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Wall Street Strategies has been providing independent stock market research since 1991 to individual, retail and institutional clients through a balanced approach to investing and trading. Charles Payne, our founder and chief analyst, is routinely sought after for his stock market, political,... More
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  • Flying Under the Radar By: Charles Payne 0 comments
    Oct 13, 2009 1:51 PM | about stocks: BBRY, STLD, INTC

    I'm always looking for signs from the market, and one that has been occurring under the radar is how recent earnings disappointments may have already been forgiven. Research in Motion (RIMM) and Sears Holdings (NASDAQ:SHLD) are two of the biggest disappointments of the year and both stocks paid a heavy price. Yet, both are coming back, and in the case of Research in Motion it's being cheered along with a slew of brokerage upgrades.

    Sears is up 15.0% from its recent low as the dust has settled from an earnings report that missed the Street EPS consensus by 234.0%. The stock is up without any positive input from Wall Street.

    Research in Motion has gotten 4 buy recommendations this month, and it's edging higher from the recent low of $65.40.

    Afternoon Notes from WSS Research Desk

    Brian Sozzi

    Get this line I am starting to here: Retailers, carrying low levels of inventory after a year of slash and burn tactics, are suggesting to consumers to buy merchandise when they see it in the stores as it may not be there during a return visit. Or, how about this: Some retailers are actually trying scarcity tactics to drive gross margin in a challenging sales backdrop for the holidays. Believe you and me, retailers are a slick group, carefully planning out how products are aligned on shelves to adjusting a store layout to showcase higher margin products in the front. There will be serious discounts this holiday season, not to the same degree as a year ago, but they will indeed be visible. In order to obtain the best deals, a game of cat and mouse is once again in the offing. Don't fall susceptible to retailer chatter of scarcity; these companies will chase (reorder) hot trending products to maximize sales opportunities. It's in their nature, and is a reason why you as a consumer should be as vigilant in finding the best deals this holiday season.

    Conley Turner

    Crude oil is getting a lift today as the dollar loses ground versus a basket of other international currencies. The most recent move up has put oil within reach of the high levels attained for the year, and the current momentum would suggest that new highs may been forthcoming. The commodity has an inverse relationship with the U.S. dollar but investors are looking at oil as a hedge against the coming impact of inflation.

    This move up for oil comes amid reports that supplies are still building as signs of an improvement in the economy have yet to translate into any increase in demand for the commodity. By early afternoon trading, light sweet crude oil for November delivery was trading at about $73.83 per barrel on the New York Mercantile Exchange.

    Carlos Guillen

    Overall tech shares, as measured by the Philadelphia Semiconductor Index (SOX), have been oscillating between green and red territory and are currently trading a bit lower during today's trading session. After reaching its one-year high late last month at 331.0 (September 23), the SOX has been struggling to stay afloat and is now testing this level again. We believe that the main force putting pressure on the tech stocks is that the sector seems to be running out of catalysts to lift it higher. Consumer confidence and the overall level of unemployment continue to limit growth in the short-term for this sector.

    After the close of trading today, Intel (NASDAQ:INTC) will report its highly awaited earnings results for the September quarter. We think that Intel's story will certainly have a strong effect on tech shares tomorrow if they significantly miss on earnings and revenues. Also, everyone will be looking to see if end demand is ramping higher or if revenue growth is just being driven by inventory replenishments. If all goes well, revenue will have been driven by real demand, and utilization rates should considerably increase thereby boosting gross margin for upcoming quarters. It will also be interesting to observe if consumers have been opting to buy much cheaper computers, which would have a negative effect on gross margin.

    For the broader semiconductor industry, we expect a combination of stock replenishment and end demand improvement will continue to push utilization rates higher in the second half of 2010, increasing the likelihood of industry capacity expansion.

    Written by Charles Payne, CEO and Principal Analyst of Wall Street Strategies (wstreet.com) providing independent stock market research to over 30,000 subscribers, in more than 60 countries. Mr. Payne is a regular contributor to the Fox Business and Fox News Networks. For more information about Mr. Payne, please refer to the company’s website www.wstreet.com.

    Stocks: BBRY, STLD, INTC
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