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CFA member. In this blog I put my thoughts. Work in an Italian bank in a strategist position (forex and commodities), but my true passion is the stock market.
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Mirko Toscano - market view and trading signals
  • FRIDAY UP! PERRIGO AS WELL. 2 comments
    Sep 26, 2010 4:20 AM | about stocks: GLD, PLA, BBD, SHOO


    This week was really interesting. After a weak begin of week with bears talking about “the end of bear market rally”, on Friday markets reversed in the uptrend. Previously we had some signals of weakness on some indexes, especially Nasdaq 100 that had 2 consecutive distribution days (have a look in the pic). The S&P500 had just one, while Dow Jones none and looked as the strongest one.

    On Friday we had good economic data both in Europe and in Usa and markets replied with a “run to purchases” with increasing volumes. This Is good. Nasdaq 100 has a target around 2070, the April highs. Dow Jones finds resistance around 11.200, April high too. The S&P500 is the weakest index and closed slightly above the highest level reached early in the week. The April’s high are quite far, around 1220, with an intermediate resistance at 1156 as well.

    By the way, markets acted well this week and volume rose on Friday, therefore the signal is good. BUT must be careful because situation is overbought and I don’t want to see a distribution day this week. Otherwise situation can be dangerous, especially on Nasdaq.

    Euroyen continue to stay above 109,50 and that’s good. Actually is close to resistance at 115 level, above that level we could have another strong rise of stock indexes. In Europe the indexes look weaker than Usa, and actually I don’t like too much the excessive volatility of Stoxx indexes. Usa still looks more attractive from an investment point of view, maybe because market is pricing that Fed QE2 could help the economy. Moreover Usa will benefit of dollar weakness too and Europe will be penalized. This latter point is the weakest point for an European investor like me. I can have good gains on stocks, but dollar is falling fast and eroding stocks profits. An hedge would be advisable until 1.40 at least. The dollar move is quite risky because in the next weeks markets could discount the increase in QE that Fed will place probably in the November meeting after mid-term elections.

    About single stocks, I am satisfied with Perrigo (NASDAQ:PRGO). On Friday it touched new highs with an increase of volumes. From a swing point of view a possible target would be 72-75$. Let’s see if it reaches this level where probably I’ll liquidate.

    Banco Bradesco (NYSE:BBD) was less enthusiastic. Last 4 days showed high volumes, without a sensible increase of the price. This could be a signal of distribution and I consider it like a first sell signal. Is not enough to sell it, but I monitor it accurately and could dump it this week if other signals arise.

    From Playboy (PLA) no news about tender offer.

    These are the 3 stocks in my portfolio.

    I continue to hold Gold (NYSEARCA:GLD) because I have a target of 1300$/onc. reached this week. Unfortunately dollar ate all the gold move… I continue to hold it, but ready to sell in October.

    About other stocks to add in the portfolio I have a wide check-list (35), but some of them made a already “too bid extending move” such as AAPL, AMZN, EBIX, HS. Other are educational schools, bated too much last month and now with all the downside recovered.

    I have four stocks that seems interesting: ALTR, CMG, SHOO and ROST.

    ALTR and CMG gave a buy signal last Friday and could be good for a Monday purchase around closing Friday levels.

    ROST broke a static resistance as well, but is below a dynamic one. Not sure yet about it.

    SHOO is lagging the move and still below my 39.90 entry point.

    Have to decide yet if place a limit order on SHOO or just enter on ALTR. The dollar move is “Braking” me because of summer fiscal modification in Italy I can’t actually hedge dollar position in the forex, so I must buy if signal is quite strong.

    CMG I love this stock, but I missed the first entry point and this last move would be one good to add a position and not to open a new one.

    ALTR gave a buy, but it’s quite volatile and 2 weeks ago we had distribution signals. It means that if market reverse the good Friday signal, it will drop heavily.

    Have to think, will write over the week if I add a new position but I think I’ll place an order on SHOO and maybe a little one on CMG even if I liked buy this at lower levels.

    In 2 weeks a new wave of earning season will come and the list could be modified. New names will come and some old will go. It will be interesting to find new names that maybe are not overextended yet.

    Disclosure: long BBD,long PLA, long PRGO, long GLD
    Stocks: GLD, PLA, BBD, SHOO
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  • mirkotoscano
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    Comments (104) | Send Message
    Author’s reply » Buy signal on SHOO
    29 Sep 2010, 05:49 AM Reply Like
  • mirkotoscano
    , contributor
    Comments (104) | Send Message
    Author’s reply » sold BBD close to old recod at 20,67. Bought cents above 19
    1 Oct 2010, 09:59 AM Reply Like
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