Here's a sample of our partner Sabrient's newsletter, the Sabrient Select Opportunity Portfolio. It's a "high-performance actionable portfolio" and Sabrient provides weekly updates and trading alerts for subscribers. This is this week's update. To learn more about Sabrient, click here.
Performance Year-to-Date (as of 4/16/10): +12.0%
Average Gain Per Trade: +2.75%
The Week Ahead
The market continues to search for direction while testing both support and resistance levels. After recapturing its 200-day moving average and looking strong, the SPY instead lost it again to resume its bearish trend. Notice that the 50 and 200 are rapidly converging. The 50 crossing down through the 200 would be quite bearish.
On the other hand, the IWM (Russell 2000 ETF) has held up much better. On Friday, in fact, the RUT was up +1.9% while the SPX was up only +0.3%. The IWM found support at its 200-day moving average after nearly rising above its 50-day. So, small caps are holding up, and that is a promising sign.
We are short 2/3 of the original position in homebuilder Toll Brothers ( TOL) from $20.24. The stock closed Friday at $17.20, for a 15% gain. TOL is rated SELL by Sabrient and has a Company Outlook Score of 4. The homebuilders and related construction materials firms continue to look weak. I have a mental profit-protection stop at $19.20.
We are short building products firm USG Corp (NYSE:USG) from $16.30. The stock closed Friday at $14.07, for a 14% gain. USG is rated STRONG SELL by the Sabrient Ratings Algorithm and has a Company Outlook Score of 0. I have a mental stop of a closing price above last Tuesday’s high at $15.20.
We are short Host Hotels & Resorts (NYSE:HST) from $14.80. The stock closed Friday at $14.42. HST is rated SELL by the Sabrient Ratings Algorithm and carries a Company Outlook Score of 3. I have a mental stop of a closing price above last Tuesday’s high of $15.91.