Sunday, December 30, 2007

AAPL not yet ripe for bargain buyers

More than a few folks plan to sell their RIMM shares on the next pop and then buy AAPL going into earnings. I'm long in each so it's no big deal to me. But I definitely plan to add more AAPL on pullbacks. Now, however, is not the time. AAPL could keep running far above its moving averages until earnings, but there will be a pullback sooner or later, and the one-year chart shows that the decline is always worth waiting for. You can usually get AAPL cheap, after the pullback, without losing out on previous gains. The only exception was when AAPL went from 100 to 120 and beyond, never to revisit 100.


















It's just too late to get in now. Best to wait for the pullback rather than chase at these levels. No matter how much you and I may love Apple, it's all about price if you're a smart investor and/or trader.

Top 25: Ins and Outs

Tomorrow's market will likely be light, shallow, not much different from last week. Still, here's a look at my 25 favorite stocks and their prices. Any price is worth looking at. Few prices are worth paying for.

based on closing prices, Dec. 28, 2007
1. AAPL 199 • 50-day SMA: 182 • Wait
2. GOOG 702 • 50-day SMA: 682 • Wait
3. RIMM 116 • 50-day SMA: 113 • Wait
4. ISRG 325 • 50-day SMA: 310 • Wait
5. NTDOY.PK 73.75 • 50-day SMA: 73.05 • Wait
6. POT 144 • 50-day SMA: 120 • Wait
7. CHL 86 • 50-day SMA: 90 • 100-day SMA: 80 • Good price, could get betterchart
8. PTR 175 • 50-day SMA: 205 • 100-day SMA: 183 • 200-day SMA: 156 • Very good pricechart
9. FSLR 266 • 50-day SMA: 205 • Wait
10. MCD 59.50 • 50-day SMA: 58.37 • Wait

11. STP 81 • 50-day SMA: 68 • Wait
12. CMG 151 • 50-day SMA: 134 • Wait
13. BIDU 398 • 50-day SMA: 363 • Wait
14. FWLT 156 • 50-day SMA: 149 • Wait
15. FLS 98 • 50-day SMA: 90 • Wait
16. FMCN 56.84 • 50-day SMA: 56.98 • 100-day SMA: 52 • Fair price, could get betterchart
17. GS 211 • 50-day SMA: 220 • 100-day SMA: 208 • Good price, could get betterchart
18. NKE 64.31 • 50-day SMA: 64.08 • Wait
19. CEO 165 • 50-day SMA: 177 • 100-day SMA: 157 • Good price, could get betterchart
20. VMW 83 • 50-day SMA: 95 • Good price, could get betterchart

21. LULU 47 • 50-day SMA: 44 • Wait
22. MSFT 36 • 50-day SMA: 34 • Wait
23. AMZN 94 • 50-day SMA: 87 • Wait
24. EBAY 33.78 • 50-day SMA: 33.85 • 100-day SMA: 35.34 • Fair price, could get betterchart
25. LFC 77 • 50-day SMA: 86 • 100-day SMA: 81 • 200-day SMA: 65 • Good price, could get betterchart

Wednesday, December 26, 2007

Pupule Portfolio

With all the market's fluctuations and my little lists of A+ and Top 25 stocks, I'm creating a running faux portfolio for display purposes only. Based on strong fundamentals, accelerating earnings and healthy entry points (referred by simple moving averages), the Pupule Portfolio opens with four Top 25 stocks that traded below 50-day simple moving averages at Monday's close. I'll use weighted scales for each stock ($10,000 each).

PTR • in $181.72 (55.0297 shares) • 12/24/07
GS • in $214.32 (46.6592 shares) • 12/24/07
CEO • in $167.22 (59.8014 shares) • 12/24/07
LFC • in $80.70 (123.9157 shares) • 12/24/07

Top 25: Ins and Outs

Dec. 25, 2007

1. AAPL 198 • 50-day SMA: 180 • Wait
2. GOOG 700 • 50-day SMA: 677 • Wait
3. RIMM 117 • 50-day SMA: 112 • Wait
4. ISRG 333 • 50-day SMA: 305 • Wait
5. NTDOY.PK 73 • 50-day SMA: 73 • 100-day SMA: 66 • Fair price
6. POT 139 • 50-day SMA: 118 • Wait
7. CHL 91 • 50-day SMA: 90 • 100-day SMA: 79 • Wait
8. PTR 181 • 50-day SMA: 209 • 100-day SMA: 181 • 200-day SMA: 155 • Good price
9. FSLR 272 • 50-day SMA: 197 • Wait
10. MCD 60 • 50-day SMA: 58 • Wait

11. STP 87 • 50-day SMA: 66 • Wait
12. CMG 248 • 50-day SMA: 132 • Wait
13. BIDU 380 • 50-day SMA: 358 • Wait
14. FWLT 164 • 50-day SMA: 148 • Wait
15. FLS 99 • 50-day SMA: 89 • Wait
16. FMCN 58 • 50-day SMA: 57 • 100-day SMA: 49 • Wait
17. GS 214 • 50-day SMA: 220 • 100-day SMA: 207 • Good price
18. NKE 66 • 50-day SMA: 63 • Wait
19. CEO 167 • 50-day SMA: 179 • 100-day SMA: 156 • Good price
20. VMW 88 • 50-day SMA: 95 • Good price

21. LULU 49 • 50-day SMA 44 • Wait
22. MSFT 36 • 50-day SMA: 33 • Wait
23. AMZN 91 • 50-day SMA: 87 • Wait
24. EBAY 34 • 50-day SMA: 34 • 100-day SM: 35 • Fair price
25. LFC 80 • 50-day SMA: 87 • 100-day SMA: 80 • Good price

Tuesday, December 25, 2007

No. 25 China Life Insurance: Family matters

Rapidly growing middle class. Life insurance matters. China is a land where ancestor worship once was the rule. Life insurance matters.


















LFC has exploded. Can't say I'm surprised. The pullback gives everyone an opportunity to get shares below the 50- and 100-day SMA. Hmmm...

Pupule's Top 25 (Dec. 25)

No. 24 eBay: No denying potential

I liked using eBay. I did. Until someone sold me a piece of crap. Then I couldn't get any help from eBay.



















Still, PayPal is a monster and eBay could do very well with further global expansion, i.e. China. Time will tell.

Pupule's Top 25 (Dec. 25)

No. 23 Amazon: Blazing new trails

I hate the cliche, "Price to perfection," but that's the case with Amazon. It was dead money for a long stretch, then vaulted to new highs two quarters ago with a brilliant earnings report. Another great earnings report followed, but the stock kept running in place.




















I love Amazon's customer service and speed of delivery. Never had a complaint. But until we see what CEO Jeff Bezos can accomplish in China, it appears the Co and the stock are tapped out. And Bezos has said that results in China could take years to materialize.

For now, "Kindle" is going to be godsend to book readers who won't mind reading on a computer screen. But the real X factor will be China.

Pupule's Top 25 (Dec. 25)

No. 22 Microsoft: Is there more than Halo?

Yep, Mister Softee is showing signs of life. But I'll never buy shares. Halo can only help so much. Maybe it's simply the law of large numbers. Maybe, like Disney, a big hit can only help MSFT minimally. But as far as recent performance goes, there's no arguing that the stock has done well.


















Again, not interested in buying shares here. But you never know what may come next, and MSFT certainly has the power to do almost anything.

Pupule's Top 25 (Dec. 25)

No. 21 lululemon: No downward dog here

lululemon athletica ahead of Microsoft? Yes. Really. A strong earnings report and recent upgrades confirmed what I believed about LULU when I bought in the high 30s a few months ago. I saw the stock run to 60, but it fell to 40 amidst the fears about a slowing economy. This Co has a niche to itself, for the most part, and it's a good one: female yoga fanatics. They're a demographic that speaks well to revenues: 18-35 females.


















The seaweed fiasco has been quickly forgotten thanks to robust earnings. The Co will continue to expand across the U.S. Growth is coming and it is real. I haven't taken a step back into LULU since the sell, and the stock is now near 50 again. I'm watching closely.

Pupule's Top 25 (Dec. 25)

No. 20 VMware: Hearing Mr. Softee's footsteps?

So, is VMware truly a dominant market leader in virtualization for years to come? Or will Microsoft catch up sooner than later? I owned a bit of VMW a few months ago, got out with a small profit after seeing it hit an all-time high only to pull back.



















VMW has a lot of momentum, but the battle between bulls and bears is at a standstill now. No point in assuming one extreme position versus another until more information surfaces.

Pupule's Top 25 (Dec. 25)

No. 19 CNOOC: To heaven and hell

PetroChina is the undisputed king of crude oil in China, but CNOOC is its baby brother, the one specializing in off-shore drilling. Both have the backing and protection of the Chinese government. It doesn't get much safer than that. That being said, CNOOC's stock (CEO) has been on a hellacious roller-coaster ride.


















I touted CEO when it was in the 90s, and again in the 110s, with a P/E of just 11. Then it dropped back to the 90s and I missed my chance. I had no idea the price of crude was going to approach 100, no idea that CEO was going for a ride above 210. Holy crap.

CEO is trading below its 50-day SMA, but only those with brass balls will step in here. Can crude make a run at 100? I think so, but without faith to back my belief, I will not act in accordance.

Pupule's Top 25 (Dec. 25)

No. 18 Nike: Just kick ass

Yeah, there's Under Armor (overpriced and unable to crack 70). And there's Crocs, which got raided and plummeted from 75 to 40. lululemon athletica is carving its niche in the apparel sector, as well. At the end of the day, though, Nike rules the world.


















China is a battleground Nike will not lose. Basketball continues to grow in popularity there. I just saw a high school team from China play in a local tournament, and every player wore Nike gear from top to bottom. Nike is what Nike is, and it shows no signs of softening up. Nike kicks ass. That should be its REAL slogan.

Pupule's Top 25 (Dec. 25)

No. 17 Goldman Sachs: Teflon kings of the $treet

Teflon. That's Goldman Sachs. Somehow, someway, the kings of Wall Street stay afloat when all else around them comes crashing down. Can we believe it? Does it matter? GS will continue to reign because, well, that's what they do best.



















I don't like GS above 200. Though it seems the worst of the subprime sludge is behind us, if there's another pullback, GS would be compelling. I remember GS at 160 not so long ago and thinking, heck, that is NOT going to last. Cheap, cheap, cheap.

Pupule's Top 25 (Dec. 25)

No. 16 Focus Media: Out of a mess and focused again

I once loved this stock. Then I hated it. Now, I watch it from afar. When Focus Media had a snafu and asked the SEC for a delay in submitting a quarterly earnings report, I went from bullish to frustrated. I finally sold as the Co stayed mum on all things, leaving shareholders in the dark. I took the loss, cursed FMCN and moved on. Then, the Co announced that the problem, which originated with a short seller, had worked out, the stock began to recover.


















FMCN is still a promising company in the fastest growing nation in the world (if there's another, please tell me). Advertising in China is still somewhat untapped, and FMCN has to move quickly to capitalize.

Pupule's Top 25 (Dec. 25)

No. 15 Flowserve: Gushing with profits

Flowserve is another stock that I studied back in spring. Like Foster Wheeler, I had almost no recognition of what it does, but man, I liked the stock. Even back at 77, when FLS turned out a great earnings report, it sold off and I was stunned. I still didn't buy shares, but eventually, the market caught up and sent FLS on a magic carpet ride.


















FLS is up 33% since that temporary selloff. The opportunity passed. Eyes open for the next one.

Pupule's Top 25 (Dec. 25)

No. 14 Foster Wheeler: Keeps on truckin'

Back in February, Foster Wheeler drew my attention. Having no clue about what the company actually does, I was drawn to its fundamentals and accelerating earnings growth. Then, in the spring, FWLT missed earnings estimates, and I lost interest. Too bad. The fundamentals of the Co were still healthy, and the stock price drop turned out to be a buying opportunity for anyone who really stayed on top of the stock.


















FWLT won't be a buy for some time, but it'll come. When it hits the skids, it goes down fast, in RIMM-like fashion. But Foster Wheeler keeps bouncing back.

Pupule's Top 25 (Dec. 25)

No. 13 Baidu: Running out of steam?

Can Baidu really compete with behemoth Google? Search is a different animal when it comes to Chinese language, but Google will not be stopped. I believe that. You probably do, too. That's why I can't rank Baidu any higher than this.


















I know Baidu and China in general are loathe to allow a foreign, Western entity to enter its kingdom and topple a local hero like Baidu. In that sense, Baidu has the protection of big brother. But in the end, Baidu will still have to produce superior service, Baidu must expand beyond search. Online advertising in China is still untapped. The clock is ticking, and Baidu needs to step up before the bandwagon empties.

Pupule's Top 25 (Dec. 25)

No. 12 Chipotle Mexican Grill: Hot year indeed

I've never eaten in a Chipotle Mexican Grill. There isn't a location here in Hawaii and I rarely travel outside the state. But there's no denying that CMG has found ways to produce major numbers while catering to the health-minded consumer. The stock, meanwhile, is completely off the hook.



















Pupule's Top 25 (Dec. 25)

No. 11 Suntech Power: Hot Run

It was not very long ago when I took a look at Suntech Power, a company that aligned with a Hawaii company, Hoku Scientific. At the time, STP was below 40. Today, STP has more than doubled. Amazing what the solar sector has done in the past four months. Incredible.


















Pete Najarian of Fast Money and OptionMonster.com said last week that he's unloaded his solar stocks. Can't blame him. No matter how promising the industry is, stocks cannot go straight up forever. There will be a pullback, and if STP can return to its 50-day SMA, it'll be worth a close look. Solar energy in China is as bullish as it could be anywhere on the globe.

Pupule's Top 25 (Dec. 25)

No. 10 McDonald's: Arches aren't the only gold

Quite amazing, what Mickey D's has done in the past year with its coffee/latte campaign. I don't drink coffee, but their lattes smell and look ono (delicious). The stock has not touched its 50-day SMA since mid-September. I thought 55 was the doldrums a couple of months ago, but MCD is off its recent high of 62-plus.


















At 60, MCD is not a buy in my book, but growth in China is compelling. Rare is the opportunity for an old food company to shoot for the moon. As Starbucks sinks, McDonald's grows.

Pupule's Top 25 (Dec. 25)

No. 9 First Solar: En fuego

Talk about a stock on steroids. That whole theory that some fund managers sell off shares when a stock is double its 200-day MA hasn't held true yet for First Solar. The stock closed on Monday at 272. Its 200-day SMA is 114. Either FSLR is due for a big-time pullback, or solar is going to continue exploding. Chart looks a lot like Baidu of earlier this year.


















Insane. More than 40% above its 50-day SMA. When the stock runs dry of buyers, look out below. Co is fine. The bulls are playing a game of chicken at this point. Who will blink first and run for the exit?

Pupule's Top 25 (Dec. 25)

No. 8 PetroChina: Can't beat 'em? Join 'em

No question that PTR has the protection of big brother, and nothing will change that in the near (or distant) future, I think. China will need every source of energy to fuel its monstrous growth. Coal won't do it alone, and neither will solar. Demand for oil continues to grow, and PetroChina is the king of crude in the Middle Kingdom.


















So many islands in the PetroChina Sea. There's no other chart quite like it, though CNOOC comes close. Traders have fed like sharks on this meaty ADR. At 181, PTR is at its 100-day SMA and is far, far below its 50-day SMA. I hate to call this a buying opportunity with the oil market being as violently volatile as it is. But there are quite a few analysts who believe $100 for a barrel is more of a soon-to-be fact than fiction. Those analysts also think the price of crude will slip after hitting the $100 mark.

Either way, demand is king, and China needs oil. Did I mention Big Brother?

Pupule's Top 25 (Dec. 25)

No. 7 China Mobile: Beast of the East

This is why getting basic is always a good thing. Fundamentally, China Mobile is a raging growth stock. Technically, however, I bought it a few months ago at 95, when it was near a top. That never works out, really, in the short term.


















At 91, though, CHL is now pushing up through the 50-day SMA. For some folks, this is bullish. For bargain hunters, it's too late. For optimists who see a lot of green in CHL's future, it's never too late. Me? I'll hold off until the next pullback. This Co's dominance in China, plus the people's addiction to cellphones (they access the internet through phones more than computers), warrants close attention.

No. 6 Potash: Meeting global demand

China and India are growing significantly. So is Brazil. Greater income means more meat consumption, and that's where Potash comes in with its top-line fertilizers for corn and soybeans. Stuff like that. I don't know much about Potash except that it's a cash cow, no farming puns intended.


















The stock has tripled since March, but even now is not far off its 50-day SMA. I wouldn't touch POT until it touches the 50-day.

No. 5 Nintendo: Steady winner

Can't find a chart that can be posted here, but according to Yahoo, NTDOY.PK is below its 50-day SMA. Cheap at 72?

Nintendo chart

A relatively safe investment. The stock doesn't soar or crater like the rest of the tech sector, partly because the Co is so adamant about limiting supply. Probably the most conservative management of all tech companies in Nasdaq.

No. 4 Intuitive Surgical: Nosebleed territory

This stock looks like RIMM earlier in the year (pre-split). ISRG refuses to dip below its 50-day SMA and has come nowhere near its 100-day SMA since March. Such is the way for a company with great, life-saving technology.


















ISRG is now closer to 400 than it is to 200, which is right about where its 200-day SMA is (201). If ISRG makes a move to 402, I expect to see major unloading from fund managers.

No. 3 Research in Motion: Post-earnings lull?

Research in Motion busted through estimates and raised guidance on Thursday, propelling the stock roughly 19%. The stock has sold off from a pre-market high of 123 (Friday) to below 118 today. Once guidance is raised, there's not much upside room for any stock. RIMM is not just any stock, though, and imminent news about the BlackBerry in China, for example, could move the stock again. After all, it is still $17-plus below its all-time high.


















Will traders move profits over to Apple? Possibly. But I think RIMM will hold up at this level, particularly through the early part of January. There have been too many reiterations of price targets in the 140-150 range since Thursday's earnings report.

Pupule's Top 25 (Dec. 25)

No. 2 Google: Has the ship sailed?

Oh yeah, Google was available cheap to you, me and the polar bears back in August, when even global warming couldn't stop the chill around the stock. After missing analyst estimates — an odd thing considering Google never provides guidance of any kind — GOOG sank below 525 ... then below 500 on August 16. The stock was below its 50-, 100- and 200-day SMA. Talk about a bargain.



















Well, GOOG is now light years away from its 200-day SMA. As with Apple, Google's 50-day SMA has provided a good indicator of a bottom twice since mid-November. Only 3.3% above its 50-day SMA. Always worth watching closely, more so now than two months ago.

Pupule's Top 25 stocks

No. 1 Apple: Santa's gift?

January is less than a week away, which means tech stocks are ready to ramp up — new-year upgrades by analysts will have portfolio managers and hedgies likely load up. But does that mean a buy at any price is acceptable? Absolutely not. Smart shoppers pay less and gain more. That's why I'm going to examine the X-Rays of my Top 25 stocks and determine which are actually priced well or not.

After all, this market punishes all stocks mercilessly, treating Apple no better than punked stocks like (fill in the blank with a mortgage or financial).


















The 50-day simple moving average has been a steady indicator for AAPL. Since April, the two times when AAPL dipped below the 50-day SMA (mid-August, mid-November) proved to be buying opportunities. AAPL had no business breaking down like that, but the 50-day blue line told us when the fickle subprime crisis/market climate was ready to freeze over, when it would warm up, and generally, that AAPL would be fine.

The stock is nowhere near bargain levels anymore, and is gradually starting to approach 2x its 200-day SMA (272). That's a key indicator to watch; there are managers out there who use that simple equation to sell off in a big way. Of course, I'll be more than happy to take profits at 272 if need be.

Today's move to 198 was interesting, but with minor volume, it may not stick. Too many people handling the big money are on vacation this week. January could be nice.

Pupule's Top 25

As much as I would love to own long- and short-term shares of AAPL and little else, my experience with Crocs (and lululemon and China Digital TV and more) is still fresh, still stings and still tells me that the big boys will and can do whatever they want at any time. Owned CROX from 40 to 75, didn't sell a share along the way. As with CROX, there was no way to get out between 75 and 60, which is where the stock was after Q3 earnings were slightly disappointing back in October. From there, it was a straight drop to 40. All profits gone, and then some because I bought more (foolishly) near the top at 73.

So, maybe AAPL is one of the few stocks worth nickel and diming with 24-hour surveilance. But the risk is immense when it comes to market climate and investor/trader schizophrenia. This is why I am going to keep a "Top 10" list of stocks I would considering owning both long term and short term. Criteria?

a. Accelerating earnings growth for at least three years
b. Product originality, i.e. killer app(s)
c. Best of breed
d. Double-digit return on assets and return on equity
e. Double-digit (quarterly) revenue and earnings growth
f. Healthy total cash vs. total debt

These stocks may meet the criteria. Homework time.

My Top 25

1. Apple | pro leader in cool tech/electronics | con no margin for error
2. Google | pro leader in search/online advertising | con roadblocks in China?
3. Research in Motion | pro leader in smartphones | con too expensive for China?
4. Intuitive Surgical
| pro
leader in surgical technology (DaVinci) | con thinly traded
5. Nintendo | pro gamemakers rush to make Wii games | con Co micromanaging growth
6. Potash | pro leader in global ag fertilizer | con considerable competition
7. China Mobile | pro lock on Chinese wireless market | con overbought by big money?
8. PetroChina | pro mainland China, govt protectionism | con fickle oil market
9. First Solar | pro leader in solar energy | con plenty of competitors
10. McDonald's | pro major growth with breakfast | con subject to trifling dollar

11. Suntech Power | pro
leader in China alternative energy | con stiff competition
12. Chipotle Mexican | pro 
high growth restaurant | con subject to consumer spending
13. Baidu | pro 
leading Chinese search engine | con dwarfed by Google
14. Foster Wheeler | pro
infrastructure king | con subject to U.S. spending
15. Flowserve | pro
leader in pumps | con subject to domestic spending
16. Focus Media | pro
advertising leader in China | con limited to electronic ads
17. Goldman Sachs | pro
king of financials | con lack of consumer confidence
18. Nike | pro
growth in China | con intense competition
19. CNOOC | pro
offshore China, govt protectionism | con fickle oil market
20. VMware | pro
virtualization leader | con MSFT on its tail 

21. lululemon athletica | pro
yoga niche, strong demographic | con consumer spending, competition
22. Microsoft | pro
Halo starts momentum | con no other originality
23. Amazon | pro
Bezos has few peers as CEO | con China is a mystery 
24. eBay
| pro PayPal continues to rule | con horrendous customer service
25. China Life Insurance | pro growing middle class | con economy faces inflation

Friday, December 21, 2007

Back to even with RIMM swing: Now what?

Now? Now I keep holding. In other words, leave RIMM be.

RIMM today (Friday, Dec. 21, 2007)
A sell at the open (122) and buyback at 118 might have been prudent for the swing shares, but oh well.

RIMM (two-day chart)




















RIMM (one-year chart)




















RIMM (one-month chart)
Even after today's huge gap up on huge volume, shares are still $17 off all-time highs. What's not to like?

The RIMM swing trade: standing still

Research in Motion traded above 123 in pre-market, opened at 122, sold off to 116 and is about to close at 118. Should I have sold? Perhaps. Going from sub-100 to 123 is a hefty gain in any language. My long position entry point is 103 (average). My swing trade shares entry point is 120. So I'm holding on through the selling.

In hindsight, selling at the open (122) and buying back swing shares at 118 would've made sense. The market has a chance to stay bullish for a few days, perhaps through the final third of December.

Nice to see Apple rally, now at 123, less than a buck off its intra-day high. If I buy more shares of either, it'll be Apple especially because I have a slightly smaller position in AAPL than RIMM.

If not Apple, then definitely more Nintendo. Have not added more NTDOY.PK shares in three months or so. My nephew loves his Guitar Hero on Wii. Why not get Activision (maker of Guitar Hero)? Activision is peaking and my intolerance for flitty, fickle smaller cap stocks won't let me get in. If the Fed gets busy with a drastic rate move, I'll consider another ride with a small- or mid-cap retail. Otherwise, no, no, no.

The vomit is still fresh from roller-coaster rides on Crocs, lululemon athletica, China Digital TV, etc. If there is a next time, I'm banking the 50% and 70% profits.

Thursday, December 20, 2007

RIMM beats estimates

At 65¢, Research in Motion beats estimates ($.62) and raises guidance.

Research In Motion Reports Third Quarter Results

Stock trading at $116 in after hours. Yee Haa.

DNDN best observed from a distance

It's been a week since I paid much attention to the market, particularly Dendreon. Once burned severely by this stock (and a corrupt FDA), I prefer to keep my distance and watch from afar. Since last week's news that Congress may probe the FDA's rejection of Provenge, the stock has slumped as low as sub-$6. Not my type of stock.

RIMM's day to shine or slide

Research in Motion moving up today in anticipation of tonight's earnings report. Down more than 20% from its highs, the stock (currently above 105) could do just about anything when the report is announced. Some RIMM longs are using options to hedge their positions either way. Some are selling a chunk of shares on today's run-up. I intend to hold all the way through. For all its warts, the stock is still more than a double in the past year and still has significant space to grow.

RIMM (past week)

Thursday, December 13, 2007

Dendreon spikes up

Dendreon the move, up to nearly 7 (23%). Why?

Huckman: Congress Asked to Probe Denial of Dendreon Drug

Will the crooked bastards at the FDA finally get their due? Stay tuned.

DNDN intraday





















DNDN daily

Good news for RIMM

Banc of America is bullish on RIMM, and the stock is up more than 4% to 104+ today.

In a client note late Wednesday, Banc of America Securities analyst Tim Long reiterated his "Buy" rating and $146 price target for Research and Motion shares. Long predicted that next week the company will report third-quarter revenue of $1.64 billion, which would be near the high end of its guidance.

"Checks have been positive and we haven't seen any signs of an enterprise slowdown. We think November quarter sales have been driven by strong Curve sales, 8830 sales and the introduction of the CDMA Pearl," he said.

Long also expects the company to issue positive fourth-quarter guidance.


At the time of the Forbes.com story, RIMM was down to 99+. Any semblance of good news was going to light the stock up. So, while the rest of the market had rallied (erratically) over the past week, RIMM sat in the corner. Now the market is flat, and RIMM is igniting. Buying in the final two hours today was heavy. Probably will continue in the morning. Would've made a productive daytrade. I'm still holding my long and swing shares beyond earnings (Dec. 20).

If the B of A news isn't enough, China Mobile announced that the BlackBerry goes out in January.

BlackBerry Mobile Phones to Debut in China in Jan 08

The BlackBerry 8700g mobile phones are being tested by the mobile carrier now and are expected to make its debut in the market next month, said the employee.


The market for cellphones in China has been insanely robust for many years now. People there access the internet via cellphone more than any other means. Nihao ma!

RIMM intraday





















RIMM daily

Wednesday, December 12, 2007

Fed throws lifeline to the market

Warren Buffet says he pays no mind, no attention to rate cuts. He buys a stock because of fundamentals. He has trust issues when it comes to his money, his clients' money, so he seems to visit every Co that he invests in. His approach seems to work pretty well for him. For the rest of us, today's tweaking by the Fed is welcome and wanted.

Fed Teams With Central Banks on Credit

Sure, it would be nice to buy furniture stocks and kick back with a burger and milkshake in beautiful, peaceful Omaha. But even Mr. Buffet has said that if he had a much smaller ship to steer, he would take on a bit more risk and collect much more reward. Would he buy RIMM and AAPL? Probably not. Even with his friendship with Bill Gates, Buffet isn't much of a tech fan.

Maybe someone should get him a Wii for Christmas.

Apple is smokin' hot, up 3% to 194+. RIMM, sorta hot, up 1.5% to 99+. Hate to admit it, but RIMM is dead money until the big boys get back in. On the positive side, only eight more days until RIMM earnings is out.

Tuesday, December 11, 2007

lululemon defies the market

While the rest of the market tanked, how did lululemon athletica hang on to most of its gain today? LULU opened at 43.60, soared to 48.50, and even after the Fed announced that it would cut only a quarter-point, closed up 7.8% at 47.00.

Was the rate cut enough to help all retail stocks? Not really. Crocs took a fall, though it had rallied big recently. My guess is that some of the big boys held on to their shares. Period. The LULU earnings report of Nov. 29 was powerful, and the big boys think the Fed will cut the rate again sooner rather than later.

Whatever the case, volume in LULU was huge today. The stock is expensive now, well above its moving averages. I got out of LULU weeks ago, but the Co is still compelling, growing and young. Watching from a distance here.






















LULU vs. NASDAQ

Black(berry) and (Jet)Blue skies ahead

Oh woe is me. Trading without rules, or rather, strict adherence to rules, has me stuck in swing shares of RIMM. I have no doubt about the company and its products. I just did not treat the swing shares as I should have.

"What all the research boils down to is not to make decisions but rather to follow rules and procedures and to act in accordance with policy." —Jason Zweig

I have much to learn about trading, or rather, about adherence to policy. I need to tap into the inner Mr. Spock in me. In the meantime, the JetBlue-RIMM connection is now official.

Thursday, December 6, 2007

Which of these 3 is not like the other?

Well, even on Sesame Street, it's easy to see "Which of these three is not like the other? Come on, can you tell which one?" Between Apple, Google and Research in Motion, price action speaks volumes, no pun intended. Apple and Google gapped up nicely yesterday, while Research in Motion continued to flounder, losing all of its early gains to the disdain of longs. That would include me.

Apple moved up on stronger volume, while Google increased with stagnant volume. RIMM, however, continues to flounder, and the increased volume of the past three sessions concerns me. Nicolas Darvas paid extreme attention to price action, and he would have bailed out of RIMM many points ago, I believe. He often wrote that odd fluctuations (I'm paraphrasing) were clear signals of danger. By getting out on set stop-loss targets, he often avoided what turned out to be tumultuous events for these erratic stocks. The catastrophies were sometimes predictable, he wrote, by reading the price action.

Apple got an upgrade this morning. The climb back to the all-time high (193) continues. Which of these three is not like the other? Take a wild guess.

Apple




















Google




















Research in Motion




















I certainly don't think RIMM is en route to a disaster. Costs are under control, direct competition is still distant — the iPhone and BlackBerry appeal to different demographics — and growth is imminent. As an Apple long, I think the "Cool Factor" of an iPhone reigns, but there's nothing quite like the CrackBerry, and China's appetite for All Things Cellphone will devour the product en masse.

Tweaking my Apple radar

Wow. Love the Apple rumors and prognostications. A 12-inch, $800 "sub-notebook" sounds really interesting to me.

Eight Predictions for MacWorld 2008

Wednesday, December 5, 2007

Rules are meant to be kept

Trust the technicals. Another mantra to seal into the memory. So much selling pressure was on Research in Motion in the past week, regardless of bad economic numbers or the (previous) silence of the Fed. Looking back to Monday's blog about pyramiding, here's what that process would have generated with RIMM.

Thursday, 120, 10%
Friday, 113, 20%
Monday, 104, 30%
Tuesday, 101, 40%

Prior to Thursday, I'd been trading swing shares of RIMM without much caution and made a decent profit on two trades. This pullback hurt, but the lesson is carved in stone: 1) pyramid into a position, 2) trust the technicals and 3) always set a stop-loss order. At 120, RIMM was expensive, trading above its moving averages and due to pull back.

RIMM opened a few minutes ago and had a high of 106.31, well above yesterday's close. Already sold down to 104.55. Another volatile day ahead.

Monday, December 3, 2007

Expect the Unexpected

That's what I should've done. Instead of jumping back into RIMM for another swing trade with a full buy, the 10-20-30-40% approach would've worked. Well, not worked — RIMM is down nearly $16 since my buy — but the piecemeal approach would've helped.

Thursday, 120, 10%
Friday, 113, 20%
Monday, 104, 30%

Yeah, a smarter move than assuming that Big Ben's effect on the market would have staying power. Turns out the market was out of juice after rallying sharply for a few days.

The final 40% chunk of RIMM swing shares tomorrow (or later) would've been the biggest piece, and I wouldn't be underwater so badly. RIMM still rallies before the end of this month. The approach should've been smarter.

Friday, November 30, 2007

RIMM, AAPL tarred and feathered by mutual funds?

Nasdaq down just 7 points, but Apple ($182.22, -$2.07, -1.1%) and Research in Motion ($113.82, -$8.26, -6.8%) got pummeled. Why? Some theories.

• This is November 30, end of year for mutual funds, which begged for profit-taking. The swoons today were in chunks, huge volume chunks, not your retail investor type of move down.
• Big run-up from the recent low of 97 gave sellers reason to get out.
• MMs shook out all weak hands, taking advantage of an overall optimistic atmosphere (Kohn + Big Ben = Santa Claus) in these two tech bellweathers.

The sad thing is, I've normally gotten good prices on my top/favorite stocks precisely in this kind of selloff. Friday buys, late in the day, have been good to me. This would've been a prime example since RIMM dipped below 113 after opening at 124. Instead, I bought on an early dip at 120, completely naive about what was to come. AAPL got as low as 180+ before rallying to 182+ at the close.

Still, if my theory about the mutual funds is right, they'll be buying back in next week, and 113 will be history.

Piper Jaffray? Sure. Their channel checks may be justified. They probably unloaded more RIMM onto the market than any other institution. But they released their news after the market had opened, right into the high at 124, if they truly did sell today. The fact that the checks were done strictly in the U.S. is an easy way for PJ to justify the lower target price (from 137 to 134). In two weeks from now, will we hear from PJ that European channel checks were fantastic? Or that sales in China are booming? That the price target is back up to 137? Wouldn't surprise me.

Again, no matter what the mood, technicals win out. Technically, nobody should've been buying RIMM this morning. However, 112-113 is where the 50-day simple moving average is. RIMM was a buy, by my book, in the final hour of today's session. Becoming technically sound is a lot harder than it sounds.

Biggest lesson I have not learned: Set a tight stop-loss. In this case, a 1% stop-loss would've had me out of my RIMM swing shares at 119.30. Bearable, no pun intended. Darvas was right. Always set stop-loss no matter how giddy or optimistic the market appears.

Piper Jaffray lowers RIMM price target

Analysts. Love 'em or hate 'em, they have clout.

Piper Jaffray Sees Research in Motion (RIMM) Going To $134

Piper Jaffray lowered its price target on Research in Motion (Nasdaq: RIMM) from $137 to $134, but maintains a Neutral rating. As Piper Jaffray expects a seasonally slower February quarter, the firm also lowered Research in Motion's FY08 EPS estimates from $2.21 to $2.13 and FY09 estimates from $4.57 to $4.46.

There's more. Competition picking up. But overall, it's the lowered target price that triggered the selloff this morning. And to think that I stayed out of some swing trade, small-cap ideas to stick with my "safe" RIMM. Looks like I'll see 115 before I see 120 soon.

Doh! Getting rocked by RIMM

Summary of a buy gone wrong, or a buy that was 10 minutes too early.

4:58 am (Hawaii time)
Bot RIMM @ 120.50
As expected, RIMM bounced in pre-market to its highest level in recent days (124.50), and then sold down just before the opening bell. I didn't know when it would return to 122, but it happened real quick. Just 30 minutes into the session, RIMM is trading at 120, which makes my buy seem silly when I thought it was quite a steal after selling yesterday at 122.00.

Caution is the theme, even with Big Ben's boost. RIMM has run $23 since its recent low of 97. Ideally, I would've held my swing shares of RIMM through yesterday and sold this morning above 124, but a win was a win. At one point this morning, every stock that I watch was in the green. Now the only one in the red is RIMM.

5:00 am
RIMM is sliding under 119. Something might be very wrong here. This could turn out to be painful ... or just another buying opportunity for patient RIMM traders. I know Google is going to bid in an FCC spectrum auction. How does this affect RIMM? Not much, not now. Panic selling more than anything.

5:10 am
Woah. I could've had RIMM shares as low as 116.63. It all happened in the past 10 minutes. Now RIMM is back up to 118.60. If anything, GOOG's news this morning should be a plus. Google wants to do the software in cellphones. RIMM provides the hardware. It should be a match more than anything else. But the market currently thinks otherwise, it seems. I think it has more to do with hedgies taking profits since the run from 97, and/or MMs shaking out weak hands.

I held my swing shares from 114 to 106 last week before RIMM finally turned around. I'll be holding the swing shares here, as well.

Thursday, November 29, 2007

RIMM tempts again

Was quite tempting to pick up swing shares of RIMM in after-hours. As Big Ben delivered his speech on the side window of Kudlow's program, RIMM went from below 122 to 122+ within minutes. I did a little chasing with a buy order, but gave up after the stock went over 123. Yeah, had I snagged more shares at 122.10, I would be smiling right now. The stock closed AH trading at 123.50. But I didn't catch it and let it go. My long shares are good, but even with Big Ben's talk about the Fed remaining "flexible," RIMM is still very hot. The stock has run from a low of 96 in the past week-and-a-half.

If RIMM stays hot and runs more in pre-market, fine. But I'm expecting a bit of a selloff back to 122, possibly 121 before it takes off again. Technically, RIMM is due for a healthy pullback sooner than later, but I'm just looking for the best entry point possible for a short-term trade. Learning my lessons.

Long-term, this is not a buy at this entry point. Or is it? The MACD indicates a possible yes. But the stock is floating above all of its moving averages, which tells me no. So who wins: declining volume (bearish) or Big Ben's "flexibility"?

Selling RIMM into strength

Sold RIMM @ 122.00
Net: +7.50/share

Sold the swing-trade shares only. Still long on my original shares. Of course, the stock is now at 122.22 after I sold. It's the same thing that I read recently, that the feeling of holding a winning stock is addictive, as opposed to the feeling of actually locking in the profit. The last time I sold for a decent profit, it was RIMM. And I reacted to the price holding its ground higher than my sell price by buying back in almost immediately. That's how I wound up with RIMM at 114.50, then holding all the way down to 106+. Right now, the worst thing I probably could do is keep watching the stock by the minute. If the market rallies into Bernanke's speech (after the bell) and he ends up disappointing, it's bad news whether I get more RIMM or AAPL later or not. If he doesn't give the market confidence, the air will go out of the balloon at least until the Dec. 11 Fed meeting.

If he makes the market happy, then I might swing trade RIMM again at a higher price.

The market is flat today after a two-day record gain. DJ, Nas and S&P all fractionally in the red. Pit stop?

AAPL is up to 182.26 right now, surging in the past 20 minutes.

* Post-market review: I sold a bit early as RIMM ran to 123+. No regrets, though. Never argue with a decent profit.

Wednesday, November 28, 2007

Cramer revisits 1990

Sure, I'll admit it. Cramer was right. If I had approached the market with at least half of positions in pure trade mode instead of buy-and-hold-forever thinking, my account would be much, much healthier. When Cramer called for taking at least some profits off the table when Apple ripped its way above 140 several months ago, I scoffed.

But it wasn't holding or not trading Apple that hurt me. It was the small-cap growth monsters that ran up huge, and then fell off a cliff in the blink of an eye. I coulda, shoulda taken big profits out. I didn't. And with those painful experiences now converted into lessons, I am holding only three stocks, and more than half of my position in RIMM is for swing trading only. Instead of a portfolio of 13 stocks, it is much simpler to manage three. Much quicker and less emotional effect when I'm keeping my attention on just three stocks, and it feels much more fluid.

As of today, Cramer's thinking that we're back in 1990 and that in some ways, the market is bottoming out. Maybe. The past few weeks haven't been too painful for me. I have a lot of confidence in my Apple, RIMM and Nintendo shares, and they've held up quite well lately, even before the rally of Tuesday and today. In my mind, if the market were to crash, I wouldn't hesitate to get out completely, and that kind of thinking is absolutely necessary because we are in an atmosphere unlike any other in the past. My tendency is still to hold through downturns — I rode my swing shares of RIMM from 114 to 106 and back up to the current 121. But I'm becoming more and more comfortable with trading, as opposed to buy and hold, and I'll stay on that track until the U.S. economy regains its bearings.

And that could be years from now. More than likely, Cramer will be more right than wrong during that time.

Holding the RIMM swing shares

Came real close to selling my RIMM swing trade shares at the close of AH. The bid went to 121.80, but the momentum will carry into tomorrow's open, I believe. A stock as strong as RIMM (or AAPL) gives me enough confidence to hold on for another night. Anything less, like CROX or LULU, and I would've taken the profit without hesitation. Bernanke could upset the market tomorrow if he doesn't reiterate what Kohn implied today. The wise will have their fingers on the trigger tomorrow.

RIMM up, but for how long?

Perfect day for sleeping in, and almost a perfect day to be a sleepy swing trader. RIMM is up big for a second day in a row, currently off its intra-day high of 121.44 to 120.89. Up from 111.54 on Monday. Nice run, but there is real weakness in volume. Volume in RIMM on Monday was 30.4 million, and yesterday was 30.9 million.

Right now, with little more than 1 hour left in the session, RIMM volume is just 21 million. Sharp inclines met by prolonged declines. That's the market these days. This rally has been quick to rise and it'll be quick to die ... unless Biggs and Kass are right. The hedge and mutual funds had to cash out of their winners like Apple to offset their subprime screwups, just my little theory. And now, they need to put their cash somewhere before the end of the year. Maybe in mid-December. Maybe before New Year's Eve. Maybe yesterday and today.

I'm inclined to sell my swing shares of RIMM into this strength. It's dark enough this morning here in the islands that I could and probably should be using a lamp. The lightning storm is passing, but it's still a cool 74 degrees or so. Unless volume in RIMM picks up, I'll be selling and enjoying this weather as I work. Who needs the threat of another selloff?

Monday, November 26, 2007

RIMM up, RIMM down

So many common-sense market watchers are wary and cautious because of the breadth of losers and overall bearish tone. This would've been an opportunity to get out entirely, or at least halfway. In fact, my swing trade in RIMM went into the green (finally) today, surging to 117.57 this morning. (The stock moved on an upgrade.) However, it was about 5:30 am here in the islands at that time and I was crashed out in bed.

RIMM and AAPL eventually followed the market and lost early gains. RIMM sunk to 111+, 6 bucks off its intra-day high. AAPL kept some of its gains, one of the few stocks to remain in the green today. I'm bummed that I didn't get out of my RIMM swing trade with a $2-$3/share profit, but there will be other opportunities. Maybe it's time for me to invest in sleeping pills so that I fall asleep at 9 p.m. instead of 3 a.m. Old sleeping habits, going back to my early teens, are hard to break.

So the red alerts are out there. The market gains but can't sustain, and finishes at its day lows. Smart people are getting out. Yet, Biggs and Kass are calling for a rebound in December. Who's right? I suppose both sides are, or will be, at different times.

Friday, November 23, 2007

Chubby's at Kona Bowl

It isn't Tante's Restaurant anymore, but the Beef Tomato is humongous, tasty and filling.

Up, down, all around since August bottom

I formed a mock portfolio a few months back, not long after realizing that Aug. 16 was the bottom of the initial subprime mortage fiasco. Now, more than three months later, it's easy to see whether the current market is really doing as horribly as the media presents. So here's what I found, comparing the intra-day low of Aug. 16 versus Wedneday's closing prices.

Then versus Now

Apple: then 111, now 168, +50.9%
Amazon: then 70, now 79, +13.8%
Crocs: then 44, now 38, -12.1%
Garmin: then 86, now 91, +5.5%
Research in Motion: then 61, now 111, +80.4%
Baidu: then 161, now 307, +91.2%
CNOOC: then 92, now 159, +71.9%
Chipotle Mexican Grill: then 92, now 123, +34.1%
Flowserve: then 62, now 90, +45.6%
Google: then 480, now 660, +37.5%
Blue Nile: then 71, now 74, +4.4%
Nintendo: then 52, now 69, +33.9%
Under Armor: then 54, now 46, -14.1%

As a whole, with an evenly weighted investment in each of these stocks, they would be 34.1% in the positive. Even with the horrendous selloff of the past two weeks, 34% up isn't bad at all for three months of holding. Doesn't mean I'm going to return to a buy-and-never-sell practice, but the numbers appear to be more healthy than I had imagined. Far more.

Tuesday, November 20, 2007

Good Pupule, Bad Pupule

My day started a bit frazzled, but even with my on-hand technology mired in mud, I managed to do the previously unthinkable: trade with discipline. Yep, got out of RIMM with a profit of more than 5 bucks per share. Then I did the truly unthinkable. I went against discipline, bought back more RIMM at high levels — 114.50 — and watched it sink, sink and sink.

Instead of selling at 114 or 113.50, I held, ignoring the fact that the stock had run from 97+ to 115+ in a matter of a few days. I gave up the thought of selling at around 111, simply because this is one of only four stocks that I believe will withstand the mightiest bear market, if it comes to that. So RIMM sank to 106, rallied back to 111 before the close, and finished at 110. In after-hours trading, it is creeping toward 112.

All in all, my good trade early was offset by an absolutely buffoonish trade that is still alive going into tomorrow's market. Good and bad, in one day. Those of you who rode RIMM early from 109 to 115, and late from 106 to 111 get a tip of the hat from me. I give myself a chorus of boos for undisciplined trading.

A small win in RIMM

Sold RIMM @ 113.90
Net: +5.20/share
Got up at 3:10 am (no alarm), fell asleep, had a really strange dream, got up at 5 am. That's 30 minutes after the open. Ugh. Then the laptop was slow, and eventually I restarted it. All that cost me a point or so since RIMM hit a high of 115.50 in the first half hour. But a win is a win, small or large. Of course, the stock ran back up to 114.66 a minute after my sell. Must have emotional distance.

Long-term shares still going strong.

Monday, November 19, 2007

Wild ride for RIMM

Entered a short-term position in RIMM at 108.70. Not the best entry point, and it came after the stock ran from below 104.65 to 109.74 after 2 pm Eastern time. Had my chance to sell at 109.69, but I got too optimistic instead of setting a stop loss to collect a small profit or break even. Quite a roller-coaster ride after that, and the stock sank to 106.27 in the final half hour before rallying to 108.02 at the close.

Considering the market was down (Nasdaq -43, -1.66%; DJ -218, -1.66%), my long-term shares in RIMM did fine by finishing in the green.

Apple was negative, down more than $2 to 164.05 at the close. AAPL actually hit a low of 162.10 intra-day. Nintendo was also down significantly today. Last bid was below 66.

Friday, November 16, 2007

RIMM battles back

The better daytrade was in Research in Motion, which had been crushed, devoured, brutalized, murderized, annihilated and pulverized by the institutional sellers for an eternity. The stock was already below its 50-day simple moving average before the market opened today, then dropped from 103 to 96.80. Then came the comeback.

The last time RIMM dipped beneath its 50-day SMA, three days of huge gains followed. Since we're not in Fed-cut mode anymore, this will be interesting to watch next week. I'm still long RIMM, but I felt more comfortable daytrading AAPL. That may change on Monday. Or not.

Good Apple for the day

Sold AAPL @ 166.75
Net +2.86/share
The strangest feeling, clicking the sell button on a stock with momentum just two minutes before the close of after-hours trading. My web browser stalled up, a rarity, and I shut it down. When I came back to my online broker, the sale had executed. What Jason Zweig said recently about the psychology of selling stocks is true. I'm like a lot of people, apparently, who are more comfortable with the feeling of holding a winning stock rather than locking in those winning profits (rRe: CROX, STV, LULU, etc.).

Though I had a sell price of 170 on my AAPL daytrade shares, I returned to discipline mantra: not to make decisions, but rather to follow rules and procedures and to act in accordance with policy. That means selling the daytrade shares. I could have rationalized that the trade isn't done, it could become a swing trade going into Monday morning. But the volatility of this week, so many down days, has me wary. I'd love to believe that the correction is done, but I can't. I think the market remains in erratic mode for awhile. Therefore, I will continue to daytrade a half-position in AAPL. If I can get nearly +$3/share as I did today with one trade, I'll be content.

If AAPL opens at 167 or 170 on Monday, so be it. Everything will depend on the market, on news. But if AAPL opens below 166 and the market is neutral, I'll look for a re-entry point.

X Factor: Volume was lower today and did not surpass volume of the previous six sessions. Not an overwhelming indication that Apple's rally will fizzle, but bullish either.

One-day chart below. I like stockcharts.com, but bigcharts.com has the one-day chart. I slept through the big run. I actually remember falling asleep as AAPL began to bounce of its low of 159. Told myself not to bottom-fish just yet. It was about 5:30 am Hawaii time. By the time I got up, it was after 7 am (noon Eastern) and the stock had already run to 167. Amazing. But I like the entry point AAPL gave me later at 163.89.

Sorry for the sloppy lines. I don't have a mouse, nor a pen thingie for the laptop.