Successful short-term trading is a learnable skill. It takes a combination of a keen eye to identify changing fundamentals within the market or company and the ability to read price. By “reading price,” I mean the aptitude to study price changes on a spread sheet or chart in order to make an educated guess as to whether the price trend will continue or reverse.   #-ad_banner-#In addition, the ability to handle losses while not deviating from your trading plan is a key factor in short-term trading success. Using the above factors as a guide, I identified FuelCell Energy (NASDAQ: FCEL)… Read More

Successful short-term trading is a learnable skill. It takes a combination of a keen eye to identify changing fundamentals within the market or company and the ability to read price. By “reading price,” I mean the aptitude to study price changes on a spread sheet or chart in order to make an educated guess as to whether the price trend will continue or reverse.   #-ad_banner-#In addition, the ability to handle losses while not deviating from your trading plan is a key factor in short-term trading success. Using the above factors as a guide, I identified FuelCell Energy (NASDAQ: FCEL) as a very likely candidate for substantial short-term profits. Let’s take a closer look at this innovative company. FuelCell Energy is a Danbury, Conn.-based manufacturer and distributor of stationary fuel cell power plants. In other words, the company makes large batteries and markets them to electric utilities, independent power producers, and the education, health care and hospitality industries, among a variety of other sectors. FCEL boasts a market cap of around $640 million, revenue of nearly $188 million in the past 12 months, and just under $68 million in cash.   Things appear to be improving for the company, which… Read More

There is no question that China has a bright economic future. China remains the fastest growing economy on Earth despite its recent slowdown. #-ad_banner-#Remember, just like the stock market, economies never travel at the same velocity in a straight line higher. There are always aggressive periods of growth and slow periods. Long-term investors can use the negativity surrounding the weaker-than-expected economic numbers to find bargains in this burgeoning market. One of my favorite sectors to profit from the Chinese economic growth story is telecommunications, specifically the mobile phone market. A recent study published by Business Insider revealed that smartphones are… Read More

There is no question that China has a bright economic future. China remains the fastest growing economy on Earth despite its recent slowdown. #-ad_banner-#Remember, just like the stock market, economies never travel at the same velocity in a straight line higher. There are always aggressive periods of growth and slow periods. Long-term investors can use the negativity surrounding the weaker-than-expected economic numbers to find bargains in this burgeoning market. One of my favorite sectors to profit from the Chinese economic growth story is telecommunications, specifically the mobile phone market. A recent study published by Business Insider revealed that smartphones are the fastest growing segment and will soon overtake feature phones in the nation.   The Chinese smartphone boom has helped a variety of companies prosper. One of my current favorites is Sky-mobi Limited (NASDAQ: MOBI). The company operates as a mobile application store that provides a platform to purchase smartphone applications, games, music, books and other media. It also provides a mobile social media network named Maopao Community. MOBI is well imbedded in the space and has contracts with 106 smartphone handset companies and 1,170 feature phone makers. Boasting a market cap of around $200 million and over 110 million… Read More

The financial sector was by far the biggest beneficiary of the trillion dollars injected into the economic system by the Federal Reserve. The traditional drivers of the sector, such as interest rates, took a back burner to the surge of capital. Acting like a shot of adrenalin, the money sent the sector’s biggest players soaring higher in 2013. One of the primary exchange-traded funds (ETFs) tracking the sector, iShares Dow Jones US Financial (NYSE: IYF), was up close to 30%, with many of its components posting similar massive increases. But all good things must come to an end. I think… Read More

The financial sector was by far the biggest beneficiary of the trillion dollars injected into the economic system by the Federal Reserve. The traditional drivers of the sector, such as interest rates, took a back burner to the surge of capital. Acting like a shot of adrenalin, the money sent the sector’s biggest players soaring higher in 2013. One of the primary exchange-traded funds (ETFs) tracking the sector, iShares Dow Jones US Financial (NYSE: IYF), was up close to 30%, with many of its components posting similar massive increases. But all good things must come to an end. I think the party is over for this sector — at least for the rest of 2014. The sector sold off hard in January but has staged an impressive bounce back in February. Looking at the iShares financial ETF’s daily chart, you can clearly see the sharp selling in January and the bounce-back near the highs in February.   #-ad_banner-#As you know, I don’t place much credence in traditional technical analysis alone as a predictive tool in most cases. However, this pattern, combined with what is happening fundamentally, paints an ominous picture for the near-term future of the financial sector. … Read More

It’s not often that you see a monster company that has pulled back into the value buy zone. It’s even less often that this happens in combination with a special situation involving a marketing deal and an equity stake in a much smaller but rapidly growing company with a revolutionary patent. #-ad_banner-#The fundamental and technical pictures of both companies reveal a clear path of shorting the smaller company and buying the larger firm. Put simply, this setup has opportunity written all over it. First, the larger company in this pairs trade owns the most recognizable brand on Earth. In fact,… Read More

It’s not often that you see a monster company that has pulled back into the value buy zone. It’s even less often that this happens in combination with a special situation involving a marketing deal and an equity stake in a much smaller but rapidly growing company with a revolutionary patent. #-ad_banner-#The fundamental and technical pictures of both companies reveal a clear path of shorting the smaller company and buying the larger firm. Put simply, this setup has opportunity written all over it. First, the larger company in this pairs trade owns the most recognizable brand on Earth. In fact, this brand name is the second most commonly understood term in the world, behind only the word “OK.” The company has a presence in 200 countries, and it sells 75 million drinks an hour worldwide. In addition to its flagship product, the company also owns a portfolio of 3,500 beverages and 500 brands. As you’ve probably guessed, I’m talking about Coca-Cola (NYSE: KO). It’s said that the Coke name alone has a value of over $80 billion. Despite its booming successes, things have slowed a little at Coca-Cola. Last year, global sales volume rose just 2% while revenue slipped 2%… Read More

Buying stocks that are surrounded by negativity is not fun — but the best deals are often found in companies that are undergoing turnarounds yet still mired in bearish sentiment. #-ad_banner-#This should come as no surprise. After all, the reverse is true — as Warren Buffett has said, “You pay a very high price in the stock market for a cheery consensus.” The market is full of stories about struggling companies that were able to turn around difficult situations and become profitable — companies like Apple (Nasdaq: AAPL), General Motors (NYSE: GM) and Citibank (NYSE: C). Investors in those companies… Read More

Buying stocks that are surrounded by negativity is not fun — but the best deals are often found in companies that are undergoing turnarounds yet still mired in bearish sentiment. #-ad_banner-#This should come as no surprise. After all, the reverse is true — as Warren Buffett has said, “You pay a very high price in the stock market for a cheery consensus.” The market is full of stories about struggling companies that were able to turn around difficult situations and become profitable — companies like Apple (Nasdaq: AAPL), General Motors (NYSE: GM) and Citibank (NYSE: C). Investors in those companies who recognized and acted upon their turnarounds reaped large profits. To be sure, not every struggling company returns to profitability. Many wither and die on the vine, leaving investors with little to nothing to show for their trust and investment. There is no question that investing in turnaround candidates is risky. However, the substantial potential upside, combined with tactics to control risk, can make turnaround investing a profitable strategy. A prime example of profiting from a company that is mired in negativity but is in the process of turning things around is YRC Worldwide (Nasdaq: YRCW), a Kansas-based company that… Read More

I have studied technical analysis for many years. What I have discovered might come as a surprise to many: #-ad_banner-#The majority of technical analysis is pure nonsense. While patterns and indicators appear to repeat themselves in a consistent manner, most of the time these patterns have zero predictive value and are not consistently repeatable when properly statistically tested in the stock market. Hindsight bias and flaws in human perception are the main reasons that technical analysis remains popular yet fails again and again when applied to real-time decision-making in the stock market. However, there are two technical analysis patterns that… Read More

I have studied technical analysis for many years. What I have discovered might come as a surprise to many: #-ad_banner-#The majority of technical analysis is pure nonsense. While patterns and indicators appear to repeat themselves in a consistent manner, most of the time these patterns have zero predictive value and are not consistently repeatable when properly statistically tested in the stock market. Hindsight bias and flaws in human perception are the main reasons that technical analysis remains popular yet fails again and again when applied to real-time decision-making in the stock market. However, there are two technical analysis patterns that I have found that do actually put the odds in my favor when tested over a series of trades. Remember, this does not mean that every trade entered due to these patterns will be a winner. However, it does mean that more trade entries than not will result in profits. The patterns I’m referring to: 1. Stocks are more likely to fall after a series of successively higher closes than to continue higher. 2. Stocks are more likely to bounce higher after a series of successively lower closes than to continue lower. I know this flies in the face… Read More

In the history of the U.S. economy, a handful of dates stand out as truly game-changing. #-ad_banner-#Examples include when insider trading was banned in 1934, the implementation of Medicare in 1965, the issuing of the first bank credit card in 1946, and the April day in 2001 when the New York Stock Exchange switched to using decimal prices instead of fractions. Each of those events left an indelible mark on the U.S. economy — and earned prescient investors a pretty penny in profits. Another game-changing date is on the horizon, one for which investors can begin preparing now. On Oct. Read More

In the history of the U.S. economy, a handful of dates stand out as truly game-changing. #-ad_banner-#Examples include when insider trading was banned in 1934, the implementation of Medicare in 1965, the issuing of the first bank credit card in 1946, and the April day in 2001 when the New York Stock Exchange switched to using decimal prices instead of fractions. Each of those events left an indelible mark on the U.S. economy — and earned prescient investors a pretty penny in profits. Another game-changing date is on the horizon, one for which investors can begin preparing now. On Oct. 1, 2015, Visa (NYSE: V) is scheduled to reverse liability on fraudulent credit card transactions. Historically, credit card companies have taken responsibility for fraudulent transactions — but on that date, Visa will no longer absorb the losses from fraud stemming from traditional swipe-and-sign credit cards. Visa will instead transfer those losses to the merchants themselves. This is the endgame in the long process of switching U.S. consumers and merchants to the worldwide standard of EMV payment technology. The United States is the last major market to adopt EMV, which is expected to be the accepted standard by October 2015. EMV… Read More

A long time ago, in a financial world very unlike today’s, investors could earn decent returns with just a savings account and certificates of deposit issued by the local bank. #-ad_banner-#Many of you likely remember these days — and you likely remember that the downside of these generous but low-risk yields was double-figure mortgage rates and spiking inflation. In contrast, today’s easy-money policies and near-zero interest rates have made things much easier for borrowers. However, the flip side is that decent yields have all but vanished from the risk-free landscape, forcing investors to look to unusual and often high-risk instruments. Read More

A long time ago, in a financial world very unlike today’s, investors could earn decent returns with just a savings account and certificates of deposit issued by the local bank. #-ad_banner-#Many of you likely remember these days — and you likely remember that the downside of these generous but low-risk yields was double-figure mortgage rates and spiking inflation. In contrast, today’s easy-money policies and near-zero interest rates have made things much easier for borrowers. However, the flip side is that decent yields have all but vanished from the risk-free landscape, forcing investors to look to unusual and often high-risk instruments. One such instrument has been known to provide yields in excess of 50% — yet owns no assets, has no employees and doesn’t pay any federal income taxes. In fact, yields on these investments are tax-advantaged and may offer unique tax credits.  Called royalty trusts, these instruments are corporate entities that focus on natural resources such as oil, gas or mining. They own the rights to royalties on the production and sale of natural resources rather than the resources or infrastructure. The trusts have no physical operations and no management or employees. Royalty trusts are financing vehicles that trade like… Read More

Among the broader bull market of 2013, one sector enjoyed a boom so substantial that it increased investors’ holdings by $2.2 trillion. And I’d bet that most readers are already participating in this explosive trend. #-ad_banner-#I’m talking about the housing market — but unbelievably, many financial pundits and self-proclaimed gurus are warning of the coming dangers in this market while overlooking the facts.  While it’s easy to have your investment decision swayed by a well-expressed opinion, the only way to drill down into financial reality is to tune out the noise and study the actual numbers. In this… Read More

Among the broader bull market of 2013, one sector enjoyed a boom so substantial that it increased investors’ holdings by $2.2 trillion. And I’d bet that most readers are already participating in this explosive trend. #-ad_banner-#I’m talking about the housing market — but unbelievably, many financial pundits and self-proclaimed gurus are warning of the coming dangers in this market while overlooking the facts.  While it’s easy to have your investment decision swayed by a well-expressed opinion, the only way to drill down into financial reality is to tune out the noise and study the actual numbers. In this case, the numbers tell a far more bullish story than the fearmongers and perma-bears would have you believe. According to a recent study by research firm CoreLogic, nearly 4 million U.S. homes shifted from negative equity to positive last year. The Federal Reserve has reported that homeowners’ net equity holdings surged by $2.2 trillion between the third quarter of last year and the same period in 2012.  This tremendous increase in equity provides consumers confidence, which boosts spending across the board and lifts the entire economy. Additionally, greater access to more capital means more investment, further fueling the economic rebound. Read More

Many investors thought it was a suicidal decision. Yahoo (Nasdaq: YHOO) should be investing domestically and in itself rather than in a speculative and relatively unknown Chinese Internet company.  Or so went the conventional wisdom back in 2005. As many successful companies have done, Yahoo bucked the conventional wisdom with its purchase of 24% of Alibaba. Since then, Alibaba has grown to be considered Yahoo’s most valuable asset. For example, Yahoo’s massive uptrend in 2013 can be attributed to Alibaba’s incredible growth.   While the exact date of the Alibaba IPO remains… Read More

Many investors thought it was a suicidal decision. Yahoo (Nasdaq: YHOO) should be investing domestically and in itself rather than in a speculative and relatively unknown Chinese Internet company.  Or so went the conventional wisdom back in 2005. As many successful companies have done, Yahoo bucked the conventional wisdom with its purchase of 24% of Alibaba. Since then, Alibaba has grown to be considered Yahoo’s most valuable asset. For example, Yahoo’s massive uptrend in 2013 can be attributed to Alibaba’s incredible growth.   While the exact date of the Alibaba IPO remains uncertain, the company has vowed it will happen in 2014. With a soaring valuation of $153 billion, up from $120 billion in October, Alibaba is slated to be the largest initial public offering ever. Serving China’s 618 million Web users, the company had sales of $160 billion in 2012, crushing the $86 billion posted by e-commerce giant Amazon.com (Nasdaq: AMZN).     The IPO will likely make Alibaba’s investors — which, in addition to Yahoo, include SoftBank (OTC: SFTBY) with 37% and Chairman Jack Ma and the company’s other founders with 10% — quite wealthy. Unfortunately, it will be difficult… Read More