TWI’s 4 Stocks To Buy In 2009 Finishes Up 70%

December 31st, 2009 | Filed under: Editor's Pick, Stock Recommendations, , , ,

See The Wild Investor’s 4 stocks for 2010.

Its amazing how fast this year went by. I remember sitting in front of my computer a year ago originally picking these 4 stocks, and now its finally time to see the end result.

You’ll remember that these stock picks were originally part of a contest between me a handful of other financial bloggers. You can see how we all stacked up against each other at the bottom of this article.

Before getting into the nitty gritty of it all, lets first look at the results…

Ticker Initial Price ($) Price End 12/31/09 ($) Q3-Q4 Change (%) YTD Change (%)
AKS 9.32 21.35 8.21 132.62
SLB 42.33 59.60 9.21 56.19
BAC 14.08 16.92 -10.99 7.49
NFLX 29.89 46.17 19.09 84.30
Total 6.38 70.15*

YTD Market Change: Dow 22.46% | S&P 500 27.76% | Nasdaq 48.49%

All data is taken as of market close on December 31, 2009. Total calculated by taking average of all 4 returns. *Includes dividends.

I can’t stress enough why patience is so important in trading stocks. Remember that after the 1st quarter my 4 stocks were down 9%, but each successive quarter the returns grew and grew to what they finally where at the end of the year. See Q1 results, Q2 results, Q3 results.

How I pick these stocks: To keep short, I use a combination of technical analysis and common sense. By keeping track of the news, I see what sectors could be getting a boost, and then perform technical analysis on those individual stocks.

Now that we got all those stats out of the way, lets get to the analysis part…

The performance of my portfolio pretty much ran with the ups and down of the market. The overall rally kicked in around March, and that is really when things started getting hot.

As good as my picks did, they could have done even better… but Obama never got his infrastructure plan going, oil price didn’t take off as much as I thought it would, and unemployment got worse. Had half these things happened, I’m confident I would have seen a triple digit return for the year.

AK Steel (AKS)

AK Steel being up over 110% is great, but consider that just a year and half ago this stock was at $75. To put that into perspective, another 110% move from its current level would still leave the stock some 30 points below that high. An amazing deal if you ask me.

While the upside is great, it won’t come that easy. We’ll definitely have to go through some peaks and valleys before we can break through. Taking a look at a long-term chart, we can see that AKS is still trading within the lower level trading zone of the fibonacci numbers. This means that we can’t be sure the bottom is behind us until we can break that resistance of $28.

AK Steel Long-term Outlook

All that being said, leads me into my next point: the short-term outlook of AKS. Any stock that has already experienced a 100% move in less than a year should be hanging by a thread and the chart doesn’t try to disprove that theory as well.

AK Steel Technical Analysis

A combination of horrible signs are taking place above. Both the relative strength index and MACD have dipped into bearish zones, while the stock itself looks to be dipping below the 50-day simple moving average; however, remember that these indicators are short-term and pullback were bound to happen.

Overall, short-term this stock is bound for a pullback. Possibly all the way down to the 200 SMA. If you own shares, considering taking some if not all shares off table. Depending how low the stock goes, look for entry on break back above 50 SMA. Remember long-term trading zone isn’t broken until move above $28.58.

Schlumberger Limited (SLB)

Schlumberger Limited has interestingly followed the price of oil. Besides that, SLB alone looks like it could be ready to really spike or head lower. I personally believe the former to hold true. If oil prices head higher, all the better.

Based on the last major trend, SLB looks to have broken above the 38% retracement, and we could quickly move beyond the 62% if all cards are played right. First we need to clear the resistance at $63.

SLB Technical Analysis

So I feel confident to see support at around $57, and believe this stock has a lot of room to still head higher.

Bank of America (BAC)

If patience has ever paid off, it definitely did with this stock. At the end of the first quarter, it was at $7, and thankfully I told you to buy more. Hopefully you listened and are being rewarded now. I recently did an analysis on BAC, so I won’t get too much into it; however, just note that there is much upside left in this stock and a trading level between $16.50 and $18. React accordingly.

Bank of America Analysis

Netflix (NFLX)

While most of these stocks experienced their gains through the 2nd and 3rd quarter, Netflix did most of its growth during the 1st quarter and even prior to that. Coincidently that was when the market was not in such good condition as well. If we are to experience a pullback here, then look for potential growth here.

It doesn’t hurt to have Blockbuster (BBI) close down more stores as well.

Take a look at the current trading zone between $40 and $47. Obviously, we want a break higher.

Netflix Technical Analysis

Summary

Overall, I am thrilled with the results of this year’s picks; however, still remain cautious for 2010. Its hard to imagine the rally carrying over through 2011 without any major improvements? Remember, there is no harm in taking profits.

Competing Blogger Rankings

Rank Site YTD Return (%)
1 Intelligent Speculator 81.55
2 The Wild Investor 70.15
3 Where Does All My Money Go 56.14
4 The Financial Blogger 44.62
5 Four Pillars 35.26
6 Dividend Growth Investor 26.48
7 Million Dollar Journey 20.27
8 My Traders Journal 0.18
9 Zack Stocks -8.80

All data is taken as of market close on December 31, 2009. Total calculated by taking average of all 4 returns.

More on this topic (What's this?)
Market Outlook
Crashing Another Stock-Picking Contest
Read more on Wharf (HLDGS) at Wikinvest