It’s time for my bi-annual fishing trip to Alaska to fish for “Kings on the Kenai”. Although late July is toward the tail end of the salmon run, I should still be able to make the mandatory haul of “kings” and “reds”.
Each year I purposely take a break from the market for at least one week. Every two years I head up north to a buddies cabin on the Kenai River to fish for some outlandish sized salmon. The accomodations are Spartan—just the way I like it. No kids, no cell phones, no computer, no internet.
This year we’re going with another couple. The guys fish while the wives kick back, and read stacks of books and novels, while sipping on expensive wine. It’s a very laid-back and relaxing time that is much welcomed.
As I think about the current situation with the stock market, I see that it maybe worth the time to go fishing. The past two sessions gave the bulls some hope and a decent bounce. Was Tuesday the bottom? I don’t know. My guess is that six months from now, we’ll probably be able to determine if it is (was).
My point is, that it’s time. Time to seriously start looking at candidates to establish long positions, if you haven’t already. I’m not saying, “go all in”. No, that strategy is for riverboat gamblers and fools. But, if I were a betting man (which I am), I would stay with the market leaders in the strongest sectors. Especially those stocks that have gotten the combo ice pick / hammer to the chest: energy, steel, fertilizers, and coal. I think traders will go right back to the same names, should this market start to show a broader based rally. Old profitable habits are hard to break.
I’m saying just be ready for some surprises.
Right now, there are some new fishing holes that continue to come to my attention:
Biotechs and Drugs.
Yeah. That’s right. Though I blew out of those “adventures in fuckery“, the biotechs still remain a sector to explore. The group has come off a bottom, where the bullish percent sentiment was 14%, to where it currently sits now at 32%. Typically stocks approach oversold territory at 70%. We still have a ways to go.
A few names here: [[SVNT]], $26.36, [[ILMN]], $84.62, [[CPHD]], $28.81, and [[ALNY]], $31.83. [[CELG]], $71.43, looks a little overbought here, so I’d be careful about wading into it. Wait to buy it on a pullback. You might even get it at $66.
The other sector that is rising up in ranks is, surprisingly, the Drug stocks. Market sentiment was lowest in March, with only 18% of the stocks in an uptrend. Drugs have sort of been hanging around and have been sleepers. Quietly the sector as a whole has been improving to where 34% of the stocks in the sector are on buy signals.
Some interesting names include: [[PMC]], $22.06, [[RIGL]], $24.85, [[DEPO]], $3.99 (for those that insist on penny stocks), and [[BNT]], $14.80. The usual suspects like [[ABT]], $57.50, certainly should be on the buy list for those more conservative.
One drug stock to avoid is [[APPX]], $23.38, which looks overbought.
Notice the long tail up. This stock is vulnerable to a sell off. Look for the reversal back down to $20 if you’re looking to short it.
Well, there you have it. A starting list of candidates for some fishing fun.
Obviously, there are no guarantees that the biotechs and drugs will continue to show improvement, so trade at your own risk—-and exercise caution.
Enjoy your day and weekend. See you all after next week.
Off to catch the Kings and Reds !
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