Over the last couple of weeks the stock market has become pretty predictable – stocks go down and any gains are mostly diminished as the market reaches closing time.
Now everywhere I turn I see an article about turning to defensive stocks, which I feel aren’t as strong of a safe haven as these stocks used to be.
There are still some bullish indicators. According to Vickers Weekly Insider Report, the insiders sell-to-buy ratio has dropped all the way down from 7.83 in mid-April to only 1.26 last week. This means that insiders were only selling 1.26 shares of their companies’ stock last week for every one share that they were buying.
Also, according to Barron’s, approximately 80% of companies in the S&P 500 reported earnings for the first quarter of this year that beat analyst expectations. Combining both of these facts should be in the favor of a recovery soon.
As we look at it now, most of the major indices sit at key support levels. The S&P 500 for example is hovering around the 10,000 market. Obviously a dip below this line doesn’t bode well for anybody.
Below are some stocks I am looking at.
Krispy Kreme Doughnuts (KKD) – Besides being amazingly delicious (although I haven’t ate one in over 4 years), the chart doesn’t look too bad. I wouldn’t recommend holding for too long, just enough to see if the pop occur.
Apple (AAPL) – Nothing about the chart is special, but Apple is planned to announce a new iPhone and perhaps some other news on Monday, which could give Apple stock a big push higher.
Keryx Biopharmaceuticals (KERX) – This stock is more risky than I usually like to play, but could payoff big and doesn’t require traders risking too much capital. Keryx is expected to present its results of a phase 2 trial for one of their drugs at the 2010 ASCO Conference this Tuesday. Obviously, like all bio-stocks. This thing can go soaring or come crashing down based on the news and it can happen fast. BE CAREFUL.
Nike (NKE) – You could probably throw in a host of other soccer-related stocks. As the World Cup gets ready to start, an interest in soccer (futbol – to my international readers) is 100% likely to happen, which means buying new cleats, soccer balls, and other soccer gear. Given that Nike is home to Christiano Ronaldo, Fernandes Torres, and a host of other top soccer players, I like this retailer the best.
Confused? Learn more about how I read stock charts.