Steckler's Star Studded Stock Picks

[DSteckler]

Homebuilders Heading Higher

A headline worthy of the NY Post....<BG>

The housing index (HGX.X) cleared the 20-day EMA yesterday and is following through today. The three highest ERG buliders are BZH, BHS and DHI.

[DSteckler]

LPSN major breakout

Up almost 10% on very heavy volume.

Take a look at the weekly chart and you see a saucer and handle with the pivot at 6.33.

[investorone]

Your opinion

Dave et al---What is your opinion on ARCAF? The graph looks great-one bad thing is they increased their long term debt over the last period. Thanks for your thoughts everyone!

[Lyehopper]

Up almost 10% on very heavy volume.

Take a look at the weekly chart and you see a saucer and handle with the pivot at 6.33.

Yep.... 2 year weekly. Nice one

ESLR is a fine short right now.... ENER too.

Do you ever short sell Dave?

[DSteckler]

<< Do you ever short sell Dave? >>

Not usually.

[DSteckler]

Bow tie candidates for next week

ARL
ATPG
BRKR
BYD
CVGI
FRC
HLF
INTL
MTLK
RNWK
RSTO
UPCS
VCI


1. The MAs shift from proper downtrend order (10-SMA < 20-EMA < 30-EMA) to proper uptrend order (10-SMA > 20-EMA > 30-EMA). What you're looking for is for the MAs to converge and then spread out again, giving the appearance of a bow tie.

2. Today's low must be less than yesterday's low.

3. Tomorrow, place a buy order 1 - 2 ticks above today's high good for tomorrow.

4. If not filled, continue to work the order above the prior day's high good for the next trading day until either filled or the stock trades below its 20-day EMA.

5. If filled, place a protective stop below the lowest bar in the setup.

[DSteckler]

From Greenspan's speech in Puerto Rico on 3/18

Effects of global forces on the energy system.

There are serious energy issues in the world. Serious supply and demand issues in oil and natural gas that need to be addressed. We’re not fully aware of how impacted our way of life is tied to oil.

We’re at the highest production levels in history but oil is a depletable resource. We’ll eventually run into a production problem in meeting demand.

The world GDP is shifting towards developing nations, e.g., China. Even though the ratio of hydrocarbon use to GDP is going down, the weight of the physical GDP is rising. Developed nations are moving more towards service economies, reducing the oil/GDP ratio in those countries.

As you move world GDP towards higher use countries, world use rises. Aggregate oil use therefore is rising.

Over the last ten years, oil reserves have increased to match consumption. This is due to improvements in technology that improve oil recovery from existing fields, from 30% twenty years ago to 50% today. At some point, however, that will flatten out.

The problem is that the ability to produce oil from what is in the ground is falling. Reserves are climbing 4% per year but the capacity to bring up new oil is going up 2% per year. Increased capacity in refineries is only rising 1.5% per year. This requires large capital investments to improve existing refineries.

Most of the reserves are in OPEC. They have no incentive to expand growth, with the exception of Saudi Arabian oil companies. Thus, the ability to build world reserves is constrained.

The issue of increasing production and capacity was not an issue between 1991 and 2000 because demand was moderate. Long-term futures on the NY Merc is six years, because that’s how long it took for non-OPEC oil sources to develop. As consumption outpaced capacity, reserves were used up. Reserves decreased from 10 million barrels/day in 1985 to 1 million barrels today.

Increased demand for oil comes not only from industry but hedge funds, which bought large amounts of forward contracts. Long-term futures contracts have thus risen from their long-time rage of $18 - $20/barel to $60/barrel. Very significant quantities of capital is going toward energy-efficient technologies. Unless we begin to get a significant increase in crude capacity, we’re going to have a problem.

The demand is for lighter oils for transportation. This requires refineries with significant cracking capabilities. But most refineries are built for sour crude. We are close to the point where we have enough crude in the ground, but insufficient refining capacity.

There is an extraordinary event in oil; the spot price is below the long-term futures price. There is a large build-up in inventories. Prices in futures are being held up largely by terrorism fears or instability in parts of the world. This creates a premium in oil prices. When these fears ebb, prices will drop. Longer-term futures prices are pulling up spot prices.

Up front capital expenditures are very high for alternative energy sources, e.g., oil sands.

The 1987 stock market crash and the fact that the world economy didn’t buckle was the first hint of a global economy. This economy is much more flexible than we realize. The most important policy political leaders need to focus on is how to make the economy more flexible, so it can absorb shocks.


Questions and Answers

He is not happy with the current way in which government is being run, either by the executive or legislative braches.

There is a difficult economic problem in that a large number of skilled labor is leaving the workforce, and they will live longer than past generations. The replacement workforce is much smaller. This smaller group will need to produce more to support the retiring baby boomers. The available resources (e.g., Medicare) to retirees needs to shrink. There is also a strong probability that the baby boomers have been promised more than the country can deliver in the way of entitlements.

The Fed dropped reporting M3 because it is very costly to make the calculation.

[Runner]

Dave, have you looked into PBW? Not a bad basket of 39 stocks. Clean energy might not be a bad play going forward IMO…

[IIC]

Up almost 10% on very heavy volume.

Take a look at the weekly chart and you see a saucer and handle with the pivot at 6.33.

Dave...have you been following the IIC Top 10 Under $10 again???

Last week's list 10 up 0 dn

RWC,HOM,GIGM,LPSN,CYB,ININ,EXFO,SWB,TGE,GEMS

http://trimurl.com/4RW

This week's list:

HOM,RWC,GIGM,LPSN,CYB,ININ,EXFO,SWB,GEMS,CYBS

http://trimurl.com/4RX

[DSteckler]

Dave, have you looked into PBW? Not a bad basket of 39 stocks. Clean energy might not be a bad play going forward IMO…

No, I haven't. I'll take a look at it.

Thanks.

[DSteckler]

Dave et al---What is your opinion on ARCAF? The graph looks great-one bad thing is they increased their long term debt over the last period. Thanks for your thoughts everyone!

It's pretty extended here and the volume the past few days has been below average. If you don't already own it, I'd wait for a pullback to the 20-day EMA - this EMA has held like iron every time it's tested. Average volume is also extremely light, which makes buying or selling almost any size position a dicey proposition.

[DSteckler]

Cooper 1-2-3-4 candidates for the week

KOMG
PLNR - has already made a heck of a run YTD.

Cooper candidate are stocks that have a high RS rank (95 or greater) and make a three-day pullback, either three consecutive lower lows or a combination of lower lows and inside days. Enter long on Day 4, 1 - 2 ticks above the Day-3 high.

The trade can be worked one additional day (lower low or inside day on Day 4, enter long on Day 5 one - two ticks above the Day-4 high). If it doesn't pop on Day 5, abandon the trade.

[DSteckler]

Biopharms

DRXX breaking out. CRXX gapped open higher after making a double bottom but it's pulled back after hitting the 20-day EMA.

[DSteckler]

KOMG
PLNR - has already made a heck of a run YTD.

Cooper candidate are stocks that have a high RS rank (95 or greater) and make a three-day pullback, either three consecutive lower lows or a combination of lower lows and inside days. Enter long on Day 4, 1 - 2 ticks above the Day-3 high.

The trade can be worked one additional day (lower low or inside day on Day 4, enter long on Day 5 one - two ticks above the Day-4 high). If it doesn't pop on Day 5, abandon the trade.

Fell below the low of the setup so I'm out for a 1/2 point loss.

[DSteckler]

PTR closing in

PTR is getting closer to the resistance line of a rising right triangle. Yesterday's action was a bearish engulfing bar on very heavy volume, however.