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Showing posts from March, 2009

Turnaround in the the DRAM sector? What might that imply?

As I often do, I was looking through the Digitimes web site to see what was going on in the semiconductor industry. To my surprise, there were a number of articles that imply the DRAM sector is in the process of turning around.

Let's just list the headlines as quoted from Digitimes:
Rising chip prices may undermine Taiwan Memory - Taiwan downstream DRAM makers are saying that the leading DRAM vendors, Samsung Electronics, Hynix Semiconductor, Micron Technology and Elpida Memory, are no longer tolerating low chip quotes, and will aim to push chip prices upward soon... Data compiled by DRAMeXchange showed that sport prices for mainstream 1Gb DDR2 chips soared 4% to US$0.88 on March 24 and then hiked over 13% to US$1 on March 26... industry sources have commented that the higher DRAM chip prices are, the lower the chances that the Taiwan government will go ahead with its proposal to establish Taiwan Memory Company.DRAM suppliers may increase quotes due to rising demand, sources say - S…

Weekly Review - rally looking extended, time for a pause?

Major averages added over 6% this week despite the fact that there were only a couple of days when stock prices actually rose. Still, that was all markets needed to show yet another big weekly gain as this rally continues to drive stock prices steeply higher.

The biggest catalyst occurred on Monday when the Treasury provided details on the plan to remove toxic assets from bank balance sheets. Investors loved it, stocks rocketed upward and that positive sentiment helped carry stocks most of the week.

In terms of economic reports, investors accepted the 6.3% decline in GDP as better than expected and the usual 650,000 jobless claims as "in line". There was debate over whether housing is improving as seasonal factors and plunging prices are beginning to generate a few purchases here and there. Specifically, existing home sales in February rose 5.1% month-over-month and February new home sales increased 4.7% month-over-month. As many commentators, including Barry Ritholtz, often p…

New Swing Trading Signals for March 27, 2009

Last week we introduced our first list of TradeRadar Swing Trading Signals and this week we've done some work to refine how those signals are generated.

Our TradeRadar Swing Signals are based on Bollinger Band breakouts combined with a reversal. Here is our updated methodology:
For a SELL signal we now look for price to climb 2% above the upper band, then fall below the upper band within a time frame comprising 10 days. We look for the price to fall into a range between 0.25 Standard Deviation and 1.5 Standard Deviations below the upper band but still above the 20-day moving average before designating it a SELL signal. (Remember that Bollinger Bands are typically defined as the levels two standard deviations above and below the 20-day moving average.)For a BUY signal we look for the opposite setup: price falls 2% below the lower band and recovers upward into a range 0.25 Standard Deviation and 1.5 Standard Deviations above the lower band.

This week's results --

This week we have a…

Free stock alerts, Trend Leaders, Bollinger Band Breakouts and Cash Flow Kings for March 27, 2009

This post is to announce that the latest list of free stock alerts is up and available at Alert HQ. Each week we scan about 7400 stocks and ETFs looking for fresh BUY and SELL signals. We apply a combination of proprietary and standard technical analysis techniques to identify those stocks that are beginning to move. Our goal is to identify stocks or ETFs that are undergoing reversals, either to the upside or to the downside.

In addition to alerts, we also have our lists of Trend Leaders, a collection of stocks in strong up-trends, Cash Flow Kings whose free cash flow yield is 25% or greater and Bollinger Band Breakouts, stocks or ETFs that have moved at least 3% above their upper Bollinger Band or at least 3% below their lower Bollinger Band. These lists are all available at Alert HQ.

Note that our navigation has changed, so if you have the old pages bookmarked, you will need to update them. Many of the new pages now present the data in tabular form so you can browse the lists before …

Durable Goods - tech sector still under pressure?

The Advanced Durable Goods report for February 2009 was released today. The headline number was positive and the market took off though gains were moderated by the close.

The headline number for New Orders registered a gain of 3.4% where most analysts expected another decline. Much was made of the improvement but things were not all that great when digging into some individual sectors.

As we always do, we will focus on tech and once again the news is dismal. The following chart shows the Shipments data for the entire tech sector as represented by the Computers and electronic equipment category. January data was revised downward and the February shipments number showed another decline though of only 2%.


This next chart looks a little deeper into this category at the Semiconductor sub-category. Chip ETFs were screaming higher earlier in the day then someone must have realized the data in the Durable Goods report didn't actually support a rally in chip stocks. January shipments were rev…

Are tech stocks expensive?

This weekend we ran the Alert HQ process and generated the list of Trend Leaders. These stocks and ETFs are distinguished by strong recent performance. Using daily data, we look for stocks that are over their 50-day moving average. We then use three different technical indicators to determine trend: Aroon, DMI and MACD. All three indicators must be registering strong readings in order for a stock or ETF to make the list of Trend Leaders.

Below we present those stocks from the Tech sector that made this week's list. Data is as of the close on Friday, 3/20/09.

SymbolNameLast PriceMarket CapPE RatioPrice to SalesPrice to BookPEG RatioBMCBMC SOFTWARE, INC.30.78$5,683,000,000 24.193.146.021.18IRMIRON MOUNTAIN INC.21.16$4,274,000,000 53.691.432.431.41KEIKEITHLEY INSTRUMENTS3.19$49,800,000 N/A0.320.66N/ANZNETEZZA CORPORATION6.55$390,900,000 13.432.142.281.53PERPEROT SYSTEMS CORPORATION12.68$1,515,000,000 13.340.551.170.89RAXRACKSPACE HOSTING, INC.6.25$734,800,000 36.491.522.982.02SYSYBA…

Introducing TradeRadar Swing Signals - signs the market is due for a fall?

This weekend I've added another function to the Alert HQ process. We can now provide free swing trading signals based on use of Bollinger Bands.

Previously, we began offering lists of stocks and ETFs that had broken through their Bollinger Bands, either above the upper band (bullish signal) or below the lower band (bearish signal). We call these our Bollinger Band Breakouts. We've taken these breakouts a step further.

Swing Trading Signals --

Our TradeRadar Swing Signals are based on the same kind of breakout combined with a reversal. For a SELL signal, for example, we look for price to climb above the upper band, then fall below the upper band within a time frame comprising 10 days. We look for the price to fall into a range between 2% and 5% below the upper band but still above the 20-day moving average before designating it a SELL signal.

For a BUY signal we look for the opposite setup: price falls below the lower band and recovers upward into a range 2% to 5% above the lower b…

Free stock alerts, Trend Leaders, Bollinger Band Breakouts and Cash Flow Kings for March 20, 2009

This post is to announce that the latest list of free stock alerts is up and available at Alert HQ. Each week we scan about 7400 stocks and ETFs looking for fresh BUY and SELL signals. We apply a combination of proprietary and standard technical analysis techniques to identify those stocks that are beginning to move. Our goal is to identify stocks or ETFs that are undergoing reversals, either to the upside or to the downside.

In addition to alerts, we also have our lists of Trend Leaders, a collection of stocks in strong up-trends, Cash Flow Kings whose free cash flow yield is 25% or greater and Bollinger Band Breakouts, stocks or ETFs that have moved at least 1% above their upper Bollinger Band or at least 1% below their lower Bollinger Band. These lists are all available on the Trend Leaders page.

Here is what we have this week --

After big gains a week ago, stocks eased off this week but still managed to show a modest increase over the previous week's prices. Despite the two down…

Semiconductor Equipment Manufacturers - what does this month's Book-to-Bill signify?

The SEMI trade group released the February 2009 Book-to-Bill Report for North America-based manufacturers of semiconductor equipment. Rather than list the numbers in detail, we'll just present the charts below (values in millions of dollars, February numbers are preliminary).

Before digging into the numbers, I expected to write another post on how the semiconductor equipment sector was crashing even further. But maybe we can say there's light at the end of the tunnel.

This first chart shows that billings in dollar terms are decreasing and, of course, that is bad. Bookings, however, now seem to be decreasing at a much slower rate; they are down only 5% month-over-month. This might not sound that great but from November to December 2008 bookings dropped 26% and from December 2008 to January 2009, they dropped over 52% so this is very welcome reduction in the rate of decline.

Bookings comprise the forward-looking aspect for the industry, similar to new orders. The indication now, af…

Fed goes for "shock and awe"

The FOMC met this week and released their statement today. As expected, they held rates steady between 0 and 1/4 percent. The interesting and unexpected part of the statement is as follows:
"To provide greater support to mortgage lending and housing markets, the Committee decided today to increase the size of the Federal Reserve’s balance sheet further by purchasing up to an additional $750 billion of agency mortgage-backed securities, bringing its total purchases of these securities to up to $1.25 trillion this year, and to increase its purchases of agency debt this year by up to $100 billion to a total of up to $200 billion. Moreover, to help improve conditions in private credit markets, the Committee decided to purchase up to $300 billion of longer-term Treasury securities over the next six months."The Fed has alluded to buying Treasuries in the past but this is the first time they have come out and said it was something that was definitely going to happen. The market was…

Industrial Production - when "less bad" is good enough

On Monday the Fed released the Industrial Production and Capacity Utilization report for February. The headline number, a decline of only 1.4%, was not bad enough to cause stocks to give up the prior week's gains. Indeed, stocks rallied strongly today, led by the NASDAQ with over a 4% gain.

Is the gain in the NASDAQ justified?

The following chart tracks the month-over-month percent changes in production in the three tech sectors tracked by the Fed. The numbers are seasonally adjusted.


There is a real combination of good news and bad news here.

First the good news:
Production in the Computers and peripheral equipment sector, though still declining, is not declining as fast as it did last year.Semiconductor production, while still showing negative growth, has at least bounced strongly from last November's deep low.Now the bad news:
Communication equipment, which had shown positive growth in production has joined the other sectors and has now begun to show a decline.Production for both…

Do Charge-off Rates impact the UltraShort Real Estate ETF?

You may have noticed today that the ProShares UltraShort Real Estate ETF (SRS) was up strongly Monday (3/16/09), tacking on almost 16%. This is far in excess of the 4% that the UltraShort Financial ETF (SKF) rose.

What gives?

It could be that investors are beginning to realize that the situation in commercial real estate is becoming worse than what we have seen in residential real estate. The Fed provides the data from which we constructed the following chart. It contrasts the charge-off rates for residential real estate loans and commercial real estate loans.


Whereas it looks like charge-offs in the residential sector are beginning to moderate, it appears that charge-offs in the commercial sector are really taking off, increasing rapidly and surpassing the rate for residential loans. As of the end of the 2008-Q4 there was no moderation at all in the slope of commercial loan charge-offs.

Many financial institutions have seen their stock prices decimated when mortgage-backed securities (…

Weekly Review - can bulls make it two weeks in a row?

I said in last week's review that our charts looked like things could hardly get any worse. Indeed, Monday provided a bottom and was followed by an explosive rally. Our charts are now looking a little better.

Major averages gained roughly 10% and the former laggard, the Russell 2000, became the leader with a 12% gain. The Financial sector tacked on 34% this week, mostly based on the fact that Citi, Bank of America and JPMorgan Chase all declared they were profitable in the first two months of the year though no details were provided (like what further write-downs might be in store). It was still welcome news and better than we are used to receiving from many banks, and so stocks were off and running. As the debate over mark-to-market accounting picked up volume in Washington and in the financial press, investors took heart that the rules might be eased, further supporting the skyrocketing financials.

It is clear that sentiment has turned 180 degrees and bad news is once again good n…

Free stock alerts, Trend Leaders, Bollinger Band Breakouts and Cash Flow Kings for March 13, 2009

This post is to announce that the latest list of free stock alerts is up and available at Alert HQ. Each week we scan about 7400 stocks and ETFs looking for fresh BUY and SELL signals. We apply a combination of proprietary and standard technical analysis techniques to identify those stocks that are beginning to move. Our goal is to identify stocks or ETFs that are undergoing reversals, either to the upside or to the downside.

In addition to alerts, we also have our lists of Trend Leaders, a collection of stocks in strong up-trends, Cash Flow Kings whose free cash flow yield is 25% or greater and Bollinger Band Breakouts, stocks or ETFs that have moved at least 1% above their upper Bollinger Band or at least 1% below their lower Bollinger Band. These lists are all available on the Trend Leaders page.

Here is what we have this week --

Stocks staged quite a turnaround this week, prompting a resumption of the debate over whether this is "A Bottom" or "THE Bottom". Whate…

Announcing release of TradeRadar software version 4.0

This post is to announce the release of the newest version of the TradeRadar software. Version 4.0 is now available on the TradeRadar Download page in two flavors: a full install and a simple upgrade. We feel this version has some really serious improvements that should make the software more helpful and easier to use.
New Features in version 4.0 --The major new features in this version include the addition of new indicators on the Dashboard screen, Fibonacci retracement lines on the Chart screen and use of intra-day data. You can check out screen shots and read the help file on our Features page.

New indicators:
MACD – technical analysis indicator that shows whether a stock or ETF is trending up or down.50-period moving average confirmation – For a BUY signal, this indicator shows whether the closing price is more than 1% above the 50-period exponential moving average. For a SELL signal, it shows whether the closing price is more than 1% below the 50-period exponential moving average.A …

Starent Networks - in the sweet spot

This past weekend we ran our Alert HQ process and once again found a slew of inverse ETFs on the Trend Leaders list (hopefully that may change by this coming weekend). One of the few tech stocks on the list is Starent Networks (STAR). Not being familiar with the company I wondered why it's doing so well while so many other companies are sinking.

Background --

Starent Networks was founded in August of 2000, with the intent of providing mobile operators with the systems required to deliver a multimedia communications environment to their subscribers. The company supplies high-performance solutions that act as the subscriber-management gateway between radio networks and the IP network, such as the Internet. The solutions are access independent allowing them to serve a wide variety of mobile broadband radio technologies, such as, UMTS/HSPA, CDMA2000, WiFi, WiMAX and Femto networks. Over the past 8 years, the company has deployed its solutions in over 85 mobile operator networks in mor…

Is Qualcomm going up against Intel?

It's been months and months since I last wrote about Qualcomm (QCOM). The company has had a resurgence of sorts. The stock is actually showing a gain so far in 2009. They just increased their dividend at a time when so many other companies are slashing theirs.

So the question is, can they keep it up?

The company provided guidance during their last earnings conference call that indicated shipments would be down but not drastically, as sales of cell phones were expected to be weaker on a year-over-year basis. Still, the company expects to be a prime beneficiary of the roll-out of 3G in China. And they are feeling optimistic after resolving their legal problems with Nokia (NOK) and booking $2.5B to renew the license agreement.

Qualcomm may be acting a bit over-confident but, on the whole, there is little doubt that they will be one of the companies that will come out of this recession as a survivor.

What is interesting, however, is where the company's strategy seems to taking it. I&#…

Weekly Review - a very consistent market: all bad news and falling stock prices

Alright, let's just get the bad news out of the way.

The week started with a thud as AIG reported the biggest quarterly loss ever, over $60B. Not to be outdone, HSBC reported a big drop in profits and announced it is shrinking its U.S. operations, adding another 6100 people to the unemployment rolls. Then U.S. Bancorp and Wells Fargo announced big divident cuts. You get the idea: financials under pressure yet again. The one day when the market did rally this week, the financial sector still lost ground.

Economic reports provided no relief. February job losses came in at 650,000 which was inline. It is a sad comment that an atrocious number like that is considered less than shocking. To add insult to injury, the unemployment rate jumped from 7.6% to 8.1%. This was definitely worse than expectations. The Fed Beige Book painted a consistent picture of economic weakness. January pending home sales dropped 7.7%, which was twice as bad as the expected decline of 3.5%. In the meantime, mor…

Free stock alerts, Trend Leaders, Bollinger Band Breakouts and Cash Flow Kings for March 6, 2009

This post is to announce that the latest list of free stock alerts is up and available at Alert HQ. Each week we scan about 7400 stocks and ETFs looking for fresh BUY and SELL signals. We apply a combination of proprietary and standard technical analysis techniques to identify those stocks that are beginning to move. Our goal is to identify stocks or ETFs that are undergoing reversals, either to the upside or to the downside.

More than just alerts...

We also use the Alert HQ process to generate more free lists of stocks and ETFs

The first byproduct of the Alert HQ process is the Trend Leaders list, our collection of stocks in strong up-trends. These stocks are registering strong signals using Aroon analysis, DMI and MACD. They are also at least 1% above their 50-day exponential moving average. This week's list is now available at the TradeRadar site on the Trend Leaders page.

To generate our list of Cash Flow Kings we calculate the free cash flow yield of all the stocks we scan and p…

ProShares ETF links - the big list for Mar 5, 2009

It has been over two months since the last time we presented a links post focused on ProShares ETFs. With markets plunging, the inverse ETFs are certainly prompting a lot of discussion, both pro and con.

As usual, today's list is comprised mostly of posts from Seeking Alpha but we also have some from the Wall Street Journal, Forbes, MarketWatch, TradingMarkets.com, and CNBC. As always, I recommend that you click through to the authors own sites after reading the posts on the Seeking Alpha site.

Thu,
Mar 5TBT
Street Skids; Jobs Report LoomsThu,
Mar 5SKF
AT&T, ProShares UltraShort Financials: Money Flow Leaders (T, SKF)Thu,
Mar 5YCL
YCS
Japanese Scandals Inadvertently Intervene to Soften YenThu,
Mar 5SKF
Citigroup Breaks $1: 'We Need a Bolder Plan' to Fix Banks, Sonders SaysThu,
Mar 5SIJ
SKF
TradingMarkets 7 ETFs You Need to Know for FridayThu,
Mar 5SKF
Leveraged inverse ETFs for financials gorge on sell-offThu,
Mar 5SKF
Options Trader: Outlook for a Thrill-Ride ThursdayThu,
Mar 5SCO
Crack…

Who else benefits from Intel - TSMC partnership?

Intel (INTC) and Taiwan Semiconductor (TSM) announced an agreement this week where TSMC would gain the rights to use Intel Atom processors as part of custom "system-on-a-chip" devices. These devices would be customized by TSMC according to individual customers requirements. The expectation is that the chips would be used in everything from netbooks to handheld gadgets. This is a good deal for both companies. TSMC has a new solution to offer its customers and Intel will more easily be able to get its processors in new devices such as smartphones.

This seems to be an extension of Intel's strategy of moving into new markets. The company has been trying to push into "mobile Internet devices" or MIDs. These MIDs are intended to be based on the Atom chip and Intel is working on a smaller, lower-powered version tailored to use in cellphones, smartphones, automotive systems and other yet to be determined devices.

Intel's work is cut out for it. ARM processors, made b…

Picture of the bear

Every week we scan and test all the stocks on the major exchanges as part of our Alert HQ process. A byproduct of the Alert HQ process is the Trend Leaders list, our collection of stocks in strong up-trends. These stocks are registering strong signals using Aroon analysis, DMI and MACD. They are also at least 1% above their 50-day exponential moving average. This week's list is now available at the TradeRadar site on the Trend Leaders page.

TrendLeaders paint depressing picture of a bear market --

This week we have 61 stocks and ETFs on the list. The total number has been declining steadily over the last few weeks. The nature of the securities comprising this week's list show how badly stocks in general are performing - more than half of our Trend Leaders are inverse ETFs.

Not only do we have a bunch of the usual ProShares ETFs on the list but we see that the Direxion Bear 3X ETFs are well represented as are a number of Rydex Inverse 2X ETFs.

Here is the list of inverse ETFs. Pric…