03-12-2010: Climbing Aboard This High Flyer |
Zenith oftens stays away from the "fad" stocks for a number of reasons. First, we hope to find that "undiscovered" stock which others have overlooked, which will not be found among the most heavily-traded. Also, "fad" stocks prices are often driven by trend-following traders who know little or nothing about fundamentals and set themselves up for a crash. But occasionally one runs across a "fad" stock, often on the most heavily-traded list, which really is a good stock with solid fundamentals behind it. It seems then that everyone wants to climb on the bandwagon, researchers, analysts, and raters of all kinds. Such a stock is Apple, Inc. Through introductions or a large number of innovative products, the company has risen to the point of having a $23 billion market capitalization and $36 billion in sales. This company knocks our formats off the right side of the page because of its sheer size. Who would have thought it back in the days when most micro computer manufacturers were going out of business when IBM entered the market?
This stock has managed to garner just about everyone's attention, including ours. Yet on materials provided by the company, we couldn't even find a decent image of its corporate logo. So we had to go and grab a shot of the logo from a storefront, because Apple is about selling its products, not about touting its stock.
Our article on Apple, Inc. (AAPL) is in the Archives Section below.
Our 39 Stocks Tracking Program |
This is an experimental daily tracking program for each of the 39 stocks on our Active List. (We may be able to update this only every few days.) Please do not utilize it before testing it to your own satisfaction.
Instructions for use are as follows:
This program looks at the maximum or minimum price attained by each stock over a period stated at the top of the program. Under the column headed "Sig" (Signal) there are two arrows. The first arrow corresponds to the long-term direction we think the stock might move according to the Decision Matrix in the original article written about the stock. (Most stocks on Zenith are considered "buy" recommendations, but some are short candidates.) We believe in the short term, all stocks can be traded long or short because the overall market direction will swamp out fundamental considerations. But it is important tokeep the long-term in view, as well.
The second arrow under the "Sig" column is the critical one. We draw two least-square lines through either the highs or lows of the daily prices along the period indicated, and then take a fraction of the distance between those lines and the extremes (maximum, minimum prices) to determine potential entry points. These are considered "best prices" for the moment. These points are indicated in the columns headed "HiEnt" and "LoExt", respectively. The intent is to get you the best price as there is a high degree of probability one of these prices closest to the most recent close will be hit again in the near future. The entire list is ordered by a factor in the "Rank" column which is the difference between the minimum price ("MnPr") and the most recent Close. The second arrow under the "Sig" column indicates if the close is within the area between the minimum price and the LoExt, or between the maximum price and the HiEnt. The second arrow has been set up for a trending signal. idea is to get the "best price" for a good-until-canceled limit order. If one thinks the market is trending, then the idea would be to take advantage of a "breakout."
For trend-following traders, the list has been ordered so that all the buy signals are at the top and all the sell signals are at the bottom.
For reaction-following traders, the signals should be reversed. Most of the time, the market is trending, but when it does react, it can quickly recover the profits being lost by trend-followers who hung in too long. Zenith's traders generally use reaction (oscillator) indicators, but only after some recent and immediate momentum is established in the direction of the trade, i.e. never trying for or at the exact top or bottom. Reacting systems are not recommended by us for the average trader (Do as we say, not as we do.)
There is a way to offset overall market influence to reduce risk, simply by diversifying, trading stocks from both ends of the list and having an equal number of shorts and longs. This will mess up "buy and hold" strategies but is useful for day traders.
03-12-2010: Apple, Inc. (AAPL): Garnering Everyone's Attention
03-08-2010: Waters Corporation (WAT): Stock a Bit Disappointing
02-28-2010: Partnerre Ltd. (PRE): When Life Is Good
02-25-2010: Prosperity Bancshares Inc. (PRSP): Steady Growth
02-20-2010: Nu Skin Enterprises Inc. (NUS): Women Will Pay Anything
02-16-2010: General Mills, Inc. (GIS): Stable and Safe
02-12-2010: C. R. Bard Inc. (BCR): Earnings Growth Unsustainable
02-08-2010: Papa John's Pizza International Inc. (PZZA): Phenominal Growth
02-03-2010: Centene Corporation (CNC): Health Insurer or R/E Developer?
02-03-2010: Metropolitan Healthcare Networks Inc. (MDF): Needs a Better Listing
01-28-2010: Interactive Data Corporation (IDC): Jumps on Buyout Rumor
01-23-2010: Sturm, Ruger & Co. (RGR): Shootings Not Our Responsibility
01-19-2010: Amedisys Corporation (AMED): Medicare Demands Efficiency
01-14-2010: Wonder Auto Technology Group (WATG): China Again!
01-12-2010: Zenith on Religion
01-11-2010: Telestone Technology Inc. (TSTC): A Bet on Western China
01-09-2010: Alliance One International (AOI): Socially Irresponsible
01-07-2010: NewMarket Corporatioin (NEU): Got the Lead Out
01-03-2010: NStar Company (NST): Rates Coming Down Index
12-30-09: Silgan Holdings (SLGN): Joins S&P 400 Index
12-23-09: Direc-TV Group (DTV): Checkered History
12-19-09: Allscripts-Misys Healthcare Solutions Inc. (MDRX): Waiting for Some Stimulus
12-15-09: Valley National Bancorp (VLY): New Jersey Good Life
12-11-09: Gymboree Corporation (GYMB): Poised for Further Growth
12-06-09: F5 Networks Inc. (FFIV): The Internet Is the New Economy
12-02-09: Bucyrus International Inc. (BUCY): Researchers In Agreement
11-24-09: Linn Energy PLC (LINE): Large Dividend
11-19-09: Huntsman Corporation (HUN): Takeover Candidate
11-17-09: Montpelier RE Insurance Holdings Ltd. (MRH): Not Boring
11-13-09: Warner Chilcott PLC (WCRX): Five Tax Jursidictions
11-10-09: Calgon Carbon Corporation (CCC): Overseas Selling or Protectionism?
11-04-09: Vulcan Materials Co. (VMC): Waiting for Some Stimulus
10-30-09: Zimmer Holdings Inc. (ZTH): Stable, Relevant, and Sound
10-28-09: Cogent Communications Group Inc. (CCOI): Top of Internet Food Chain
10-25-09: NVE Corporation (NVEC): Spin on "Spintronics"
10-15-09: EnCana Corporation (ECA): Splitting Into Two Companies
10-09-09: Sykes Enterprises, Inc. (SYKE): Outsource Everything, Even Customer Service
10-04-09: Sybase, Inc. (SY): Software Giant
09-30-09: Knight Capital Group (NITE): Waiting To Pounce
09-27-09: DeVry, Inc. (DV): High Unemployment Means High Enrollment
09-21-09: Ralcorp Holdings Co. (RAH): Acquisition Champion
09-16-09: Cerner Corporation (CERN): Helping Build e-Hospitals
Note: Zenith tries to pick only stocks which are shortable, but sometimes stocks appear afterward on the SEC Regulation SHO list of stocks which are not shortable, which is beyond our control.
On some stocks, Zenith may hold more than the number of shares it trades in its inventory. Thus the "short" sale of such a security would technically not be a "short" sale for us and not subject to SEC rules regarding selling securities which are not deliverable. Also, stocks pop on and off the list available for shorting on successive days, so the presence of a stock on the current SHO list doesn't mean it was there at the time it was shorted.
What are the last three entries in the Active Stocks chart list? These represent typical high-, low-, and mid-cap mutual funds to help us gage the tenor of the stock market as a whole.
Trading in stocks involves risk, and past performance is no guarantee of future profits. Zenith does not sell advice nor does it manage discretionary accounts other than its own. Readers should be aware of the vested interest that all traders / brokers have in encouraging other traders to make the same transactions. No one should follow investment advice blindly. This web site should be used only as a "sounding board" for confirming one's own opinion. Any suggested order placements should be reviewed and reset to fit current market conditions by individual traders.
Recommendations may include trades which have already been made on the same or a previous day,otherwise the issue is placed on a "watch list." Suggested stock trades are based upon an approximate maximum $30,000 capitalization requirement per trade. Zenith's actual trades may be larger.
