MoneyMiser Picks

After making 25% on my shares of APPL and FCX, I'm selling them all. I got out of Apple before the close Monday, and I'm sellng my Freeport on the open Tuesday.

Why sell Apple? Too much hype over 3G iPhone has driven the price up quickly. I'm taking advantage of that speculation to cash in. I expect Apple to trade back down to an entry point of 125-130 in a month or so, and then I may think about getting back in. Jeff Macke also made a good point on CNBC's Fast Money, when he said (paraphrasing) a little pullback in Apple would be good for all of us.

Why sell FCX? Look at the technicals. A 6 month chart shows FCX is nearing or at a quadrouple top just below $110. Now some may interpret this as a potential breakout signal. To those folks, I say look at Monday's price action. FCX open spiked a few % above it's Friday close, and it became a slow profit-taking sell off. If the 6 month chart technicals hold (barring some outside event), I think FCX will churn for a while in the range of $92-108. I'm not certain what will cause a breakout higher, aside from massive inflation, devaluation of the U.S. dollar, or a world copper shortage. All of the good news is probably priced into FCX stock price for the near term. I think we'll see a slow pull back, maybe to 100 within the next 2 weeks.

I wish I could sit on the sidelines with a bunch of cash right here, but the rules of the game don't allow me to do so.

So I bought into two sectors that saw mostly a slight sell-off Monday. Solar and Coal.

Solar I targeted LDK, ESLR, SOLF, and AMAT. With Applied Materials I added to an existing small position that's so far been a loser. I think with oil increasingly hovering around $110,a nd realistically threatening to break through soon, Solar could be set to breakout. Both LDK and SOLF just reported big, good news. ESLR has seen positive momentum in the options market, according to Pete Najarian on CNBC's Fast Money. Both ESLR and AMAT have not received the recent momentum surge though that other solar names got last week. So those 2 are more of a laggard play.

In the coal names, ACI saw a sell off today. I think it was just slight trader profit taking, and Arch Coal should rebound on the dip. Then there's ICO. Carter Worth made a strong technical argument for ICO getting ready to make a breakout on a taped segment on Fast Money Monday. Since this is a game, it's worth taking a $10,000 flyer on. Not much risk, and one can further cut that risk with a tight stop at $6 from the current price of just under $7.

YUM continues to be a solid performer for me. Up 12% since I bought the stock. International growth and sales staying strong. China loves the Colonel's chicken. Who can blame them?

Baker-Hughes (BHI) finally starting to perform like I had hoped. I think it's underperfoming Schlumberge though, so I may turn out to be wrong on my valuation momentum guess.

Then there are the stocks that should be moving but keep falling for me.

Oh Tesoro, why oh why won't you rise? Gas prices rising, Crack spread narrowing, Summer driving season rapidly approaching, a low P/E ratio, what else do I have to say? If this were for the long term I'd be adding up to about $35 per share then holding on till it got back up to $50+. I prefer TSO over VLO for the low P/E, and larger gains possible from a big fast move in this contest.

Also wrong so far, my bet for a big rebound by Humana.

Stocks that are churning: MSFT, GE, CSCO. I still like all 3. GE may be set for a pull back though.

Comments: View Comments |  Monday April 7, 2008