Flat Week As Market Consolidates

The market ended the week essentially flat as Tuesday's sharp declines were offset by Thursday's recovery. The market is showing signs of consolidation following a strong 10 week surge. Near term pullbacks and consolidations are good as it gives market participants time to pause and allows time for demand to build for that next bull market leg. Market nervousness grew over European debt concerns and fear over China raising interest rates in order to slow growth. On the domestic front, housing starts remain anemic and job growth remains stubbornly slow. However, corporations appear healthy as profits are rising behind strong balance sheets. Merger and Acquisition activity is heating up and those are signs that investment opportunities are attractive. Trading will be light over the upcoming holiday week which could bring higher volatility. Over the next week or so, we look for the market to continue consolidating, but would not be surprised if the market experienced sma ll declines. Longer term we remain bullish and expect the market to have a strong year in 2011. Our plan is to become fully invested in stocks after the Thanksgiving holiday. For options, we also plan to get more aggressive with trades after the next week or so. Last week we entered a call spread position in Teck Resources, a Canadian mining company. In short, we bought the $43 call and sold the $50 call and the $40 put to offset our entry cost. In just one week we have gained 85% on our position after the underlying stock made a sharp move to $50. That puts our position significantly in the money, a trade we plan to ride for now given there is still a lot of upside with a maximum gain potential of 365%.

Momentum And Value (MAV Screen): Breakout Stocks To Buy!

What Stock Tips do we have? For this week, we reshuffled our buy list to take advantage of new market leaders. For example the Auto Parts Industry has had a great run this year, but that story appears to be getting a bit long in the tooth. It will likely continue to do well, but what subsequent growth is experienced will be much more expensive. In that light, we dropped Dorman Products and TRW Automotive from our buy list. TRW in particular has had a strong run and the company remains sound and reasonably value. We still like the stock and would not sell, but we also do not want to buy at these levels. We also dropped TPC Group and LJ International (JADE) as volatility in both stocks drove prices sharply lower. In our prior newsletter, we mentioned the risk in owning JADE and sure enough saw sharp declines last week. We now have nine stocks on our buy list including Clearwater Paper (CLW, Paper Products), Erie Insurance (ERIE, Insurance), Sapient Corp (SAPE, Software ), Georesources (GEOI, Oil & Gas), Quaker Chemical (KWR, Chemical Manufacturing), Measurement Specialties (MEAS, Scientific Instruments), Triquint Semiconductor (TQNT, Semiconductors), Texas Instruments (TXN, Semiconductors), and Viropharma (VPHM, Biotechnology). Clearwater and Erie have the longest tenure on our watch list as both were added in September and have risen steadily since. Our newest additions this week were GEOI, KWR, MEAS, and TXN. Rising oil prices and industrial activity over the next few months is expected and that will help GEOI oil production and the industrial demand for KWR products. MEAS develops and manufactures sensors and sensor based systems for equipment manufacturers and is also showing strong growth due to rising industrial demand. Texas Instruments (TXN) is widely known for calculators, but has a significant business in designing and making semiconductors for equipment manufacturers across several segments. It is that diversification whic h has helped TXN show more price stability over the past two years relative to other companies in the semiconductor space.

Get Daily Updates On Breakout Stocks From: http://www.marketbeatingstocks.com