Eastern Europe and All That Jazz
10/06/2006
Until October 11th
I have just returned from Hungary where I talked about ADVFN (charting and prices). And what happens? The riots there stop and the Dow hits an all time record high. As I have said last week, the rises do not have immense strength and I would put my money…no…I would place a spread bet on the Dow falling past below 11600 in the next month. The FSTE 100 as I mentioned last week, to me still looks week.
Examining the momentum indicators of MACD and Stochastics that I analyse, the FTSE is a tough one to call this week and I do not want to take a direction on it. Sometimes, making a profit is about not taking a view.
The Dow is being led by oil prices. And as they fall below the relatively high levels they have been at, then they are a more important factor on the market than anything else. The problem is, if you want to trade or bet on the price of oil it is better to do that directly than via the Dow of course.
Examining the Dogs of the Dow: stocks of the Dow Jones with the highest dividend yield, lowest price/earnings ratio and lowest price, which tend to outperform over the longer term includes quite a few technology companies: Hewlett-Packard, Microsoft, Intel, Verizon.
The stocks showing the strongest short term bullish momentum are: Admiral, 4imprint, Austin Reed, Morrison, J Sainsbury.
(Email me if you would like the presentation on the stocks I like for 2006, which I broadcast on BBC2 - the picks in the past two years produced a 83% compound return.)
Value-Growth
For a 12 month outlook, I look for stocks based on company growth criteria (eg revenue and profit growth) and on valuation criteria that I have developed over the years (incorporating price earnings growth). I then datamine for outstanding names. Currently on my radar are: Asfare, Waterline, Dairy Crest.
Remember I am targeting about 20-25% with the value growth criteria. Last year it produced 33% return.
On my momentum value search for stocks based on momentum (eg price moves over the 2 week and 6 month periods) as well as valuation criteria (such as price to earnings growth, dividend yields), names showing up there include: C&C, International Power, Telford Homes.
Crazy Small Stock
These are high risk volatile stocks which could move sharply higher or move sharply lower in my radar are: Antisoma, Trafficmaster.
Also, if you would like a free multi-media CDROM on 'Investing Better' for ADVFN readers, which covers spreadbetting, CFD trading and momentum indicators like the MACD, posted to you then drop me an email with your postal address to alpesh.patel@tradermind.com.
Spreadbetters
Spreadbetters and futures traders often look at hard and soft commodities. Here's my quick take on the action for the week ahead:
- Oil: Sideways to down
- Copper: Down
- Gold: Down
- £/$: Sideways
- Dow: Sideways
- FTSE 100: Down
- Soyabean Oil: Down
Market Data:
Top 3 FTSE 100 best performers in past month have been: Hanson, Carnival, Next (Up on average 17%)
Top 3 FTSE 250 best performers in past month have been: Stanley Leisure, Laing, Grainger (up on average 35%)
Top 3 best sectors in past month have been: FTSE 350 Construction, FTSE 350 Personal Goods and FTSE 350 Fixed Line Telecoms (up on average 10%)
FTSE 100 is at a level it first reached in: 1998
The Dow is at a new all time high
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