Stock Market Analysis August 28, 2013

Morning Stock Market Thoughts For August 28, 2013

Future are flat, to slightly positive. And while I’m happy to wake up and see that the wheel’s haven’t completely fallen off the wagon overnight, yesterday’s damage still looms large. So I don’t know about you but… I’m largely on the sidelines here.

I’ll be watching the open carefully to keep my finger on the pulse. I’m not ruling out day trades should we see things start to snap back. But my buys will be nimble, with tight stop-losses.

Home sales data is coming out at 10am as well, so be careful about making any big bets before that number is released (as it could be an excuse for a market move, one way or another).

Trading Thoughts On Stocks I’m Watching Today:

— SNV was taken to the woodshed yesterday. Financials were hit hard and this small-cap regional bank took a beating. I’m still bullish on this company and will add to the stock, should it move lower in the coming weeks (something that wouldn’t surprise me).

— TINY is at new (seemingly impossible) lows. If you want to understand why, look no further than the TINY Yahoo Finance Message Boards. It’s hard to get excited about a company that isn’t going to make money for 5 years.

— IAG is still looking interesting to me. The gold miners (GDX) look like they’re dealing with some overhead supply, so we might see more of a pullback before the entry.

— BRKS looks good to me at these prices. My only hesitation is that the stock could continue to drift lower for another month or two. The company is well positioned for the long term but their short term revenue is dependent on the semi conductor producer order schedule, which seems to be taking longer to ramp this year than usual.

Other Thoughts and Good Articles I’ve Read Today:

— I know you might be getting tired of my links to ChessnWine, but the update on broad market divergences is incredibly helpful. I keep coming back to his work because it’s the most objective technical analysis I can find, and it always reminds me to take a step back and listen to what prices are telling me.

— I’m a sucker for info-graphics. As things heat up around Syria, this map shows the tightening noose around Damascus.

— I may have posted this before, but Scott Bleier’s: “The Story Goes Something Like This…” is always worth a re-read, especially for any non-finance types lurking around.

What are you reading this morning?

Stock Idea: A Quick Look At BRKS…

It looks like BRKS caught an upgrade from Northland Capital Markets this morning. The stock is rated outperform with an $11.00 price target. I think this is conservative but sometimes analysts like to move their price targets up as the stocks go, rather than make a big call. Anyway…

I haven’t heard of Northland before so it’s not the best endorsement of all times or anything. But their commentary on how they see revenue progressing at the end of the year is worth checking out. BRKS has a lot of fundamental value, both in terms of competitive advantage, macro-economic trends, dividends and balance sheet.

The volume is thin though, and I don’t expect a sustainable move in the stock until seeing some signs of more revenue. But if you’re in it for the long term I don’t think the stock is overvalued at these prices. I’m seriously thinking about adding to my own position if the stock gets support at yesterday’s highs. Remember, you can also read this in-depth analysis of BRKS I wrote a few months ago (there’s a video too).

My only real worry is the stock could linger for awhile or grind lower on general market weakness. That’s not really any way to live though. So I’ll keep you posted if I make any moves.

And a note on $BRKS from reader @TimWolfgang

That’s all for now! I’ll be back with more for you later.

(Disclaimer: do your own research too, don’t just read mine).

Stock Market Day In Review: August 28, 2013

It almost felt like the market “had” to slip into the close. I had my eye on the 1-min IWM candlesticks for the last half hour of today’s session, and seemingly on cue the market started to fade. While we closed green, the high volume end of day fireworks aren’t alarmingly bullish either. Nonetheless:

I added a small amount to my long-term BRKS position. Last time it was at this price levels it “v-rallied” higher. Now it’s threatening to roll over but I’m willing to make a small buy and add again if BRKS falls to $8.40.

Other than buying BRKS, I was sitting on the sidelines for most of the day. It was nice to see SNV bulls wrestle the stock higher. But a lot more work needs to be done to reclaim new highs…

While XOM finally caught a meaningful bid, CAT continued to linger. Along the same lines, GOOG and AMZN failed to make any meaningful highs. And the homebuilders clunked along in the mud. Now don’t get me wrong…

I’m a patient guy. And I realize on the longer-term the market is still in a very robust uptrend. But in terms of immediate price action, there isn’t much to be encouraged about. So with that in mind…

I’ll continue to build a buy list and add to my core positions as opportunities arise. I was happy to see IAG retreat today and hope that the follow through continues tomorrow. I missed out on the run last week and am interested in a “pilot buy” to get some exposure to the name.

What’s your game plan?

Leave a Reply