Thursday, January 31, 2008


Just released great earnings, stock is up 11% after hours.

Revenue: $135.6 million vs $125.66 expected
EPS: $0.37 vs $0.35 expected

Guidance for next quarter:
Revenue: $136 million vs $120.66 expected
EPS: $0.30 vs $0.29 expected

This gives SWIR a trailing PE of 14. The stock has fallen to 15 from its highs of 28, so this stock might have room to run! It is at 16.5 in after hours.


Nasdaq seems to be showing some bullish signs. There seems to be resistance at 45.5 which is the August lows and the 400 DMA. If we make it solidly above this point and hold (46.0) then this will have upwards momentum in the short term. Resistance is around 49 which is the 200 DMA and the lows of Nov.

EWZ Update

Lets look at the development of EWZ.

It has bounced from support at 70 and 72.5. Now we see that there will be resistance at the 100 DMA. If EWZ can manage to pass 78 in the next few trading days, then we can approach all time highs very soon after!

Friday, January 25, 2008

EWZ, QQQQ short update

Here is the performance of the half long EWZ, half short QQQQ strategy since my post from last week.

Ignoring the little spike in EWZ the last minute of trading, EWZ is flat while PSQ is up about 4%, this gives us an average gain of 2% for the week. Not bad considering that this is a very conservative play in the market. If you skewed more toward being short QQQQ, then your performance would have been better.

Thursday, January 24, 2008

Oil Refineries

The traders on Fast Money were talking about how refineries are very undervalued. Here are charts showing the performance of the refineries starting from January.


Year long rally in 2005.


Following the huge rally in 2005, only a slight rally in 2006 starting in February.
WNR: +30%
MRO: +20%


Huge performance on all refineries. The top performers are:
WNR: +180%
TSO: +80%
VLO: +50%

WNR had the biggest and fall last year. Betting on this stock might prove to be very profitable.

Here are the debt to equity ratios for the stocks mentioned. Beware WNR has a lot of debt.
WNR: 1.64
TSO: 0.49
VLO: 0.36
MRO: 0.34
COP: 0.34
SUN: 0.70

EWZ Update

EWZ is at a very critical point. It is barely above the 200 day moving average and below the support/resistance of 70. Will it recover above 70 tomorrow or will it break all support and move below 68?

POT finding support

POT is finding support at the 100 day moving average. Is it time for TEMPORARY reversal in the agriculture stocks?

Wednesday, January 23, 2008

Holy Grail

Read here

Today's action provided a lot of examples during the reversal.

RIG, MDR update

RIG is bullishly holding the 200 day moving average.

MDR is holding the 300 day moving average. If it can make it above the 200 day moving average, I might dabble in the call options.

Earnings and reactions

Here are a whole bunch of earning's headlines and reactions
Headline Market Change After Hours Change
Ebay's Ailing Outlook 6.60% -5.50%
Symantec beats estimates with third-quarter results 1.60% 9%
Western Digital Fiscal 2Q Profit Soars 3.70% 5.25%
Netflix beats estimates with higher Q4 profit 6.50% -1%
Capital One 4Q Profit Falls 42 Percent 11% -0.70%
Citrix Systems Q4 earnings rise -2.60% -3.20%
Netflix beats estimates with higher Q4 profit 6.50% -1%
QLogic gives Q4 outlook 3.80% 1.30%
Noble Corp. profit jumps 74% on strong drilling demand 2% 1.30%
THQ Cuts 3Q Profit Outlook; Shares Fall 2.80% -8%
Qualcomm 1Q Profit Jumps 18 Percent -0.80% 7.30%
F5 Sees Adjusted 2Q EPS Above Street -1.10% 19%
Polycom beats by $0.03 -1.30% 7.80%

For the most part, it looks like tomorrow will be a good day.

Tuesday, January 22, 2008


The investment seeks to replicate, net of expenses, the ISE Chindia Index. The fund will invest at least 90% of assets in securities that comprise the index. The index consists of companies that are domiciled in either India or China and whose ADRs are listed on a U.S. securities exchange.

CompanySymbol% Assets

A retest of the 20 level is expected. I would stay away from the stock while it consolidates in the 20-24 range.

PTR - Head and Shoulders

PetroChina Company Limited, together with its subsidiaries, engages in petroleum and natural gas related activities in the People's Republic of China. It operates in four segments: Exploration and Production, Refining and Marketing, Chemicals and Marketing, and Natural Gas and Pipeline.

This is a nice head and shoulder if I have every seen one. The high was at 266, now we are at 140, thats almost a 50% loss!!! And we aren't even at the lows of the head and shoulder formation. The pattern predicts the stock will hit 100 soon, but given the downside action in the stock the last few months, this could be very speculative.

EWZ Update

EWZ took a hit today along with the rest of the market. It failed the the 70 support and fell below the 200 day moving average intra day. However it closed at 69.6 which gives it some hope. If the stock fails to move above 70 and hold, it might have more downside coming. The next few days are critical for EWZ and the whole market!

UPDATE: In mid August EWZ provided a great buying opportunity. Could today's action be providing us with the same opportunity? Or are we headed more towards a sideway action like in mid 2006.

Friday, January 18, 2008


I bought Rig a while ago and have now come to regret it.

Transocean, Inc. operates as an offshore drilling contractor and a provider of drilling management services worldwide. It contracts drilling rigs, related equipment, and work crews primarily on dayrate basis to drill oil and gas wells with a focus on deepwater and harsh environment drilling services.

So they operate in what is supposed to be the most profitable area of drilling, deepwater drilling. Almost everyone loves this stock, including Cramer. They recently merged with GSF, GlobalSantaFe, which was also a contract driller, giving them bigger stake in the drilling area.

Now lets look at my action and see where I went wrong.

I bought RIG thinking that the selling was overdone and we would reach support very soon at the trendline or at the previous highs of 140. However on the 15th it all came down. That SHOULD have been my signal to sell and possibly go short. Ever since then it has broken the 100 DMA and is approaching the 200 DMA.

My Mistakes:
1. Buying the stock BEFORE the trend was tested.
2. Buying the stock in a weak market, hoping for a bounce.

Now the decision is, what to do with the stock?

Despite all the bad, RIG is still a great company. They report earnings on February 20, when they are expected to earn 2.55. Oil is still high, and exploration should still be growing. The stock managed to make it above its 200 DMA once again today despite overall market weakness. If the market manages to have a recovery soon, I will be able to unload half my position so as to minimize my overall long position in the market.

Next post will be about another oil company MDR.


I want to analyze the EWZ etf for myself and my friend Boris.

EWZ: ETF that corresponds generally to the price and yield performance of publicly traded securities in the Brazilian market, as measured by the MSCI Brazil index. The fund normally invests at least 95% of assets in the securities of its underlying index and in ADRs based on the securities in its underlying index.

CompanySymbol% Assets
Banco Itau Holding FinanceiraN/A4.99
Companhia Siderurgica NacionalN/A2.33
Petroleo BrasileiroN/A11.49
Petroleo Brasileiro Sa PetrobrasN/A13.61
Unibanco-Uniao DeN/A4.28
Vale Overseas Limited ADRN/A10.37

Recent performance (9 month, daily):

We see that EWZ has SIGNIFICANTLY outperformed the US indexes. However, it is very close to key support. If support holds then hopefully it will continue to outperform the US indexes. I was recommending that Boris have a hedged position in EWZ by also going short the QQQQ. You can do this buy having a 50/50 position in EWZ/PSQ. You can actually do this better with an ultra short QID but the allocations would need to differ for this. If you want to be half long EWZ and half short QQQQ the best mixture would be:

EWZ: 66.6%
QID: 33.3%

This way since QID is ultra, a 1% move in QQQQ will result in a 2% move in QID, which will balance a 1% move in EWZ.
However, if you want to be more bearish you could also go for a 60%, 40% mix.
Here is a look of the recent performance comparing EWS with PSQ, if u had a 50/50 mix (or 66.6/33.3 EWZ/QID mix) your average gain would be the average of the two gains.

5 Days:


10 Days:


1 Month:


3 Month:


Note: these are all approximate gains.