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Thomas Carnevale
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  • Weekly Market Forecast and Stock Picks 0 comments
    Dec 18, 2009 8:48 PM | about stocks: VDC, VLO, TAP, JCG, WAB, BAC, GS, JPM

    Over the last week we have seen a dominance of the bears over the bulls. The dow dropped over 172 points, and was unable to hold its gains on Friday despite an outstanding earnings report from RIMM.
    This week has validated my hypothesis (in my mind) that this market is due for a correction soon. I am moving into more conservative sectors in the coming weeks as I expect turbulence in the markets because of news regarding Ben Bernanke, news regarding the US government stake in Citigroup and a lack of leadership in this market.
    Part of the reason why the dow retreated this week is the lack of leadership from the financials. Even with a rally in the KBW bank index on Friday, the index was down 2% for the week, while the S&P 500 was down 1%. On the other hand last week when the KBW index was roughly flat, the s&p pulled a .25% gain. Here are my picks for this week:

    -VDC- I picked the Vanguard consumer staples ETF because currently it is trading at a significant discount to its NAV and I believe it will not be hurt that bad to the pullback in the market thats underway.
    -VLO- huge technical play, plus they already had investments in the natural gas industry that XOM just bought its way into. I would hold VLO until it comes back to its 50 day MA at 17.50.
    -TAP- I picked it up as a pure technical play as I think the stock has 5-8% of growth in it up to its 50 day MA.
    -JCG- recommended it last week, this stock has been on a big run and today had a significant pullback which I see as a big buying opportunity for more stock. Don't let this pullback scare you, JCG has done this before and it always recovered (like Sep. 30th-Oct. 2nd, Oct. 23rd-28th and Nov. 16th-23rd).

    -WAB, this stock has been down slightly since I reccomended it on Novermber 8th and I believe the good news on friday that boosted this stock 2% reason to hold on for the long term. The railroad suppliers such as WAB are also going to benefit from additional government stimilus that is bound to come from the leftover TARP money.
    -BAC, GS, JPM- I reccomended these last week because I believed that the prices where too good to tun down, however now I see a bigger pullback then expected in financial stocks, espescially BAC with its woes over picking the "backup" candidate for CEO. I think these stocks will fall 5-8%, then I'll pick it up again.

    Have a good week! Good Luck and have a merry christmas! 

    (To see my stock picks prior to this week, please check out my old blog at I've swiched my blog over to seeking alpha to gain more visibility and a better blogging platform. Thanks!)

    Stocks: VDC, VLO, TAP, JCG, WAB, BAC, GS, JPM
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