Referencing the weekly stock radar, I am highlighting a few of the charts below for potential trades. On better than expected China GDP data, the markets gapped-up with enthusiasm. The day was looking to be very bullish, but bonds only strengthened and never contributed to fuel equities higher. Instead, stocks drifted the entire day back to nearly even. If you took profits on the gap-up and shorted the market, you could have napped until the final hour and sold your short position for a profit. That was how boring and uneventful today turned out to be, very disappointing for the bulls. If bonds don’t start unraveling soon, one of these days could turn very ugly, very fast.
Per my StockTalks, I closed out my Caribou Coffee (CBOU) trade that was started around $13 and closed near $16 to protect profits. For the rest of my positions, I trimmed profits all around into the morning strength. I was unable to be aggressive today and will simply preach patience until I can. Earnings season is upon us, so we have to be prepared for anything. I still believe we have more upside to go, but bonds will be the key to fueling that move. Don’t become complacent as if bonds continue to strengthen, stocks could fall hard at any time.
Do not be surprised if I start mixing in some new stocks this week and replace some older ones that are having problems accumulating volume. Volume is very important, so if any of my positions continue to have weak volume, I will look to swap them out for something more exciting like the ones below.
I’m still eying charts that are showing overall strength with established trendline support levels for favorable risk-reward buys. In a good market, I am more than willing to buy on breakouts expecting momentum traders to follow. In this market, I am finding that many breakouts are fizzling fast due to overall fearful sentiment and fast profit-takers. With that being said, I am more inclined to make moves near trendline support rather than breakouts.
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Ruth’s Hospitality (RUTH)
Yahoo Finance Profile:
Ruth’s Hospitality Group, Inc. operates restaurants in the United States and internationally. It owns the Ruth’s Chris Steak House, Mitchell’s Fish Market, Columbus Fish Market, Mitchell’s Steakhouse, and Cameron’s Steakhouse concepts in the full-service dining industry. The company’s restaurants cater to families, special occasion diners, and business clientele. As of June 26, 2011, it operated 130 Ruth’s Chris Steak House restaurants, including 63 company-owned and 67 franchisee-owned. The company was formerly known as Ruth’s Chris Steak House, Inc. and changed its name to Ruth’s Hospitality Group, Inc. in May 2008. Ruth’s Hospitality Group, Inc. was founded in 1965 and is headquartered in Heathrow, Florida.
Lattice Semiconductor Corp (LSCC)
Yahoo Finance Profile:
Lattice Semiconductor Corporation designs, develops, manufactures, and markets programmable logic products and related software. The company offers field programmable gate array (FPGA) products, including LatticeECP family for deployment in wireless infrastructure and wireline access equipment, as well as in video and imaging applications; and LatticeXP for the security, surveillance, and display markets. It also provides programmable logic device (PLD) products comprising various versions of ispMACH4000 in-system programmable complex programmable logic device family; MachXO family that is designed for a range of low density applications; platform manager, power manager, and ispClock programmable mixed signal devices; and software development tools and intellectual property cores. The company sells its products directly to end customers through a network of independent manufacturers’ representatives and indirectly through a network of independent sell-in and sell-through distributors. It primarily serves original equipment manufacturers in the communications, computing, consumer, industrial, military, automotive, and medical end markets. The company was founded in 1983 and is headquartered in Hillsboro, Oregon.
Yahoo Finance Profile:
Cambrex Corporation, a life sciences company, provides various products and services for the development and commercialization of new and generic therapeutics. It primarily involves in the custom development and manufacture of pharmaceutical ingredients derived from organic chemistry. The company’s products include active pharmaceutical ingredients (APIs) and pharmaceutical intermediates; and services include custom development and current good manufacturing practices manufacturing services. Its customers include generic drug companies and companies that discover and commercialize new small molecule human therapeutics using organic chemistry. The company sells its products through sales agents and independent agents to pharmaceutical and generic drug companies worldwide. Cambrex Corporation was founded in 1981 and is based in East Rutherford, New Jersey.
As always, do your own homework to see if you agree. Good luck out there.
Mike
At the time of publication, Kudrna had no positions in mentioned stocks, but may initiate positions within 72 hours.
