The Friday Five, 7/12/07
Another week, another time for five stocks to watch. This week I’ve decided to be more relaxed, so I’m putting down potential ideas that may or may not see daylight. Its all about knowing potential, staying on top, and watching for signs that point to a good stock.
1. Macquarie Office Trust (MOF.AX) - Buy
A spin off from Macquarie Bank, this commercial property holder has a diversified portfolio throughout Australia and the US. It plans on expanding into Japan and Europe next year. The only reason I like this graph is the technicals. As you can see, there’s a strong bounce off that key $1.50 mark, and if we look at the candlestick, you see there’s someone there to support the stock. I’ll bet a wager Macquarie Bank’s investment division has an interest in keeping the stock above $1.50. Its common for institutions to initiate market limit buys for stocks, especially ones they have a vested interest in. I wouldn’t trade the stock over the long term, it doesn’t look strong enough to me, it’ll need a pretty huge catalyst and looks like its content being Macquarie Bank’s little honey pot. That works both ways too; keep the share price at a certain level and we can minimise downside risk. I propose buying into the stock at $1.59 and letting the trade run for a few weeks towards the $1.75 mark. Long at $1.59, looking to sell at the $1.75 range, depending on factors.
2. International Goldfield Limited (IGC.AX) - Wait and Maybe Buy
This one is a play for the risk takers. I’m not sure I’d enter just yet. As you can see from the chart, it seems to dive, then gets propped up by volume at the 20 cent mark. The upward momentum is almost as spectacular as the dives it takes. This could be a strong play if it drifts towards the $0.25 mark. Its stochastic has been screaming oversold for so long, any downward pressure will probably be unwarranted and away from its mean. Fundamentally I see no gapping holes in the stock. Standard cash flow reports, standard business as usual press releases. If the stock drops to $0.25, go long looking to sell at $0.35.
3. Glengarry Resources Limited (GGY.AX) - Potential Buy
Potential break out play here. As you can see, it broke out nicely in April and doubled in value on high volume. Since then it retracted, found support at the $0.12 mark, and is now moving towards its highs again. I’d keep this one on my watch list — if it manages to break the $0.21 mark, finds some volume, we could see another nice break out for a quick 3 day trade with some strong profits. I’d probably wait and see, and sell out at around the $0.32 mark, but it all depends on how the break out has been playing, how much volume, all that stuff. For now, I’m planning on stalking it and see how it transpires. Of course, I’ll keep you all posted, since I love all my readers as much as a cold beer on a Sunday afternoon. Potential to go long if it breaks out of $0.21 on strong volume.
4. CONCT EAST STAPLED (CEU.AX) - Buy
After a nice break out in the beginning of April, this seems to be a good place to go long, looking for a bounce. Notice the latest candlestick — a text book hammer is developing on high volume. The buying looks very aggressive in this stock every time there’s a dip. I wouldn’t be surprised to find out institutions are the ones loading up on this stock every time it dips. The chart seems to indicate thats the case. Go long at $1.64, looking to stalk a break out on high volume, stop at $1.55.
5. COOPER FPO (COE.AX) - Sell
When a stock doubles in value in only two days after a year of sideways movement, you have to ask why. In this case, I can’t see any reason why this is a reasonable break out. The sector isn’t under going any huge rise. There’s no major company announcements. The break looks like its reached a point of total exhaustion. I think its a strong short, because its unlikely it’ll face anymore upward momentum. Go short at $1.10.
Disclaimer: I hold no positions with any of the companies mentioned. Intended for educational purposes only, not be substituted for investment advice.
