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Why LDK Solar (LDK) is not a buy

LDK Solar Co. (NYSE: LDK) is one strange solar stock. Yesterday, on a day when other solar companies like Solarfun Power Holdings (NASDAQ: SOLF), Canadian Solar Inc (NASDAQ: CSIQ), First Solar Inc (NASDAQ: FSLR) and JA Solar Holdings (NASDAQ: JASO) were all strong and despite earnings coming in at the high end of expectations and guidance solidly ahead of estimates, their stock was down. Not only was it down, but it also tried rebounding, only to fail. Not good at all for the bull case.

Experience has taught me to respect the price action the day after earnings. So when I see LDK trying to break out of a now 5-month old range, pretty much between $30 and $40 -- yes it was up to $50 in January and $20 in March, but those are outliers -- this is a very bearish sign. It's so bearish that I suspect that unless solar plays really heat up again, this stock will need many more weeks or months to break $40, and even then, it's got a ton of resistance all over the place due to bitter buyers in at much higher prices who will be looking to cut their losses.

Continue reading Why LDK Solar (LDK) is not a buy

Why Garmin Ltd (GRMN) won't be rebounding soon

While researching GPS maker Garmin Ltd (NASDAQ: GRMN) -- whose stock has lost two-thirds of its value in the last six months -- I can't help but pity those long-term shareholders who reject trend following and technical analysis in favor of investing for the long term. To them, it seemed like only yesterday that GPS was one of the hottest technologies around and this industry leader could do no wrong.

Well, that's usually the time to sell, just as I posted on Apple Inc (NASDAQ: AAPL) in January this year and on Google Inc (NASDAQ: GOOG) in November last year, both before they each dropped 40% in just a few months. Because the truth is these popular technology stocks are all expectations. We're not talking Berkshire Hathaway (NYSE: BRK.A)-type value investing here.

Sure, GPS is still hot, somewhat, but due to intense competition, margins have been evaporating, forcing analysts to lower their earnings estimates. In their latest quarter, Garmin further strengthened the bear case with spiking inventories and accounts receivable. None of that looks to change anytime soon, and even though it's got a P/E of 10, book value is all the way down near $11 per share!

Continue reading Why Garmin Ltd (GRMN) won't be rebounding soon

10 crushed stocks that look to be rebounding

Way back in early March I highlighted 10 horrifically downtrending stocks and said not to even think about buying them until they broke their nasty trendlines to the upside.

Over the past few weeks, many have displayed solid sideways price action, but it wasn't until yesterday that the high volume breakouts occurred. I'm talking about those 50+ million shares traded, 10%+ price surges beautifully accomplished by such popular names like Sprint Nextel Corp (NYSE: S), Broadcom Corp (NASDAQ: BRCM) and Level 3 Communications Inc (NASDAQ: LVLT).

Unsurprisingly, several other stocks also showed similarly strong price action:

RF Microdevices Inc (NASDAQ: RFMD)
Anadigics Inc (NASDAQ: ANAD)
Skyworks Solutions Inc (NASDAQ: SWKS)
Triquint Semiconductor Inc (NASDAQ: TQNT)
China Life Insurance Co. Ltd (NYSE: LFC)
Raymond James Financial Inc (NYSE: RJF)
Cerner Corp (NASDAQ: CERN)

Continue reading 10 crushed stocks that look to be rebounding

Crocs' warning was in its chart, see what others fit the pattern

Damn, it feels good to be right! Back in mid-February, when I warned investors not to buy Crocs Inc (Nasdaq: CROX) after its "big" drop, I had no idea they were going to warn and get crushed again so soon (see, Steven Mallas' post from last night). But the stock's chart pattern told me the odds favored the bear case.

So, you know what? I'm not particularly surprised. Because I play the odds based on what the charts tell me. Sure you're probably sick of hearing that from me, but for better or worse -- and considering my 21% return in the first quarter of 2008 by staying true to the charts, it's been mostly better -- this is my my experienced-based belief.

No matter the stock -- whether you're talking Google Inc (Nasdaq: GOOG) or Wachovia Corp (NYSE: WB), the oil, technology or retail industries, the time of year when it pays to be bullish, analyst expectations (they only get it right 30% of the time) or the market cheerleaders promoting crazy price targets like this one on Apple Inc (Nasdaq: AAPL) --if the chart is too steep, I'm wary. If the chart is downtrending, I'm short-biased.



Continue reading Crocs' warning was in its chart, see what others fit the pattern

How well does trading based on charts perform?

Back on March 24, I made some very rudimentary predictions on BloggingStocks based on the chart patterns of some popular technology names. Let's see how I fared:

Apple (NASDAQ: AAPL) performed just as its chart implied it would -- a clear path from $140 to $160, but no more. Score one for technical analysis!

I noted that while Research in Motion Ltd (NASDAQ: RIMM) had a solid base, a ton of overhead resistance would prevent a big breakout-bingo, another perfect call -- no matter that it wasn't actionable -- the stock's barely higher now, just like the Nasdaq market as a whole.

The very day my original article came out, Priceline.com Inc (NASDAQ: PCLN) did indeed breakout to a new high, but ever since it's done exactly squat. Hmm, was this a self-fulfilling prophecy -- somehow I can't quite claim victory here, although its definitely not a defeat.

Continue reading How well does trading based on charts perform?

What future products lurk in the hearts of companies

When I saw the news of NTT DoCoMo (NYSE: DCM)'s new mobile phone that emits fragrances, I began wondering what other oddities today's corporate powerhouses may be working on. No financial advice here, these are just some ideas I came up with:

Apple Inc (NASDAQ: AAPL) will unveil headgear that doubles as both headphones and a personal masseuse, giving tantalizing head, neck and shoulders massages.

In an attempt to help with falling click-through rates, Google Inc (NASDAQ: GOOG)'s new mobile phone will be offered free as long as you sign Google's activation agreement requiring you to click on a mobile ad every hour, even while you sleep.

Continue reading What future products lurk in the hearts of companies

Some more stocks breaking out to new highs

In this April 1st article, I wasn't kidding around when I chose less popular stocks over hotly debated names like Google (NASDAQ: GOOG), Apple Inc (NASDAQ: AAPL) and Lehman Brothers Holdings (NYSE: LEH). Because investing is not blogging-the amount of hits, traffic and debate a topic stirs up does not help you make money (in fact it might hinder it considering all the cheerleaders are already invested).

Instead, as I often say in posts like this and as I yell to random passers-by on the streets of NYC (for fun), "it's all about the charts, stupid!"

Now, one week later from that article, ask me if I am surprised to see 2 out of the 3 stocks from last week's article-Weatherford International (NYSE: WFT) and United States Steel Corporation (NYSE: X) continuing to breaking out to new highs, with Illumina Inc (NASDAQ: ILMN) "struggling" up only 4% on the week, a few cents off its highs.

Continue reading Some more stocks breaking out to new highs

Amazon bullying raises monopoly and business concerns

In the last few days, bookselling giant Amazon.com Inc (NASDAQ: AMZN) has made a few more enemies in the publishing world by forcing the little-known group of print-on-demand (POD) publishers to either submit to using its POD subsidiary, Booksurge, or risk being prohibited from selling on its industry-leading website. No matter the cost and complications of breaking off relationships with other vendors, reformatting books and a host of other problems, Amazon laid down the law, saying convert -- and do it quickly -- or face the consequences.

What's more disconcerting is that an official press release was made public only after smaller publishers like Angela Hoy of Booklocker.com started writing publicly about blackmail-type phone calls from Booksurge representatives. Fearful of losing their businesses literally overnight, many POD publishers such as iUniverse and Lulu have capitulated while strong willed publisher PublishAmerica refused to give in -- and was quickly made an example of when Amazon disabled the buy buttons on their book titles!

As an author selling my own critically-acclaimed POD book An American Hedge Fund on Amazon, outrage has compelled me to write about how unethical and more importantly, monopolistic this all is.

Continue reading Amazon bullying raises monopoly and business concerns

Ignore random market noise and focus on lesser known names

Google (NASDAQ: GOOG) this, Apple Inc (NASDAQ: AAPL) that, will Lehman Brothers Holdings (NYSE: LEH) follow Bear Stearns (NYSE: BSC) -- bleh, all hotly debated, all random market noise! Noise that you must learn to ignore.

The financial media -- envious of the fat profits generated by such entertainment-based businesses as World Wrestling Entertainment Inc (NYSE: WWE), Las Vegas Sands Corp. (NYSE: LVS) and Wynn Resorts (NASDAQ: WYNN) -- has brainwashed you into believing that in order to make money in the stock market, you must keep up to date with every single headline and development in the business world. Hogwash!

I have no problem with financial entertainment, but I do take issue with all these media outlets making their content out to be useful to investors. I've repeatedly echoed this theme in articles like this and I don't expect this industry to change anytime soon, but I am going to keep preaching so you will better understand how low your chances of success are if you bet on the most popular -- hence the most efficient -- topics du jour. Unless you are George Soros or Warren Buffett or a few other wealthy elderly men, there is always somebody better informed and more intelligent than you are. Hence, you are always at a disadvantage.

Continue reading Ignore random market noise and focus on lesser known names

What the charts of these 20 stocks are trying to tell you

Even in these uncertain times, there are stocks that have far better odds of outperforming than others. Yup, for a minute, just forget about all the different industries, economic guessing games, earnings-valuation time lags and the rest of the market randomness that makes stock picking so difficult and "market gurus" so ineffective. Focus instead on the incredibly telling stock charts of these companies:

Bullish Charts:

General Electric Co (NYSE: GE)
Gilead Sciences Inc (NASDAQ: GILD)
Wal-Mart Stores Inc (NYSE: WMT)
Nabors Industries Ltd (NYSE: NBR)
Home Depot Inc (NYSE: HD)

Continue reading What the charts of these 20 stocks are trying to tell you

ETFs every investor should know

If you've ever delved into investing in ETFs (exchange-traded funds, basically entire indexes and sectors that trade like stocks), you're already familiar with the most popular, those being Powershares QQQ Trust (Nasdaq: QQQQ), SPDR Trust Series 1 (AMEX: SPY), Diamonds Trust, Series 1 (AMEX: DIA), iShares Russell 2000 Index (NYSE: IWM) and lately Financial Select SPDR (AMEX: XLF) and UltraShort QQQ ProShares (AMEX: QID). But have you ever looked into those that are much less followed, but more capable of yielding some big-time returns?

I primarily trade fun smallcap stocks, so until the past few days, I hadn't either. But when I began researching, I just kept finding more and more interesting ETFs -- it was addictive! Almost addictive as my new Twitter account where I've discovered I can chat with business legends, yesterday it was the founder of eBay Inc (Nasdaq: EBAY). Okay, maybe ETFs will never be that addictive!

Out the few hundred ETFs I looked into, here were some of the more interesting of the bunch:

Continue reading ETFs every investor should know

A lesson in how stocks bottom

No matter how hard I promote my core strategy of short selling surging microcaps, the sheer volume of emails asking me about when slumping blue chips like Starbucks Corporation (NASDAQ: SBUX), Sprint Nextel Corporation (NYSE: S) and Nvidia Corporation (NASDAQ: NVDA) will bottom is astounding.

So, this is my answer to you guys. I'm also going to throw in Broadcom Corporation (NASDAQ: BRCM), AT&T Inc. (NYSE: T) and Ebay Inc. (NASDAQ: EBAY) because they all share the same horrifically downtrending charts!

I've already written about how you should avoid these kinds of stocks, but I know many of you are already down too much to even contemplate getting out now. Luckily for you, there now looks to be a glimmer of hope.

Continue reading A lesson in how stocks bottom

What the charts of these 7 tech stocks are saying

While I believe much of the price action in the most actively traded technology stocks to be rather unpredictable, there are specific price points at which the odds can be in your favor. Because so many traders believe in chart reading, or technical analysis, the price action often becomes a self-fulfilling prophecy (as I've written about here). So, let's take a look at some popular names with traders:

Apple Inc (NASDAQ: AAPL), after a big drop, has already put in solid sideways price action and if it can break $140, there looks to be a rather clear path to $160.

Research In Motion Ltd (NASDAQ: RIMM) has weathered this storm incredibly well, putting in a solid double bottom in the low $80s and more recently, holding the key $100 level. There's still resistance at both $110 and $120, so a big breakout doesn't seem likely anytime soon.

Priceline.com Inc (NASDAQ: PCLN) is still in the midst of a strong yearlong uptrend, a mere $10 off its highs. On any market rebound, I fully expect this stock to break out to new highs.

Continue reading What the charts of these 7 tech stocks are saying

Don't invest in what you know: a dozen disaster blue chips

I'm glad all these "blue chip stocks" are blowing up. No, I don't enjoy seeing investors suffer, but as I've written about here, here and here, investors need to learn not trust any company or anybody in this business. Investors don't even have to remain invested all the time! Contrary to the advice of fee-earnings-professionals, the majority of whom continually fail to match the S&P 500's returns, you don't have to manage your money like a $500 million mutual fund. Diversification is for widows and orphans!

While it'll probably take me a few years to truly get through to all of you, if you've been invested for any length of time in any company listed below-considering what you've been through-you're probably more likely to believe me:

Merrill Lynch & Co. Inc (NYSE: MER)
The Bear Stearns Companies (NYSE: BSC)
Citigroup Inc (NYSE: C)
MF Global Ltd (NYSE: MF)
E*Trade Financial Corp (NASDAQ: ETFC)
Sirius Satellite Radio Inc (NASDAQ: SIRI)
Bank of America (NYSE: BAC)
Washington Mutual Inc (NYSE: WM)
Thornburg Mortgage Inc. (NYSE: TMA)
Alcatel-Lucent (NYSE: ALU)
Sprint Nextel Corp. (NYSE: S)
Intel Corp. (NASDAQ: INTC)

Continue reading Don't invest in what you know: a dozen disaster blue chips

My take on the Visa IPO

Recently, I've been getting too many emails and comments on my blog asking what I think of the Visa (NYSE: V) IPO. Listen, every single long-term investor should be interested in it. Until today, it's been one of the few remaining marquee companies around unavailable to our stock-obsessed society and aside from litigation risk, the company's got everything going for it.

It's got strong sales and transaction growth and more importantly, like rival MasterCard (NYSE: MA), it's immune to the current credit crunch, passing off cardholder debts to the banks. So, when others are sweating potentially catastrophic events like The Bear Stearns Companies Inc. (NYSE: BSC) and the potential collapse of other brokers like Lehman Brothers Holdings (NYSE: LEH), scaring everyone half to death, these guys are sitting pretty. This is also the main reason why MasterCard's stock has handily outperformed rivals American Express (NYSE: AXP) and Discover Financial Services (NYSE: DFS), two companies -- and stocks -- that are certainly feeling that credit pain.

There'll be plenty of other articles dissecting the company, but I find that in rare situations like these, it's best to think in terms of the general picture. Not because it's the right way to invest, but because it's the way most people do. And those most people are the ones who can really influence the stock price here.

Continue reading My take on the Visa IPO

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Symbol Lookup
IndexesChangePrice
DJIA-5.8612,986.80
NASDAQ-4.882,528.85
S&P 500+1.781,425.35

Last updated: May 16, 2008: 04:21 PM

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