Friday Jan. 29 Premarket Analysis
Today in the Stock Market
Dear Fellow Traders
Pessimism continues to rule the markets as the Dow Jones Industrial Average is unable to hold on to any major gains. According to some of the commentary a disappointing outlook in the tech sector caused today’s selloff. Also more negative news from Standard and Poor’s also did not help calm jitters about the world economy. In their latest report they said they no longer consider Britain’s banking sector the “most stable or low risk.” This comes just days after they put Japan’s debt rating on negative credit watch. The DJIA shed over 100 points and closed at its lowest point since mid-November. Investors and market players will be watching very closely to see if the 10,000 level will provide any support to this recent sel-off.
With a poor outlook for the tech sector it is not surprising that the NASDAQ closed at its lowest level in a month. QQQQ, the ETF of the NASDAQ composite, broke through its recent support level of $44. The ETF opened in negative territory and spent the rest of the day in the red. Even Wednesday’s special announcement from Apple (AAPL), showing off the new tablet device the Ipad, was not able to provide any near-term support. In fact Apple was one of the biggest losers on Thursday.
The U.S. dollar continues to hold on to most of its gains it made in the last two sessions, which is having a negative impact on the gold market. GLD, the most popular gold ETF remains caught in a tight range with resistance at $108 and support at $106. The ETF did break through that support in intra-day trading however it managed to close the day at $106.48.
Although there is not a lot of positive news in the market it is nice to be able to mention a bright spot, which for us was RVBF. This has been a difficult trade and it has taken a lot of patience but strong discipline is paying off. Yesterday I pointed out that I saw some pretty good strength and I was not disappointed. The stock gapped two cents at the open and managed to hit a high of $0.139 during the day. The stock pulled back a little but managed to close the session at $0.11. We have been waiting for volume to increase on RVBF and it came back like a hurricane. The stock traded almost six million shares. I think we could see another push to $0.15 but I definitely took some profits yesterday..
Speaking of patience, I think now is a good time to mention AGCZ. The stock continues to disappoint but that is not surprising. As long a gold prices remain under pressure this stock will not move higher. However once gold prices start to move higher we could see this price shoot higher very quickly. On Thursday the stock closed down at $0.179. I think we can expect to see this stock bounce around the $0.20 area in the near term. So I carefully work on building a lower average cost….
Our latest pick, BPAC, is showing signs of consolidation. The stock has been volatile the last few weeks so a period of consolidation is not surprising. The stock hit a low of $0.50 on Thursday but managed to bounce back and closed in slightly negative territory at $0.52.
The recent strength of the U.S. dollar is having an impact on commodity markets, which is affecting another stock we are watching. Our Canadian pick, FLX dropped sharply on Thursday losing five cents and closing the day at $0.205. However, I want to point out that we are in this stock for a long term (six to eight months). I wanted to point out what the stock is doing but I don’t want to read too much into this short term volatility. I will be watching any dips very carefully to look for any good buying opportunities. This is one of the important lessons a trader needs to learn to be able to properly manage their positions
I wanted to finish the letter with a sincere apology. Two of our recent picks have not turned out the way we thought they would. We were surprised by the recent move in BWIH and BYSD. We thought the recent news announcements on these stocks would have propelled their prices higher. But this is the stock market and even the best traders are wrong. The best thing to do is admit a mistake cut your losses and move on. It is not an easy lesson to learn but a trader gains nothing by dwelling on his or her mistake or trying to find someone to blame. It is important to always look for the next good trade and move on….
AS AN EXAMPLE..I have been talking about adding to RVBF for many days now…and yesterday we were up 73% from the $0,08 level…and we had many days where buying at $0,07-$0,08 was possible….
Have a Great Trading Day and a great week-end….
One Response to “Friday Jan. 29 Premarket Analysis”
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what about ISPI . do you think it is a good idea to hold after the great losses .