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Blain’s Nightly Stock Picks, March 10 2008
Posted by Blain Reinkensmeyer
March 10, 2008 at 6:10 pm
The market continued its downward spiral today with the NASDAQ shedding nearly 2% and the S&P 500 coming within three points of touching its January lows. Many stocks sold off hard and several opportunities have arrived for those willing to take the risk.
My Nightly Stock Picks have recently centered around Gold/Silver, Steel, Oil, and Fertilizers stocks as these are what’s hot right now. I warned readers two weeks ago on Fertilizers taking a rest, and today my three biggest picks sold off heavily: CF, POT, and MOS. Two Sunday’s ago I wrote,
“Keep a close eye on Fertilizers this week. POT, MOS, CF, and more all had two key distribution days last week, though they all have held up price wise. This is another group that may need a rest, and taking profits is not a bad choice.”
As I said time and time again over the last few weeks it is critical to have tight stop losses and stick to a disciplined investment strategy. I got stopped out of yet another stock today to break even and it won’t surprise me if it happens again tomorrow. If your portfolio isn’t down 7% in seven days then you should pat yourself on the back for a job well done.
And with that said, a rebound could definitely be brewing for this market. Tonight I have some stocks featured that could maximize off even a single day rally.
NASDAQ Composite
Could a rebound be around the corner for this index?
S&P 500 (SPY)
AK Steel (AKS)
Steel had a rough day today, but AKS bottom right at its pivot point of where I originally recommended it. I bought a few shares at the close today with a stop at $48.60. If the stock gaps or opens above $49 there is a good shot at a few point rally for this Steel play.
Rangold Resources (GOLD)
The gap range is your support for GOLD which starts at about $48.50. If the stock opens green tomorrow you may have a quick few points on your hands. Keep stops at the gap range.
Mosaic (MOS)
First of three Fertilizer stocks I mentioned to be extra careful with…
Potash (POT)
…here is the second…
CF Industries (CF)
…and lastly the third. Taking profits is NEVER a bad move in this type of market.
Dry Ships (DRYS)
I definitely make mistakes, and DRYS was one. I should have never tried a speculative pair trade with the market in a confirmed downtrend. I sold half my position at $72 and half at $69 to cut my losses at only a few percent. The stock finished today at $60.40.
Cleveland Cliffs (CLF)
Original pivot point support alongside the 50 day moving average could have this Iron play seeing a temporary bottom.
Carrizo (CRZO)
This US Oil & Gas Explorations stock is in the hottest group right now of the market. Numerous stocks in this group are still holding up even with the huge sell off that has ensued. CRZO is just one bet on pivot point support holding up.
Sean Hannon will be on tomorrow with his typical Weekly Commentary, so I will see you back here Wednesday night.
Good post Blaine. Stopped out of POT today. Bought some what I think are incredibly undervalued DRYS at $61 today. POT will be a buy again some day soon, maybe after they guide up on the next earnings call.
I definitely did not see DRYS below $61 coming today, just wild. I will be very surprised if it and several of those other stocks such as AKS don’t jump tomorrow on a rebound.
I’m expecting POT to level out in the mid-130s. Good early call on the downside direction. I sold an April 135 put with this expectation. At least we look to be heading north for a few minutes at the open today.
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