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Holding: AET

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Symbol	Sector	Return	Exposure	Trades	Last Trade	Status
AET	Health Care Providers	16.20%	n/a	4	15-Jun-09	Prior Holding

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28-Jul-09

Wednesday Watchlist

Holding Rationale for AET.

I still like most of the charts I mentioned in Monday's post (with the exception of SAH, see below). Take note of the health insurers, as the entire sector appears to be moving out. Here are stocks I am holding or watching for trades today:

- SAH: I mentioned on Monday that SAH was attempting to break out. Earnings came out yesterday morning, with a 22% drop in revenue, and earnings of 7 cents a share vs 40 cents a year ago. Price squeezed higher in morning trading, then sold off to end the day lower on heavy volume. This automotive retailer has heavy debt, and is over 1000% above its March lows. At the same time, due to heavy short interest (or manipulation), it keeps climbing. With this earnings report out of the way, I will be watching price action today. A break over yesterday's high would likely initiate a good short squeeze, while weakness today would signal a failed breakout, and a good time to start a short position. I feel confident that in the longer term this stock will trade significantly lower than today's price.

- OCNF: This shipper has earnings on August 3. I like the long basing pattern, Tuesday's high volume, and also the volume pattern going back to May. I am looking to start a long position today, and will likely hold a small (1/3 full) position through earnings.

- DTG, CAR: The car rental companies are on many short sellers' radars, a factor which keeps driving them higher. Additionally, there is talk that these stocks are being manipulated higher so that the companies can sell stock to deal with substantial debt issues. Hertz reported a 93% plunge in profit yesterday, a factor which may finally break the winning streak for these companies. I have been watching these for quite some time. There is really no good reason for this price run-up except manipulation, low float, and heavy short interest. They could certainly squeeze higher. However, the long term prognosis is poor, and Hertz earnings could be the catalyst for a top.

- EXC is a play on nuclear power. Price reacted well to earnings last week, breaking above a two-month consolidation area. The 50 day moving average is in the act of crossing the 200, with price pulling back to support above. I will be looking to add to my long position today.

- ISLE: This casino company reported earnings last month, and has continued to trade in a range, therefore not participating in the most recent market rally. Price has had a 400% run since march, and looks played out here.

- MSPD: A nice breakout on heavy volume on earnings. This stock looks to be headed higher.

- DSPG: Another earnings breakout, with pullback and doji forming yesterday.

- CVH: Health insurers may see some buying as Congress looks to eliminate the public option from health care legislation. CVH had a very clean breakout on earnings, and looks likely to head higher.

- WCG: Health insurance, on watch.

- AET: ditto

- WLP: ditto