Over the course of several months, various stocks have been mentioned as potentially good or bad trades on this blog and several readers, noticing that the mentions have been scattered all over the place, have requested for all those to be put together… so here is a look at some.
Bank of America (BAC)
On October 23 (and before) BAC was highlighted as a strong buy and best return among the bunch of big-5 banks – should be held to price target of $11.35, the 200-week moving average. These long-term investors should expect consolidation at that level. This sideways price action could bring in the 50-week moving average over the 200WMA – the super bullish sign. Incidentally, the upturn in the 200-week average line in BAC looks like foreshadowing of the the upturn in interest rates on the longer bonds.
Last week, it was noted that an upturn in the daily momentum should be expected and the catalyst for that was the decision to fire 11,000 workers. C has a $40-$43 price target with a slow, doubtful grind higher.
Walter Energy (WLT)
This name was highlighted as a stock with lots of bullish attributes and for those with the stomach for volatility could stay in the name with a stop just under $28. For those like me who got into this trade on technicals that did not materialize getting out at $33 is a good way to cut the opportunity cost of holding crapy equity. Walter tackled on more debt and some question whether they have cash to fund their operations. Others claim they are good take-over target but why would take-over pursue a falling knife?
Discover Financial (DFS)
DFS looked like a monster heading inexorably higher but, about a month ago, the name failed to make a new high and when, after the drop on the “cliff sell-off”, it failed to break higher, the momentum has confirmed that something not-good is happening to DFS and that next week’s earnings report may clarify what that may be. The bad technical signals going into earnings should be a huge red-flag. As a result, this name should not be held into the earnings because it could easily drop to $37 or worse. The weekly chart also confirms the negative price-momentum divergence.
This is a great name and those in it should stay. Initiating a new buy in this name is kind of problematic right now because it is consolidating a break out. A good time to buy it was at $46 when it was clear that it refused to go lower. Weekly chart is suggestive this name seeks ways to go higher.
This housing-fav, with the nicest looking chart, has a long-term target at $52 but the time frame of getting there is questionable, so those of you who are considerate of the opportunity cost of holding equity may want to wait until the current consolidation finishes it. LEN has failed through break through $39 several times but it has also failed to decisively break below $34 on the downside. The $5 trading box in this name could, conceivable last as long as the 50-DMA needs to catch up to this price space or the price could catch up to the 50-DMA which is at $29.50. Fundamentals are also great especially the rising house price index which has a steep price slope and that means that LEN is operating in price appreciating environment (profit margin expansion), a great situation for any company.
International Paper (IP)
IP should be a hold & and more shares should be bought if it dips into $32 range. They are able to pass on the price of packaging and the nice dividend has a price floor under it.
This name should be loaded on as we speak for the next lazy, boring move higher.
Should be purchased on dips below $34 for a lazy, boring and choppy move higher as the government provides the floor.
Not so sure what to do with this holding at this point considering opportunity cost of holding a position that may move sideways. It is in the process of consolidating its parabolic move into $38 as people went chasing yield. We may be for a prolonged sideways price action so for folks happy to collect yield as price flickers flat, T is OK.