Hey all,
Hope you had a great weekend. I will come back to the recap of Friday, but let’s get into the picks…
Buy Pick of the Day: Direxion Daily Real Estate ETF (DRN)
Analysis: I don’t have a ton of confidence in the markets today, thus far… We have seen most of the European indexes start high and move lower on fears over Greece continuing to struggle. The supposed bailout package gave the European markets a pop to open, and they have all fallen since. The American markets are looking to start the day in the green, according to the futures, but I think this will be short lived. The rise is on what? Personal spending being higher than personal income? Dillards beating estimates?
The market is going to be a winner or loser today based on the ISM Manufacturing Index at 10 AM. It will determine whether we are going to keep a rally going or see a loss on the market’s open. I am in the prior camp. Here is why. The ISM index has been estimated at 58 vs. last month’s 58.40. This estimate is way undervalued. Throughout February, every manufacturing index report we saw (Philly, New York, Richmond, Chicago) all beat estimates, which were undervalued because of misses coming the month prior. These indexes were beating often by exceptional margins. I am expecting a nice beat coming from the ISM index at 10 AM. That will continue to help give a boost to the market. Without it, I think we would fall on our faces.
So, why DRN then? We want a volatile play for our trades of the day, and there is not much more volatile than the Direxion ETFs. For the most part, these are interchangeable, and they follow market trends. I like DRN because it is not too overvalued going into the market, up only 0.70%. The ETF also should be getting some from the fact that it holds Public Storage (PSA), who delivered some pretty outstanding earnings this morning, beating EPS esimates with a 1.27 vs. the expected 1.13.
We want to get into this one as soon as the market opens. I expect a slow rise and then hopefully a nice pop after the ISM report. Good luck!
Entry: We are looking to enter the ETF in the 138.60 – 138.70 range.
Exit: We will want to gain 2-3% on top of our entry price.
Stop Loss: 3% on…
