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Buzz Bits: Dow and Nasdaq End in the Green


Your daily Buzz & Banter highlights.

Editor's Note: This is a small sample of the content available on the Buzz & Banter.

INFN... call was good but results were better... - Sean Udall - 2:31 PM

Here are some top-line thoughts on Infinera (INFN):
  • Stock was severely oversold and undervalued.
  • Still can't fully explain the severity of the selling, though I have some ideas.
  • Prof. Zucchi is calling for low $20's. That would make sense as the secondary price of $22 would be a natural resistance point.
  • I'm slightly more bullish on upside target than Z. With the old high's being a potential magnet.
  • Much longer term (year plus), I'm thinking INFN could be one of those bagger type stocks, though the number of bags is hard to call. Though I'm not sure anyone holds stocks for years anymore.
  • For that to happen a lot will depend on how fast another player in the space comes to market with a similar tech solution to INFN.
  • Before that happens, might another player in the group just take INFN out of the equation? This is probably more likely.
  • The magnitude of deal wins is possibly the most impressive thing with INFN's growth.
  • The old lows (first lows) in the $16's could serve as mild overhead resistance on the way up.
  • You could buy the breakout here but buying breakouts has been fatal since December. At some point that will change but many think we retest again. I'm not convinced we retest lows on market but I'm also not ready to buy breakouts just yet.
  • I'll add more on a pullback to $12.50 or lower... Which was my last level of aggressive buying.
  • How dumb was I not to add one more large slug under $9... that could haunt me for years I think.
  • However, discipline trumps conviction and as stated, I was only adding to INFN with other trading gains once it really broke down.

Lastly, another reason to keep your position size moderate and roughly equal throughout your portfolio is that your big losers then can't swamp your big winners. As bad as Accuray (ARAY) felt yesterday, the INFN move today equalizes those short term losses. Then you can decide to rebalance or let things ride and play out. Like I did with INFN -- I will most likely only add further to ARAY with trading gains. I added to the position into recent extreme weakness, building a smaller holding to a normal sized position into the teeth of the selling. Now after the big breakdown, ARAY will likely mark time until a catalyst arrives.

Position in INFN, ARAY

Gold Bugs Not Afraid - Lance Lewis - 12:16 PM

Editor's note: We saw gold futures tumble after this morning's jobs report, and asked Professor Lewis his thoughts.

My guess is too many people were long the euro and gold ahead of this jobs data that was, I felt, pretty easy to see would be weak (the January birth/death model adjustment is always heavily negative). Sometimes you get these weird short-term reactions to payroll numbers because of the way people are positioned for them. With that said, they're also usually just a one-day reaction too. This should be great to suck in more shorts for fuel next week.

On the other hand, and I'm not normally one to suggest this, it sort of looked like there was some sort of attempt at intervention in the euro and gold. Both gold and euro were stronger this morning and then strengthened even further after the weak jobs data. Then suddenly both cratered in the blink of an eye as large orders hit the market? It was weird.

Regardless, if there was an intervention, it was unsuccessful ( and euro's backs weren't broken) and now gold should roar back even stronger.

Position in gold, gold shares.

Talkin' Friday! - Quint Tatro - 12:08 PM

Sorry I am a little behind the ball this Friday but what a morning. We started hot and heavy as participants scrambled to get long. I hope you took the opportunity to feed them some of your inventory. We're now flirting with the lows of the day and I am busy resetting alerts. After a very busy morning I don't plan on doing much here unless we start to see this weakness bought. If that happens there are a few I am watching that I would like to add to.

Legg Mason (LM): OK, not popping after some huge homie exposure is one thing, but remaining stuck in the mud while being the 2nd largest shareholder of Yahoo (YHOO), what's the deal with this stock? I still have faith, over yesterday's high of $73.30 is where I will add.

Amr Corpo (AMR): In the flurry of the morning activities I actually added some of this and now find myself underwater. Yesterday's high volume accumulation was intriguing to me and I won't throw in these shares until I see yesterday's low taken out, I will be watching for a move over $14.50 to add here.

Broadcom (BRCM): I am sure you have noticed the semi strength today as many have pointed that out, however Broadcom remains stuck at multi-year lows with no pep at all. Yesterday the stock saw a small hammer and if today's semi strength persists I suspect it could actually work. I started some on weakness and will add over today's high of $22.75.

That's all for now Minyans, it has been a crazy one and I suspect it will remain that way into the afternoon. What a way to start the month.

Position in LM, AMR, BRCM

Ready, Aim... Rotate? - Kevin Depew - 11:12 AM

Three stocks on my screen are approaching potential DeMark buy signals; not yet, but getting close - Wrigley (WWY), Campbell Soup (CPB) and Molson Coors (TAP). These are classic defensive names, and contrast their performance year-to-date with two sectors that have benefited greatly from short covering, shown in the chart below, Homebuilders and Brokers.

If one believes the fundamentals for Homebuilders and Financials still face headwinds, as does the economy itself, then an opportunity for rotation into equities in sectors that are defensive in nature seems to be approaching.

Click to Enlarge


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No positions in stocks mentioned.

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