Introducing The Oxen Group
The Oxen Group was founded in late 2008 by David Ristau with the help of his trading partners and friends. David is a fundamental trader who specializes in day-trades and ETFs. He selects his Oxen Picks based on a combination of fundamentals and loose, basic technicals. All picks are one-day trades with specific entry and exit points that attempt to buy pullbacks in stocks anticipated to move up through the rest of the day. David will be demonstrating his method and sharing his stock picks with us before the market opens so we’ll have an opportunity to follow along and see the results.
Now that we’ve gotten that out of the way, here’s David’s day-trade plan for today. – Ilene
Today’s pick: Gap Inc. (GPS)
The Oxen Group, for Friday, is excited about the prospects for Gap Inc. The company is a solid play based upon J. Crew’s earnings that were outstanding in after hours on Thursday, sending the stock up 18%, in after hours. J. Crew beat analysts’ EPS by 0.25, a large margin, but the stock will be gapping up tomorrow and too volatile for much predictability. One stock that will benefit from this positive news is Gap, which has been continuing to advance on a good retails earning season, as well as its own positive earnings. The positive news in apparel will bring a bullish fundamental position to GPS. The stock jumped 1% after hours. Tomorrow, the market should be somewhat sideways, with the Friday lack of news. The GDP reporting tomorrow could swing things either way, but volume will probably be light. Gap should be able to take advantage of a low volume day, as this news propels the stock forward. The stock should gap up and is a definite buy on a pullback at the beginning of the day. Technicals do scare The Oxen Group, and it will most likely mean that the stock has less upward momentum than if it was undersold, meaning it could need a quick exit and downward momentum towards the latter parts of the day. The fast stochastics have some room for upward movement, but RSI is relatively high, and it is near its upper bollinger band.
Entry: Recommend buying within first 5-20 minutes after slight pullback.
Exit: We recommend exiting after a 2-4% increase.
Upper Resistance: 17.75-18.00.
