Mike's Top Picks!

I've got a long term stake in it and here is why.

There are certain IPOs that will be setup to do well. This is a theory that I developed and it sometimes works. This is the magic formula.

It first starts with the underwriter. Make sure the underwriter is one of the big brokers like Goldman or JP. In this case its JP.

Then it starts with market attitude towards a given sector. So with this Chinese media/marketing sector we do have a lot of bullish attitude out there.

Then it starts with a good earnings call and at least two prime analysts bulling it up. Then observe what happens to the price, formations and volume after they start bulling it up. It usually takes a month or two for the analysts to hone in on it.

Its sometimes easier for an institution to make money by pumping an IPO then it is for an existing stock. Thats because there is no overhead supply or resistance that will keep it down.

Im going to go through all the recent IPOs and scan for these qualities.

I wanted to say something about the solar sector. This sector jumps around on a daily basis enough for one to either make or lose ten grand a day in one sitting.

I was smacking myself around wondering how my technical analysis failed and how I didnt predict this last fall.

Well, thats because I failed to look at the overall sector. I found the following ETF that you can use technical analysis on. When this ETF does well, then the entire solar sector does well.

Lets take Evergreen solar for example. Going back on the charts, we can see this thing move up and down in 40% spurts almost every two weeks in 2006. Evergreen is a good trading stock where you can either make or lose thousands in one trading day. If you knew how to game it, then you could make that wild return on just evergreen solar.

http://stockcharts.com/h-sc/ui?s=PBW&p=D&b=3&g=0&id=p28895309977

So I looked at this ETF which contains many different alternative energy stocks. This etf will predict when its time to surf the solars. Look at that massive head and shoulders in early 2006 and then a pattern completion followed by a rounded bottom. Now look at "the hammer" and the price bouncing off the 50 day moving average at the end.

I think we may have something here to tame our wild solar beast.

I dont think the solar sector is about fundamentals, but attitude. If the attitude is strong, then the solar sector will heat up and become ripe. If the attitude is weak, then the solar sector will meltdown like Chernobyl.

This PBW etf seems perfect for gaming our solar basket. I think the sector goes up from here. That rounded bottom after the h/s completion is very telling. The PBW will go to 23-24 in the future. Notice how the solars went crazy from January to March when the PBW was up just 3 points. Imagine if we had that monster h/s like we did in early 2006 on the PBW.

Notice how the ESLR chart looks just like the PBW chart with some differences.
 
Now look at this one.

The indexes both started around the same levels when they started their runs. The charts look stunningly similiar.

I say we have about 4-6 months left until the China market goes kaboom. We are now probably in the 4th quarter of December 2000.

This might be the catalyst for the next correction which I predict will take place in Q3/Q4.
 

Attachments

Check out our Solar plays. They had sold off the last few days leading up to the First Solar earnings release. The release, though, was very bullish. Beat earnings. Street expected 00 and they pulled off 7 cents.

These stocks also follow the R2K closely. The R2k was in a state of flux and so these stocks followed it.

They all should be buys at these levels. Long term Im bullish on the entire solar sector. Were still in stage 2.
 
MU is finally starting to move and faster then I thought. I was frustrated when the price went into this pattern, thought it would take several days to break.

However, I think it will be sooner then later. A break above 12.25 is what we need to snap the neckline of this reverse head and shoulders.

The big problem is that the float on this one is so huge....its a huge boat and it needs a lot of institutional interest to swing it to the upside.
 
Quote from michaelscott:

MU is finally starting to move and faster then I thought. I was frustrated when the price went into this pattern, thought it would take several days to break.

However, I think it will be sooner then later. A break above 12.25 is what we need to snap the neckline of this reverse head and shoulders.

The big problem is that the float on this one is so huge....its a huge boat and it needs a lot of institutional interest to swing it to the upside.
More...

Yes it does...I've seen some 120k blocks bought or sold and nothing, just moves a little. It's more of an institutional game anyway I think....the stock will move .05 on nothing and then 10M shares will trade in a .01 range. :D
 
It is now time to get into Marvell. It appears that the options news leaked the last few days and we saw the price being generously bid up.

We have to remember a few things about Marvell which are:

1) Previously it traded in the 30s on wildly high P/E ratios.
2) Its one of the few stocks that has not performed in the last year.
3) The reason for the underperformance is the options scandal, chip gluts, and the intel plant acquisition.
4) TXN says the chip glut is about over, the options scandal has finally reached resolution and the intel plant integration is finally taking place.

I would say that its time to get back into Marvell and ride it back up. The problems have been resolved and I believe it will trade up into the 20s-30s in 6-12 months.
 
Oil has snapped the neckline on the $WTIC which means back to the 50s in the short term. It is now time to get back into the airlines.

The nature of airlines is very risky. My pick is JBLU, but the wise money will choose 3 airlines. AMR, JBLU and UAUA.

The relationship between oil and airlines is obvious. Set tight stops here.
 
AIG reports this week. If the price snaps through the resistance, then we have a shot for 100. My theory is that eventually there will be so much demand for the stock that it will somehow over-ride Hank's interest in the company. The P/E has never been this low and the EPS has never been so high. I have reason to believe that the EPS will be even higher and greater then analyst expectations this time around.

I'll be monitoring the situation intensely. Hank has 300,000,000 shares of AIG that he controls. This is a situation of not fundamentals, but one where a major shareholder is purposely holding the stock price down.

If it can snap through 70, then we have a stock here with 40% up room. Would you buy a 7 dollar stock if you knew it was going to 10? This is a stock that will go to 100 if the street can over-ride the major shareholder. It can be done, there just needs to be more institutional interest.
 
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