|
| PRIME
STOCK NEWSLETTER FOR October 27th, 2008 |
(If you do not see today's edition, please hit the refresh button) |
Position
Statement: In our Prime
Recommendation Letter we attempt to identify the
recommendation with the highest probability of
moving higher. We recommend that stop orders
be placed at the time of purchase, and once
the position has moved profitable we recommend
a stop be placed a minimum of $0.375 above the
purchase price and moved higher as the position
moves higher. |
|
Today's Comments:
The overall market sharply lower on Friday in a very broad based move that saw every sector index I track move lower with the exception of the Insurance Index. The weakest sectors on the day were the Broker/Dealer, The Oil & Gas, Telecom, Airlines, Networking, Chemicals, Internet, Cyclicals, Banking, Transports, Retailers, Consumer, and Pharmaceuticals indices. Friday's close of the Dow Jones Industrial Average below the previous yearly low of 8,451.19 is a very negative trading signal. I am now expecting the Dow Jones Industrial Average to move lower and test 8,235.81 and then 7,762.34 on a closing basis. The Bottom Line: The overall market should move lower.
|
|
| Sterling
Calendar for October 27th, 2008 |
| Economic
& Earnings Calendar |
| Date: |
Comments: |
| 10/27 |
FPL Group 'FPL' announces earnings before the market open. Est. $1.38 |
| 10/27 |
Hercules 'HPC' announces earnings after the close. Est. $0.39 |
| 10/27 |
Verizon 'VZ' announces earnings before the open. Est. $0.66 |
| 10/28 |
Apollo Group 'APOL' announces earnings after the close. Est. $0.67 |
| 10/28 |
Earthlink 'ELNK' announces earnings before the open. Est. $0.40 |
| 10/28 |
Fiserv 'FISV' announces earnings after the close. Est. $0.83 |
| 10/28 |
Kansas City Southern 'KSU' announces earnings before the open. Est. $0.60 |
| 10/28 |
Occidental Petroleum 'OXY' announces earnings before the open. Est. $2.71 |
| 10/28 |
US. Steel 'X' announces earnings. Time N/A. Est. $7.08 |
| 10/28 |
Valero Energy 'VLO' announces earnings. Time N/A. Est. $1.38 |
| 10/29 |
First Solar 'FSLR' announces earnings after the close. Est. $1.01 |
| 10/29 |
Hartford Financial Services 'HIG' announces earnings after the close. Est ($1.54) |
| 10/29 |
:Legg Mason 'LM' announces earnings before the open. Est. $0.09 |
| 10/29 |
Newmont Mining Corp. 'NEM' announces earnings before the open. Est. $0.44 |
| 10/29 |
Office Depot 'ODP' announces earnings. Time N/A. Est. $0.08 |
| 10/29 |
Prudential Financial 'PRU' announces earnings after the close. Est. $1.05 |
| 10/29 |
Tesero Corp. 'TSO' announces earnings after the close. Est. $1.50 |
| 10/29 |
Visa 'V' announces earnings after the close. Est. $0.56 |
| 10/30 |
Aventine Renewable 'AVR' announces earnings after the close. Est. $0.13 |
| 10/30 |
ExxonMobil 'XOM' announces earnings. Time N/A. Est. $2.40 |
| 10/30 |
Flagstar Bank 'FBC' announces earnings after the close. Est. $0.13 |
| 10/31 |
NYSE Euronet 'NYX' announces earnings before the open. Est $0.73 |
The
full earnings calendar for this
week can be found (here) |
|
|
Recommendation: Sell/Short
Transocean, Inc. 'RIG' |
| Company: Transocean, Inc. |
Symbol: 'RIG' |
Closing
Price: $66.26 |
| Web: www.deepwater.com |
YH: $163.00
YL: $62.40 |
EPS: $15.62 P/E: 4.24 |
Shares
Outstanding: 319 Million |
Forecasted
EPS:.$16.16 |
Market Cap.:
$21 Billion |
| Dividend: N/A |
Yield: N/A |
Aver.
Daily Trading Volume: 8.8 Million Shares |
|
| Price Targets: $65.05, $62.61, and then $53.39 |
Upside Stop: $68.77/share |
| Options Rec.: May 2009 $65 Puts @ $14.50/contract |
Options
Symbol: RKJ QM |
Additional
information on Transocean, Inc. "RIG'' can be found (here) |
|
Company Description: Transocean, Inc., together with its subsidiaries, provides offshore contract drilling services for oil and gas wells. It offers deepwater and harsh environment drilling services; oil and gas drilling management services; and drilling engineering and project management services, as well as involves in oil and gas exploration and production activities in the United States offshore Louisiana and Texas, and in the U.K. sector of the North Sea. As of February 20, 2008, Transocean owned and operated 139 mobile offshore drilling units comprising 39 high-specification floaters, 29 midwater floaters, 10 high-specification jackups, 57 standard jackups, and 4 other rigs, as well as had 8 ultra-deepwater floaters contracted for or under construction. The company was founded in 1953 and is based in Houston, Texas.
Chart updates daily |
A
full list of the news headlines
for Transocean "RIG" can
be found (here) |
|
Our Analysis: The shares of Transocean, Inc. 'RIG' set a new multi-year closing low Friday on heavier than normal trading volume. This is a very bearish trading signal. The shares of 'RIG' have also been battered by the declining price of oil, which continues to move lower. The shares of 'RIG' should continue to move lower and test $65.05/share, a point of support set in mid August of 2006. If the shares of 'RIG' close below that level, then I would expect them to test $62.61/share on a closing basis. I think there is a very good chance the shares of 'RIG' will continue to move lower and test $53.39/share, a point of support established in late October of 2005. I see upside resistance on the shares of 'RIG' at $68.36/share, and have set our stops accordingly at $68.77/share.. |
|
|
Stocks
Looking Higher |
|
|
Stocks Looking Lower |
GE, C, CSCO, INTC, JPM, RIMM, AA, FCX, TWX, GM, HPQ, QCOM, MUU, HD, LVS, KO, MOS, LOW, SLB, VLO, JAVA, DD, SU, X, LUV, ADBE, NBR |
|
| Yesterday's
Edition of the Prime Stock Newsletter |
The
Sterling Investment series of newsletters is produced
by Sterling Investment Services, Inc. If
you would like to receive a chart on any index
or stock mentioned in this report please contact
us at the below mentioned numbers. We also
offer custom research reports on any stock investment
that you may desire information on. To receive
further information on these services please visit
our web page at: www.sterlinginvestments.com
If you would like to contact us our # is 800-275-6901,
fax # (404)-816-8830 Email address is: enelson@sterlinginvestments.com
Sterling Investment Services may hold positions
in the securities recommended or may be providing
consulting services to the companies mentioned
within this report. |
Copyright
1992-2008 Sterling Investment Services, Inc.
P.O. Box 191767, Atlanta, GA. 31119-1767
Fax 404-816-8830
404-816-8240 |
|
|
| Providing
Investment Banking Consulting Services to Public
Companies |
|
