IGT) have rallied 9% from their 52-week low struck on the 23^rd of September and present a good opportunity to short the stock. The stock again rallied 10.2% on Friday on a Goldman Sachs analyst opinion of increased sales in the next quarter.

Fundamentals

Corning Inc (NYSE:GLW) continues to slide reaching a new 52 week low today after being downgraded by RBC Capital Corp and cutting their third quarter outlook yesterday. But the current price/earnings ratio is too low for a company with the earnings and revenue growth displayed.

Third Quarter Troubles

Strong Call option buying in Akamai Technologies (AKAM) on Friday is a positive sign for the company. Most of the buying was in the front month of September with some additional buying in the October Calls noted.

Unusual Call Volume

Whole Foods Market Inc (WFMI) finished the week with a little uptick as volume spiked at the close on Friday, but the week's chart looks similar to Freddie Mac (FRE).

Of course, Freddie Mac dropped 43% this week while Whole Foods only dropped 6%. But the continued slide looks similar.

With a very nice 5 day run on high volume, Almost Family Inc (AFAM) still looks like a buy. With revenue growth close to 50% and earnings growth at 95% year over year for the current quarter, the stock at a 26 price/earnings is a good purchase.

Volume

Medical Stocks have been showing continued strength with the overall market uncertain if the correction has ended or the current uptrend is just a pause before another leg down for the markets. Celgene Corp. (CELG) is one of the strongest of the medical/biological companies that should continue to appreciate in value.

Analysts Upgrades and Sales Growth