Sterling Investment Services for all your stock and options trading needs. Stock Tips

Stock and Option Trading Ideas
 
Loading

Market Data and Free Tools

Markets Overview
Market Momentum
Nada
Commodities
52 Week Highs
52 Week Lows
Volume Leaders
Price Advances
Price Declines
Percent Advances
Percent Declines

Symbol Lookup
Custom Quotes
Custom Portfolio


 

Free Newsletter

Join our mailing list
and receive our FREE Weekly Newsletter!

subscribe unsubscribe

Interested in reselling the Sterling Investment Services Prime Stock Newsletter or referring subscribers and earning extra income?? (more)

New Features - Coming Soon

Daily Market Commentary Daily Long or Short Stock Recommendation and our option recommendation. Select Fundamental Info. Our Technical Analysis of the Stock!

If you think traders & investors find this information useful then you should be one of our affiliates!


Announcements

Sterling Small Cap Letter.

Sterling Investment Services is now publishing our Small Cap Review newsletter that highlights small and micro cap companies that we should be of interest to our readers. Additional information on the Small Cap. Review can be found (here).

 

Sterling Custom Research

Sterling Investment Services has recently published a small cap. research report on Sun River Energy, Inc. (SNRV.OB). This is a company that we think has some pretty interesting potential. A copy of our report can be found (here).

 

 

 


www.sterlinginvestments.com


Sterling Weekly for the Week of January 25th, 2010
Is the Dow pulling back? And to where?

Since the previous edition of the Sterling Weekly, the Dow Jones Industrial Average declined 436.67 points or approximately 4.1%, to finish at 10,172.98 The Dow lost approximately 430 points in the final 2 days of trading last week. The market pullback was primarily ignited by new proposed regulation on the banking industry that are perceived as causing banks to tighten credit. Additionally the uncertainty over the confirmation of Fed. Chairman Ben Bernanke whose term as Chairman of the Fed. effectively expires at the end of this week. Regardless of the cause, the fact of the matter is that the Dow Jones Industrial Average appears to be in the process of braking, if it hasn't already done so, its upward trend that has been in place since March of last year. So I thought it would be relevant to take a look at where support comes into play on the Dow and see what that might tell us, as it is important to know if this is just a short term pullback or the start of a new downward trend.

I've inserted below a short term chart of the Dow Jones Industrial Average that shows the Dow breaking below 3 points of support that have been established since mid-November. The next points of downside support are at 10,092.19 and 9,712.73, as indicated on the chart. You can also see on the chart the trading channel that has been developing since mid-November. (Note: I 1st published a chart showing this trading channel in the December 28th, 2009 edition of the Sterling Weekly with a note stating there was an increasing chance of a pullback.)

Dow Jones Industrial Average for January 22nd, 2010 (chart # 1)

Now I believe the trading activity on Monday and Tuesday will really determine if this is a short term pullback or the start of a new downward trend. I see one of two possible scenarios developing. By the close of trading on Tuesday the market has rallied and in effect re-enforced the trading channel that has been developing since mid-November and we are going to see an increasingly volatile market. Or, the market is even lower by the close of Tuesday and we have broken the upward trendline that has been in effect since March and started a new move downwards. In a typical market movement there is the belief that a run will have three (3) legs to it. I'll be the 1st to admit that defining these legs can easily be more of an art than a science; but if we have experienced 3 upward legs, then the odds of a major pullback are fairly strong. I've published a slightly longer term chart of the Dow Jones Industrial Average below showing what I think would be the three (3) upward movements since the March 2009 lows in the market.

Dow Jones Industrial Average 01-22-10 (chart # 2)

If I am correct, and we have seen the three (3) upward movements and are starting a new downward trend, then the question is how far down could we go? Well, in the August 24th edition of the Sterling Weekly I published the Fibonacci Retracement numbers on the decline where I forecast an upwards move on the Dow Jones Industrial Average to somewhere between the 9,086 and 11,625. Additionally in the November 23rd, 2009 edition of the Sterling Weekly I stated that we were entering an area of upside resistance that could make further advances in the Dow tougher to come by. Well, if the current upward movement is over, then Dow rally peaked with a closing high of 10,725.43 on January 19th of this year. That would represent a rally upward of approximately 4,178.38 points from the closing low of 6,547.05 set in March of last year. Since a typical retracement is somewhere between 1/3 and 2/3rds of the move being retraced, then a 1/3rd retracement would take the Dow down to 9,332.64 and a 2/3rds retracement would take the Dow down to 7,939.84. Again I would like to point out that the media likes to focus on a 50% retracement as the most likely occurrence, so a 50% retracement would be to 8,636 which is where there appears to have been a lot of previous activity and an area on the chart where the Dow could find itself stuck for a time.


Sterling Calendars for the Week of January 25th, 2010.
Economic Calendar

Date

Est. Time Release

For

Consensus Prior
01/25 10:00am Existing Home Sales Dec. 5.90M 6.54M
01/26 9:00am Case-Shiller 20 City Index. Nov. (5.00%) (7.28%)
01/26 10:00am Consumer Confidence Jan. 53.5 53.3
01/26 10:00am FHFA Home Price Index Nov. 0.1% 0.6%
01/27 10:00am New Home Sales Dec. 370K 355K
01/27 10:30am Crude Inventories 01/22 N/A (0.471m)
01/27 2:15pm FOMC Rate Decision 01/27 0.25% 0.25%
01/28 8:30am Initial Claims 01/23 450K 482K
01/28 8:30am Continuing Claims 01/16 4,600K 4,599K
01/28 8:30am Durable Orders Dec. 2.0% 0.2%
01/29 8:30am GDP-Advance Q4 4.6% 2.2%
01/29 8:30am Chain Deflator - Advance Q4 1.3% 0.4%
01/29 8:30am Employment Cost Index Q4 0.4% 0.4%
01/29 09:45AM Chicago PMI Jan. 57.4 58.7
01/29 9:55am University of Mich. Sentiment Jan. 73.0 72.8
  Misc. Calendar
Date: Comments:
01/25 AK Steel Holdings 'AKS' reports earnings at 8:30am. Est. $0.21
01/25 Amgen 'AMGN' announces earnings after the close. Est. $1.16
01/25 Apple, Inc. 'AAPL' announces earnings after the close. Est. $2.07
01/25 Eaton Corp. 'ETN' announces earnings before the open. Est. $1.23
01/25 Haliburton Co. 'HAL' announces earnings before the open. Est. $0.27
01/25 Texas Instruments 'TXN' announces earnings at 4:30pm Est. $0.49
01/26 Baker Hughes 'BHI' announces earnings before the open. Est. $0.35
01/26 Corning 'GLW' announces earnings before the open. Est. $0.42
01/26 Delta Airlines 'DAL' announces earnings before the open. Est. ($0.24)
01/26 Johnson & Johnson 'JNJ' announces earnings. Time N/A. Est. $0.97
01/26

Verizon 'VZ' announces earnings before the open. Est. $0.55

01/26 US Steel 'X' announces earnings. Time N/A. Est. ($1.43)
01/26 Yahoo, Inc. 'YHOO' announces earnings after the close. Est. $0.11
01/27 Abbot 'ABT' announces earnings before the open. Est. $1.17
01/27 Airtran Holdings 'AAI' announces earnings. Time N/A. Est. $0.03
01/27 BMC Software 'BMC' announces earnings. Time N/A. Est. $0.68
01/27 Caterpillar, Inc. 'CAT' announces earnings at 7:30am Est. $0.28
01/27 ConocoPhillips 'COP' announces earnings at 8:30am Est. $1.13
01/27 General Dynamics 'GD' announces earnings. Time N/A. Est. $1.57
01/27 Boeing Co. 'BA' announces earnings at 7:30am. Est. $1.36
01/28 3M Company 'MMM' announces earnings. Time N/A. Est. $1.21
01/28 Amazon.com 'AMZN' announces earnings after the close. Est. $0.72
01/28 AT&T 'T' announces earnings. Time N/A. Est. $0.51
01/28 Ford Motor 'F' announces earnings at 7:00am Est. $0.26
01/28 KLA-Tencor 'KLAC' announces earnings after the close. Est. $0.27
01/28 Microsoft 'MSFT' announces earnings after the close. Est. $0.59
01/29 Chevron 'CVX' announces earnings . Time N/A. Est. $1.71
01/29 Honeywell ''HON' announces earnings before the open. Est. $0.90
01/29 Mattel 'MAT' announces earnings before the open. Est. $0.68
  The full earnings calendar for this week can be found (here)

Prime Update:

The Prime Stock Newsletter is our daily newsletter that contains commentary on the overall market, and our single best trading idea for the day! (Both Long & Short Sale Recommendations) We select this stock through a combination of technical (charting) and fundamental (financial) analysis. The Prime Stock Newsletter provides select expanded quotation information, corporate description, select recent company news, our technical analysis of the shares and our expectations, and our options recommendation for the company.

Our most recent Performance Report is now available available (here). We are proud to report 18 of our last 20 recommendation resulted in profitable trades for an average profit of $0.51/share. This is an 90% success rate.

Archived copies of our Performance Reports can be found (here).

Highlights from Recent (20) Editions of the Prime Stock Newsletter
Recommendation Date Entry Point Recent Close or Exit Price Profit* Note
Travelers Co. 'TRV' short Dec 17 $49.50 $47.89 $1.61 Covered on the 18th
Patriot Coal 'PCX' Dec. 23 $14.90 $17.24 $2.34 Sold on the 28th
Fibria Celulose 'FBR' short Jan 14 $22.63 $20.02 $1.19 Covered on the 15th

* Our January 19th short sale recommendation of Western Digital 'WDC' @ $43.98/share, closed at $40.74/share Friday January 22nd for a gain of $3.24/share.

* Our January 13th short sale recommendation of Texas Inst. 'TXN' @ $24.91/share, closed at $23.11/share Friday January 22nd for a gain of $1.80/share.

* Our January 12th short sale recommendation of Best Buy, Inc. 'BBY' @ $39.23/share, closed at $37.15/share Friday January 22nd, 2010 for a gain of $2.08/share.

* Our December 23rd recommendation of Patriot Coal 'PCX' @ $14.90/share, reached an intra-day high of $22.37/share on January 11th for a gain of $7.47/share.

* The per share PROFIT is a theoretical calculation based upon the opening price the day the recommendation is published and the intra day high (or low for short sales) on the exit day. The exit day is determined based upon the application of our "Rules for Trading", the implementation of "stops" within our stated policy, and may not reflect the complete or full movement of the underlying recommendation.

 

Disclaimer: The Sterling Investments series of newsletters is produced by Sterling Investment Services, Inc. All information used in the production has been obtained from sources believed to be reliable and accurate. Sterling Investment Services does not warrant or assume any liability for inaccuracy of the information used to produce our publications. To receive further information on these services please visit our web page at: www.sterlinginvestments.com If you would like to contact us our fax # is (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.
1999 - 2010 Copyrighted, All Rights Reserved