Here are the notes I wrote about some stocks on my watch list this morning.
– Wait for consolidation. $2.80-$3.50.
– Fill the gap $71.50-$74. 200dma support at $69.50?
– What’s the next news catalyst? Value analysts’ upgrade? At what price level? Check Morningstar.
– Upgrade wave may be in effect. MA gap from $50-$53. What’s the news catalyst for this? Check game sites.
So the first thing to note is that Crystallex (AMEX:KRY) took a bit hit today and is now trading at that $2.80 range. I had thought the stock would slowly settle back to $2.90 – $2.80 over the next few days but some bad news came pushing the stock down quicker than I anticipated.
It seems that Venezuela is going to include Crystallex in a group of companies being reviewed for taxes owed. I don’t expect anything negative to come from the review (just a gut feeling there). Crystallex is always lumped in on these announcements lately, which are really targeting the oil industry. In addition, Ant & Sons is reporting that Crystallex’s credit rating is (or was) downgraded. Not good news for sure, but nothing new which really affects the KRY story. I’d say opportunity to buy into some weakness.
I think KRY could have one or two more down days in it, and then I’ll look to add some more to my position for a short-term trade. My target will be somewhere around the moving averages (around $3.40).
With regards to Amgen Inc. (AMGN), I want to do a bit more research on this stock. What I know (or believe) now, is that Amgen is a great biotech company that is out-of-favor in the short term for some pipeline issues. Some people expect 2007 to be a good year for the company, and biotech is a nice growth opportunity in general, so I’m trying to find a way to get into this stock. It looks like there is support from the 200-day moving average at around $69.50. So I would look to make an entry there with a tight stop. There’s also that nice gap in the chart from $71.90 to $74.30, which could be filled in.
(UPDATE: Looks like Cramer talked nicely about Amgen on the show today. Up over 1% after hours. Getting in at a good price tomorrow might be tricky.)
AMD. AMD. AMD. (Advanced Micro Devices Inc.) I’ve always preferred their products to Intel. Maybe I like an underdog story. In any case, the stock is being trashed. At the same time, I admire the ballsy stuff they are planning to do with their newly aquired ATI assets. Integrated graphics and co-processors have a lot of potential.
I think there is still a lot of hating to be done on this stock. After the dust settles, we’re going to have a stock at a low low PE at the beginning of a big computer (and thus chip) cycle. If you add to that some news that AMD’s new processors are faster (or lighter or cheaper or better looking, whatever) than Intel’s stuff, and you have a stock ready for a big move.
Like I said, I think there is still some hating going on, so I wouldn’t jump in yet. If the stock breaks through $15, it go as low as $10 before finding support again (some Hipegg analsys to that effect). And the news catalyst of AMD coming out with killer tech is not a give-in (they have to actually make that tech first). However, most of the downside should be well priced into the stock, and I’d say you’d have a safe bet on your hands.
And last, but not least, we have Electronic Arts Inc (ERTS). ERTS actually had a good day today. The story here is the video game cycle. New systems are out. The consoles are selling well overall. Game sales should be up huge over the next year. EA will have to catch up on their Wii titles, but they seem to have a good pipeline overall. All things told, ERTS should be rallying already, but for some reason Wallstreet has been less than kind to the company lately. (Note to self to read the buzz around why people think this is so.)
A glance at the chart for ERTS shows that the 30-day MA is about to fall down to touch and/or cross over the 200-day MA. The crossover point would be at about $50.50. If the stock can jump up above that level, it may become a new level of support you could make a trade against. Aggresive traders could buy in tomorrow with a stop below today’s low, assuming today’s momentum can continue. One target might be the 50-day MA and/or the January high at around $54-$54.40. I’d like to get in with a trade here and let it ride if it seems like the stock is turning around on a larger scale.
Gamasutra (awesome videogames industry publications) recaps an analyst’s expectations of ERTS coming earnings call here.
As always. I would be interested in anyone’s thoughts, comments, or flames. Thanks.