Good Wednesday to all. Well, it is not a great morning for us as Suntech Power (STP) disappointed, and I now am looking quite foolish for overinvesting into solar power. The company had disappointing earnings this morning, and it looks like we are going to need to sell right out of the gate to avoid further losses. Our only other position is in DressBarn (DBRN), which is neutral for us currently.
Yesterday, I announced that we were starting the 16 Days of Oxen. Those members that signed up for 16 Days of Oxen started to receive exclusive material. Yesterday, they received an Overnight Trade that is down a bit to start the day but looks strong. Today, they will receive a new Longterm Ratings Report and get first access to one of our new writers. If you want to receive this information let me know, and I will tell you about how you can receive it.
The market is definitely a tough read right now. There is not too much going on in the right direction this morning as CPI, housing starts, and building permit reports were all weaker than expected. Despite this, futures are pointing higher? Confusing.
The gains that the market has made this morning most likely will be given up.
Short Sale of the Day: Chico’s FAS Inc. (CHS)
Analysis: Too bad we didn’t go with Chico’s for our Overnight Trade. The stock is trading as high a 9%+ up this morning in pre-market trading despite only a penny beat on profits and declining margins in the company’s Q3 earnings. Earnings were better than expected for the company, but it only beat by less than 5% on profits per share. Further, the company’s margins fell as it heavily discounted its goods.
The company is taking quite the jump this morning on its earnings report, and it it up quite significantly. This has pushed the stock above its upper bollinger band at its current opening price with the top limit being around .png)
10.90. The stock moved as high as 11, but it made it no higher. With the market definitely being in a bear run right now, any gains we make this morning off the bat may be given up throughout the day. Chico’s will probably be the same way. I expect it to open up high and gain around 1-2%.
From there, however, the stock is going to have made a major move, and it should lose demand for shares and see oversupply of sellers as they try to turn their profits. With our entry range, we are well positioned to take advantage of this movement. The stock will be heavily overbought, overvalued, and well above its upper band, pushing it lower.
Get in after a pop to start the morning.
Entry: We are looking to get involved from 11.00 – 11.20.
Exit: We are looking to cover on a 2-3% drop in price.
Stop Buy: 3% on top of entry.
Good Investing,
David Ristau
