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Thomas H. Kee Jr., is President and CEO of Stock Traders Daily. The Stock of the Week Strategy offered by Stock Traders Daily may be the best performing strategy on the market since December, 2007 (before the credit crisis), and "The Investment Rate" is arguably the best measure of the... More
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  • Stock Traders Daily Advised Clients To Buy AMZN

    Stock Traders Daily recently recommended Amazon (NASDAQ:AMZN) as a buy to its clients, this article will include the conditions upon which that was recommended, but in addition this article will attempt to reveal facets of this business that are often overlooked by individual investors. The goal, in addition to discussing the call to buy Amazon particularly, is to help individual investors find opportunities like this on a regular basis. They say if you can teach a man to fish, you have fed him forever.

    First, I have been widely publicized as a critic of Amazon based on valuation. I criticized earnings and price appreciation in particular, but until recently Amazon was a darling. In recent months, the perception has changed, but that also may be cyclical because its busiest season, the holiday season, is almost a year away. Like other retailers, Amazon goes through cycles, and if there's no compelling reason to buy the stock it may come under pressure. Because the holiday season from last year is behind us, some investors might consider Amazon to be in a state of limbo.

    When this happens, it can create opportunity, even for critics like myself. In order for that to be true, however, the critic must first remove his bias. The objective needs to be determined before the observation is made. In this particular case, our objective was to make money. It was not to own Amazon because we believed Amazon was a great company, or that we like Jeff Besos, it was only to make money. Because our objective was as simple as that, our approach to determining proper entry levels for this investment was also very simple.

    The problem most investors face is that they fall in love with one stock, and they tend to not look beyond what they are in love with. Usually, that comes on the heels of a successful trade. Many people have that feeling today with Facebook, because Facebook (NASDAQ:FB) recently increased aggressively. They are falling in love with it, and instead of looking for other stocks that have the opportunity to increase aggressively, investors tend to have blinders on after successful trades.

    I remember my uncle having this exact problem because we made about 200% in laser eye surgery stocks back in the 1990s. We had a great run, but he would not let it go. He kept buying these laser vision companies, and they soon went out of favor. He did this because he fell in love with the trade, but love is an emotion, and there is no place for that in this business.

    Without a doubt, I'm not in love with Amazon at all. We're in this to make money, nothing more, and according to our correlation filters Amazon triggered based on a test of longer term support as that is defined in our real time trading report for Amazon. Our recommendation to clients was based on price, given that test of support, not on the valuation metrics or our appreciation of management.

    By focusing on price, we also effectively remove golden handcuffs like those some investors might currently have bound to them after investing in Facebook, and like my uncle did back in the 1990s with laser vision stocks. Golden handcuffs can be the worst thing for individual investors, and interestingly those are usually the direct result of a successful trade.

    In order to make money consistently, individual investors should avoid the temptation of falling in love with any particular company. In our situation with Amazon, I am still a critic, but because the stock tested our longer term support level we were buyers, and we intend to hold that position until such time as the stock tests our longer-term resistance level, or profit stops are hit.

    Lastly, according to our real time trading report for AMZN, we do see upside potential in the stock, but we prefer to buy near tests of longer term support because by doing that we also have clearly defined risk controls. Trading in the middle of the trading channel is not advised because risk controls widen considerably when mid-channel trades are made.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Business relationship disclosure: By Thomas H. Kee Jr. for Stock Traders Daily and neither receive compensation from the publicly traded companies listed herein for writing this article.

    Additional disclosure: AMZN was recommended as a buy to clients of Stock Traders Daily.

    Mar 05 1:11 PM | Link | Comment!
  • Tuesday's Stocks To Watch

    The proposed budget talks on Capitol Hill are dominating the news headlines, but in the pits, where stock price matters, a handful of stocks are being watched closely. Quite often investors become distracted by a headlines offered by the media, and when the Government is involved some investors actually get frozen in their tracks, but this time the talk on capitol hill is actually something main street seems to embrace.

    Main Street wants the government to get out of the way, and reasonably so does corporate America, but if the Government does get out of the way will that also opened the door for tapering? More importantly, if it does open the door for tapering well it also allow a tapering schedule that is almost surely to be associated with the first round of tapering to be more aggressive than it otherwise would?

    The answers to the above will come over the next week or so, but between now and then the stocks featured below may have already moved. The stocks were found using the real time stock filters at stock traders daily with focus on longer term trading plans. Most of the stocks listed below are testing resistance, and only one is testing support, a ratio we would expect given the proximity of the market itself two relative highs.

    The following stocks were featured prominently in my stock filters this morning. Please click any of the symbols and open the longer term trading plans for details.

    LLTC

    Resistance: At or very close to longer term resistance

    TEVA

    Resistance: At or very close to longer term resistance

    JCI

    Resistance: At or very close to longer term resistance

    NSC

    Resistance: At or very close to longer term resistance

    SU

    Support: At or very close to longer term support

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Additional disclosure: These alerts came from our real time stock filters.

    Dec 10 10:41 AM | Link | Comment!
  • SIRI Is A Buy At Support

    By Neal Rau

    Sirius XM Radio Inc (NASDAQ:SIRI) shares have doubled over the past two years, as the company has benefited from very strong auto industry sales. The stock has fallen about 12% from the 52-week highs made in last October, which capped a four-month run-up of over 30%. Traders who bought the dips in SIRI over the past few years have been rewarded, as every dip has been a buying opportunity, so is this just another buying opportunity for SIRI?

    Sirius posted its Q3 numbers on October 24, which showed subscriber revenue increased 10% year over year. During the first nine months of the year, subscriber revenue increased 11%. For the full year, Sirius expects total net subscriber additions of approximately 1.6 million, up from the previously expected 1.5 million.

    The company missed analyst estimates, only earning $0.01 versus the $0.02. The stock made the yearly highs a few days before the earnings report in late October but shares have been sliding lower since. Based on the SIRI real-time trading report published by Stock Traders Daily, the stock is near a test of longer-term resistance. This article will discuss our strategy going forward based on this report.

    Sirius has over 25 million subscribers and sales were $3.4 billion in 2012 and expected to be almost $3.8 billion in 2013. The company does compete with Pandora Media Inc (NYSE:P) and Apple Inc. (NASDAQ:AAPL), but its dominance in auto related businesses gives the company a unique platform to build upon.

    The auto industry deals remain strong for Sirius next year. Chrysler announced that all Chrysler, Jeep, Dodge, Ram, SRT, Fiat, and Mopar customers will receive a one-year SiriusXM subscription when purchasing any 2014 model year vehicle with a satellite radio-equipped Uconnect System. The one-year SiriusXM subscription includes every premium channel available on their satellite radio, plus access to SiriusXM Internet Radio.

    Sirius and Honda Motor Co Ltd (ADR) (NYSE:HMC) have extended their relationship to January 2020, significantly increasing the penetration of Sirius XM factory-installed technology in new Honda and Acura vehicles. Starting in 2014, Honda will steadily increase the penetration of Sirius XM across its entire vehicle lineup.

    Based on growth in new automobile sales and an increasing number of existing self-pay subscribers selling their cars and rotating back into the trial funnel, the company increased its guidance for net subscriber additions. Sirius also increased introduced new guidance for continued growth in 2014 in both revenue and adjusted EBITDA.

    Sirius took a step toward diversifying within the auto industry when it acquired Agero for $530,000. Agero offers two-way wireless connectivity in safety, security, convenience, maintenance, data services, and vehicle diagnostics. Sirius can leverage its dominant position in the radio and vehicle industry to break into the internet connected car market. Telematics systems for navigation and entertainment, as well as communicating things like speed and gas mileage to drivers via the dashboard have a big future in the coming years.

    However, Sirius will need to develop the infrastructure quickly, as the company's radio services are now facing competition from portable devices capable of connecting to vehicles with the internet, which could hinder the company's ability to attract new customers and retain current subscribers.

    In the end price is what makes us money, but based on the Stock Traders Daily real-time trading report, SIRI is testing long-term support, and according to the rules that govern our strategies, we are buyers near support. If support holds, we would expect shares to move higher and eventually test resistance. By definition we prefer to buy near support levels when they are tested because that allows us to maximize our return, our target is resistance, and we want to get the complete oscillation from support to resistance, but it also helps us control risk and determine our stop-loss.

    Stock Traders Daily has been providing comprehensive market analysis, and correlated trading strategies since January 2000, which was the virtual peak of the Internet Bubble. Our objective is to provide strategies capable of making money in any market environment, and we have been doing that since inception.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Business relationship disclosure: By Neal Rau for Stock Traders Daily and neither receives compensation for writing this article from the publicly traded companies listed herein.

    Nov 25 8:43 AM | Link | Comment!
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