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What Stocks Are Hot And What Is Not

Good employment data pushed market higher Friday and for the week as well. Nasdaq closed at 2905.66, a new year and a new 10 year high. DJI closed at 12,862.23, only 14 points away from year high and not far from its all time high of 14,198.10, achieved in 2007. S&P 500 closed at 1,344.90, still has some distance from year high. Stocks are not expansive if you compare them with their historical PE. But on the other hand, all major indexes are short term overbought and subject to have pull backs.

What Stocks are Hot and What are Not

While indexes are in year high, many stocks are in year low. The followings are some of the hot sector and hot stocks in hot sectors as well as stocks/sectors which are not hot:

Hot sector and hot stocks:

Residential Construction and Building Materials: RYL, TOL, LEN, PHM, PATK, ... ;
Technology: AAPL, PCLN, FFIV, LQDT, SIMO, XRTX, BVSN, ACFN, MSFT, CSCO, INTC, QCOM, FSII, ...
Credit Card Services: MA, V, GCA, ...
Casino: LVS, MGM, ...
Agricultural Chemical: CF, MON, ...
Defense, Restaurant, Biotechnology: HALO, MDVN, PCYC, FUEL,

Sectors which are not hot:

Solars: JASO, SOL, HSOL, LDK, STP, CSIQ, TSL, YGE, ...
Coal: BTU, ANR, ACI, JRCC, PCX, ...
Oil and Oil Services: RIG, BHI, BAS, CJES, SPN, RES, EXH, PDS,
Metals: REE, MCP, USU, DNN, AKS, X,
Financial Service and Banks: BAC, C, AIG, HIG, RDN, ...
Communication Related: PWAV, CIEN, JDSU, PCX, S,...
Shipping: DRYS, PRGN, EGLE, DAC, NM, FRO, ...
Autos: F, GM, MTOR, etc.
China ADRs: HEAT, RCON, CIS, NFEC, SYSW, KONE, CMED, FEED, LZEN, CHC, VALV, SCEI, SEED, SHZ, CPGI,...,

The average change from last year April-May high is down -13.40%.

Also please be noted that some stock's poor performance is sector-wide such as shipping, coal, solar, etc. The stocks in those sectors are all facing near term over-supply or low-demand problems. But stocks in many other sectors have mixed performance such as stocks in retailers, biotechnology and technology sectors. Take retailers as an example. While CACH, CHRS, GCO, FL, etc are in year high, OMX, SHLD, CBK, PSUN, NWY, ANF, URBN are in year low.

That is, it is still very important to identify good stocks from bad in order to beat the market. Our new buys are mostly from current Not Hot stocks with improved earnings or with good fundamental and undervalued and believe that many will become this year's star later.