Wednesday Morning, May 23rd
Dow Jones
News
:
Hewlett-Packard (HPQ) said Wednesday it won a seven-year contract worth up to $5.6 billion by the U.S. National Aeronautics and Space Administration. The company said it'll provide "a wide range of technology as needed by U.S. federal government agencies." - MarketWatch
Alcan recommended that shareholders reject Alcoa's $27.41 billion takeover bid, calling the offer for the Canadian aluminum maker inadequate. - WSJ
Two surveys of first quarter server sales put IBM (IBM) and Hewlett-Packard (HPQ) as the sales leaders worldwide, according to WSJ.
The New York Times writes that Intel (INTC) is forming a flash memory joint venture with ST Micro (STM).
Breakouts the Ice Man may trade:
AMG - 126
OIIM - 11
CYNO - 33
VAR - 60
Regular Trades the Ice Man may consider:
PSPT - 12.70
MFLX - 18
LCC - Potential Bottom
SAI - 19.26
OMRI - 33.65
NVT - 38
CX - 36
AHM - 22 = 24.70 Gap
JDSU - 13.30
ARUN - 14.50
KBH - 46.65
HOV - 25.85
SYN - 20.50 = 23 Gap
GE - 37.58
GPIC - 12 Bid
Depressed stocks the Ice Man may buy or short to the gap:
CLB - 89
DO - 88.90
RIG - 93.40 Gap
BNI - 90.60
YZC - 55 Gap
Extended Shorts:
GVA - 70
JRJC - 9
Dollar Man Ideas:
BMD - 3.15
MED - 7.15
PWER - 3.90
COSI - 5
TWTI - 6.16 * Best Bet
LVLT - 5.80 Bid - 6.18 Gap
SRFDF - 1.22
SIR - 2.36 * Best Bet
STEC - 6.32 Bid
Cramer's Comments:
Bullish: CAT, C, KO, XOM, HAL, NBR, MMR, MA;
Bearish: EMU;
Richard the Breakout Buyer Video Summary:
Break out buy watch list for short term gains May 23 includes: OIIM, EXBD, USG, PLXS, GILD, ATHR ,CAL, ARIA.
Several candidates for break out or pullback plays for at least short term gains by buying the break out on good volume and selling at least some on the first day.
www.stocktiger.com
Swing Man Market Recap:
In my recent newsletters I’ve been discussing the potential for the ‘general’ market to put in a major top very soon because the market is now in the very final stages of its 5th wave rally.
Historically, holidays have played a key role in trend reversals. As Memorial Day approaches the timing for a top would appear appropriate. The target of 1530 has been hit for the S&P 500, however I also have a secondary target of 1550.
Peter Oppenheimer, the head of the EMEA strategy and research for Goldman Sachs, predicts a 20 year bull market for equities in Europe. With that kind of talk, it’s probably time for a correction.
In the last update, I stated that oil/gas stocks are starting to look toppy because of the extreme levels in the BPENER. I also stated that DUG, which is the double inverse ETF for this sector would be an easy way to play a correction in this sector. Well today DUG closed up on very strong volume! Positive divergence is developing via the MACD; all we need is for the MACD to cross back up (black line to cross above the red line) in order to confirm a trend reversal and a positive divergence. Again, realize that this still might not be the bottom, therefore set appropriate stops and you can always scale in instead of buying a big position at one time. Technically, DUG also needs to get above the 20 MA, and break the downtrend line over the DUG/S&P ratio at the top of the chart.
Today the pullback in crude oil caused a rally in the Airline Stocks. Remember from my weekend newsletter that I covered the Airline sector as one to watch because it was in a bullish falling wedge. The XAL still remains within the falling wedge pattern however we need to keep an eye on it. My favorite Airline stocks are CAL, AMR, JBLU
The Nasdaq once again outperformed relative to the Dow and S&P 500 just like yesterday and I think it still has the potential to push higher. However, realize that negative divergence is now beginning to form. As you can see, the Nasdaq is now in wave v of the 5th wave rally, which means this is the last uptrend of this pattern.
Again, I think a top is close, but the market will probably hold up okay for the rest of the week at least. Also, the commercial traders are still ‘net long’ this market, and I would like to see that reverse as well.
Have a great evening
Also visit me at:
http://www.breakpointtrades.com/
________________
CNBC Fast Money Review:
1. The Top 3
Is The Worst Over?
Adami: Loves TOL. Stop at $27.75.
Najarian: Likes SPF. Investors buying June 22, June 25, July 25 calls.
Housing is near bottom.
Bolling: Housing not at bottom. Homebuilders down 9% ytd.
Macke: Housing will go higher.
Wet Hot American Summer
Bolling: Higher natural gas prices. Own natural gas companies.
No Longer Stocks of Steel?
Bolling: Summer will see downturn in steel. Could see buying opportunity later. PKX, CLF doing well.
Adami: Just seasonal downturn.
2. S&P 500 Watch: What Got Us Here?
Bolling: Tobacco companies going higher.
ADami: RAI, MO both great stocks.
Najarian: RAI is a buy.
Macke: RAI could triple.
3. Take Your Position
Getting Ahead of Gap
Macke: No turnaround happening at GPS, but don't short stock.
3. Word on the Street
Kerkorian Ups Ante
Najarian: Likes LVS.
Pain In The Pump
Bolling: Recommends HES, WNR, VLO, XOM. Companies will continue to print money.
A Super Value?
Macke: Buy SVU, KR, SWY on dips.
Glaxo's Drug Problem
Adami: GSK is compelling on valuations.
Medtronic Earnings
Najarian: MDT call options did well. Watch STI options activity on takeover rumors.
China visit Continues
Bolling: China is smart making deals with Iran and Venezuela unlike US. $100 oil is coming.
Just Did It!
Macke: NKE opening stores with FL. Smart move.
4. Face 2 FAce
Stephanie from OH - Specialty retailers?
Macke: Likes ZUMZ, GYMB as trades. Also go long HD as investment.
Susan from WA - CCJ, BHP?
Bolling: Nuclear is way to go. Take half off.
Christi from NY - Energy stocks?
Adami: Likes CVX, VLO on valuations, FLR.
5. Streethearts
Bolling: TMO is a buy.
Adami: TMO is a buy.
Najarian: TMO is a buy.
6. Final Trade
Macke: HD is a buy. Hurricane play.
Najarian: SPF is a buy.
Adami: SVU is a buy.
Bolling: HES is a buy.
______________
Breaking
News
:
Omnicell Inc. (OMCL) said that it has priced an underwritten public offering of 3.9 million shares at $21.50 a share. Omnicell has granted the underwriters a 30-day option to purchase up to an additional 585,000 shares to cover any over-allotments. Merrill Lynch & Co. is the sole book-running manager of this offering. - MarketWatch
The head of Halliburton (HAL) who has relocated to Dubai, has suggested that Middle East interests take a substantial share of the company as it build its business there, writes WSJ.
The WSJ writes that Medtronic (MDT) has a 10% increase in earnings due largely to implantable defibrillators sales.
M&A Activity:
Crescent Real Estate Equities Co. (CEI), the real-estate investment vehicle founded by investor Richard Rainwater, agreed to be acquired by a unit of Morgan Stanley (MS) for about $6.5 billion including debt, a small premium to its trading price. - WSJ
BHP Billiton is in early-stage talks with Alcan as the Montreal aluminum producer tries to fend off an unwanted $27 billion offer from Alcoa, according to a published report. - MarketWatch
Reuters also reports that California savings & loan Fremont General (FMT) has arranged to sell part of its troubled loan portfolio, lifting the company's shares.
FT writes that Dow Jones (DJ) founding Bancroft family will meet to discuss an offer from News Corp (NWS).
Barron's writes that Dell (DELL) may partner with a large retail to improve consumer sales.
IPO Central:
Pricing:
Cambridge, Mass.-based biopharma Sirtris Pharmaceuticals (SIRT) said it's pricing its initial public offering of 6 million shares at $10 each. Its granted underwriters an option to buy another 900,000 shares. - MarketWatch
B&G Foods Inc. (BGS) said it priced 13.9 million shares of Class A common stock at $13 a share for proceeds of $181 million in its initial public offering on Wednesday. The company priced in the middle of this $12-$14 price range. B&G Foods' enhanced income securities already trade on the American Stock Exchange. The Parsippany, N.J. firm makes hot cereals, jams, jellies and fruit spreads, canned meats and beans, spices, seasonings, marinades, hot sauces, wine vinegar, maple syrup, molasses, salad dressings, Mexican-style sauces, taco shells and kits, salsas, pickles and peppers and other specialty food products. - MarketWatch
Helicos BioSciences Corp. on Wednesday cut the estimated price range of its upcoming initial public offering to $10-$11 a share from $13-$15 a share. With 5.4 million shares in the IPO, the company plans to raised about $57 million with lead underwriter UBS.
Economic Data:
10:30 Crude Inventories
Recent Stock Split Announcements:
On May 16, Fomento Economico Mexicano, S.A.B. de C.V. (NYSE:FMX) announced that its board of directors approved a 3:1 stock split to be distributed on May 30, 2007.
On May 17, Yum! Brands, Inc. (NYSE:YUM) announced that its board of directors approved a 2:1 stock split to be distributed on June 26, 2007.
On May 17, Stericycle, Inc. (Nasdaq:SRCL) announced that its board of directors approved a 2:1 stock split to be payable on May 31, 2007.
On May 18, Buffalo Wild Wings, Inc. (Nasdaq:BWLD) announced that its board of directors approved a 2:1 stock split to be distributed on or about June 15, 2007.
On May 21, Benihana, Inc. (Nasdaq:BNHNA) announced that its board of directors approved a 3:2 stock split to be payable on June 15, 2007.
On May 21, Benihana, Inc. (Nasdaq:BNHN) announced that its board of directors approved a 3:2 stock split to be payable on June 15, 2007.
On May 22, Monro Muffler Brake, Inc. (Nasdaq:MNRO) announced that its board of directors approved a 3:2 stock split pending shareholder approval on August 7, 2007.
On May 22, Omnicom Group, Inc. (NYSE:OMC) announced that its board of directors approved a 2:1 stock split to be distributed on June 25, 2007.
Stock Splits Which Become Effective In The Next Several Trading Days.
Ex-Date Split Symbol Company
5/23 3:2 BPO Brookfield Properties Corp.
5/29 2:1 GIL Gildan Activewear Inc.
5/29 3:2 ATLS Atlas America, Inc.
5/30 3:1 POT Potash Corp of Saskatchewan
5/30 2:1 TSO Tesoro Corporation
5/31 3:1 FMX Fomento Economico Mexicano
5/31 3:2 VSEA Varian Semiconductor Equipment
Upgrades and Downgrades by Sector:
Advertising
VCLK ValueClick Credit Suisse Downgraded from Outperform to Neutral $32
Beverages
WBD Wimm-Bill-Dann Foods Citigroup Upgraded from Hold to Buy
Biotech
CYPB Cypress Biosci CIBC Wrld Mkts Upgraded from Sector Per to Sector Outper $26
CYPB Cypress Biosci Jefferies & Co Price Target Raised Buy $14 to $30
Business Services
FIS Fidelity Nat'l Info Svcs Sun Trust Rbsn Hum Downgraded from Buy to Neutral
MMS MAXIMUS Stifel Nicolaus Downgraded from Buy to Hold
TRMM TRM Friedman Billings Cut Price Target Outperform $5 to $3.50
Chemicals
DOW Dow Chemical Credit Suisse Downgraded from Outperform to Neutral $50
GGC Georgia Gulf Credit Suisse Downgraded from Neutral to Underperform $14
NCX NOVA Chemicals Credit Suisse Downgraded from Outperform to Neutral $33
WLK Westlake Chemical Credit Suisse Downgraded from Outperform to Neutral $27
Computer Hardware
SUNW Sun Microsystems Matrix Research Upgraded from Sell to Hold
IMN Imation Needham & Co Price Target Raised Buy $41 to $43
Computer Software
MFE McAfee UBS Price Target Raised Buy $35 to $41
Conglomerate
TXT Textron Prudential Price Target Raised Neutral $103 to $110
Construction
BECN Beacon Roofing Supply Needham & Co Initiated at Buy $22
Educational Services
APOL Apollo Group Prudential Price Target Raised Neutral $48 to $50
Environmental Prod
MPR Met-Pro Corp Brean Murray Downgraded from Buy to Hold
Foods
UNFI Utd Nat Foods UBS Cut Price Target Buy $44 to $43
Gaming Equipment
CKNN Cash Systems Morgan Joseph Initiated at Buy $9
Gold and Silver Mining
AEM Agnico-Eagle Mines HSBC Securities Upgraded from Neutral to Overweight
AU Anglogold HSBC Securities Upgraded from Neutral to Overweight
RGLD Royal Gold HSBC Securities Upgraded from Neutral to Overweight
BVN Buenaventura SA HSBC Securities Downgraded from Overweight to Neutral
HMY Harmony Gold HSBC Securities Downgraded from Overweight to Neutral
IAG IAMGOLD HSBC Securities Downgraded from Neutral to Underweight $9 to $7
Healthcare
FRX Forest Labs HSBC Securities Upgraded from Underweight to Neutral $47 to $58
FRX Forest Labs First Albany Upgraded from Neutral to Strong Buy
FRX Forest Labs UBS Price Target Raised Neutral $55 to $56
ARRY Array Biopharma JP Morgan Initiated at Overweight
Healthcare Equipment
MDT Medtronic Piper Jaffray Upgraded from Market Perform to Outperform
ELGX Endologix Dawson James Initiated at Buy $5.50
Heavy Machinery
AG AGCO Corp UBS Downgraded from Neutral to Reduce
Insurance
AFSI Amtrust Financial Friedman Billings Price Target Raised Outperform $12.50 to $16
AOC Aon Keefe Bruyette Downgraded from Outperform to Mkt Perform
MET MetLife UBS Downgraded from Buy to Neutral
NFS Nationwide UBS Downgraded from Buy to Neutral
PNX The Phoenix Cos UBS Downgraded from Buy to Neutral
RGA Reinsurance Grp UBS Downgraded from Buy to Neutral
WSH Willis Group Keefe Bruyette Downgraded from Outperform to Mkt Perform
Manufacturing
DESC Distributed Energy Merriman Curhan Ford Dropped Coverage
CROX Crocs Nollenberger Capital Price Target Raised Buy $73 to $96
Mining - Steel & Iron
RS Reliance Steel UBS Price Target Raised Buy $66 to $70
Oil and Gas
BGH Buckeye GP Hldgs Deutsche Securities Upgraded from Hold to Buy $28
CLMT Calumet Specialty Prod Deutsche Securities Upgraded from Hold to Buy $58
COP ConocoPhillips Bernstein Upgraded from Mkt Perform to Outperform
RDS.B Royal Dutch Shell B Bernstein Upgraded from Mkt Perform to Outperform
BRS Bristow Group Oppenheimer Price Target Raised Buy $45 to $50
BBEP Breitburn Energy Deutsche Securities Downgraded from Buy to Hold $36
CEO CNOOC Ltd Bear Stearns Downgraded from Outperform to Peer Perform
CVX Chevron Bernstein Downgraded from Outperform to Mkt Perform
MMP Magellan Midstream Deutsche Securities Downgraded from Buy to Hold $43
NS NuStar Energy Deutsche Securities Downgraded from Buy to Hold $66
Publishing
MHP McGraw-Hill Lehman Brothers Initiated at Overweight
Retail Trade
SPLS Staples Soleil Upgraded from Hold to Buy $31
AEO American Eagle Friedman Billings Price Target Raised Mkt Perform $30 to $33
GMTN Gander Mountain Friedman Billings Price Target Raised Mkt Perform $11 to $12
BFLY Bluefly Merriman Curhan Ford Initiated at Neutral
AZO AutoZone Citigroup Downgraded from Buy to Hold
NILE Blue Nile Lehman Brothers Downgraded from Overweight to Equal-weight
AEO American Eagle HSBC Securities Cut Price Target Neutral $34 to $31
Semiconductors
AATI Advanced Analog Tech Needham & Co Upgraded from Hold to Buy $11
AATI Advanced Analogic Tch Jefferies & Co Price Target Raised Buy $9 to $12
ADI Analog Devices Credit Suisse Downgraded from Outperform to Neutral
ADI Analog Devices JP Morgan Downgraded from Overweight to Neutral
AMD Advanced Micro Matrix Research Downgraded from Hold to Strong Sell
ISIL Intersil Credit Suisse Downgraded from Outperform to Neutral
LLTC Linear Tech Credit Suisse Downgraded from Outperform to Neutral
ADI Analog Devices Banc of America Sec Cut Price Target Buy $48 to $46
Telecommunications
LEAP Leap Wireless Robert W. Baird Initiated at Outperform $103
PCS MetroPCS Robert W. Baird Initiated at Outperform $45
Transportation
TNP Tsakos Energy Jefferies & Co Price Target Raised Buy $68 to $85
Utilities
AEP American Electric Lehman Brothers Upgraded from Equal-weight to Overweight
COMV Comverge Cowen & Co Initiated at Outperform
COMV Comverge RBC Capital Mkts Initiated at Outperform $28
PNW Pinnacle West Lehman Brothers Downgraded from Equal-weight to Underweight
XEL Xcel Energy Lehman Brothers Downgraded from Equal-weight to Underweight
_______________
Bullish Perspective:
The End is Near Talk
Everyday I hear the you've been warned talk from CNBC to Hong Kong's rich and powerful. Yet equity markets still showing internal strength. Take HSI index for example, a cup and handle. There are layers of supports as safety net. The bukk is clearly in control. And in the US, the Dow, AMEX and NASDAQ's new highs vs. new lows are not flashing immediate trouble. If Joe Granville was reading the current market, I bet he would say the surprise is yet to come on the upside. As Joe used to say, market ends when liquidity runs dry!
HK:1804580 Hong Kong HSI-HANG SENG (SEHK-HK) Delayed quote data 5/23/2007 4:56 PM
Last:
20798.97 Change:
-44.95 Open:
20838.36 High:
20888.14 Low:
20767.68 Volume:
n/a
Percent Change:
-0.22% Yield:
n/a P/E Ratio:
n/a 52 Week Range:
15204.86 to 21088.86
Both the HK and US listed Guangshen Railway are showing a bull flag is being formed.
HK: 525 Guangshen Railway (SEHK-HK) Delayed quote data 5/23/2007 4:01 PM
Last:
6.52 Change:
+0.08 Open:
6.48 High:
6.64 Low:
6.48 Volume:
9,021,000
Percent Change:
+1.24% Yield:
n/a P/E Ratio:
46.57 52 Week Range:
2.275 to 7.24
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