The stock market again held in last week and we still think it is vulnerable. Individual stocks like James River Coal Co. (JRCC) declined 27% in five days from 23.50 intraday to 17 intraday. We like the stock and bought at 17.60, and also Arch Coal at 15.95, which had declined 20% in five days from 19.75 intraday to 15.75 intraday. We believe they both have bottomed because if they kept declining at their present rate of descent, they would be at 10.81 for JRCC and 11.75 for ACI by next Monday, June 29, which we don’t believe will happen … but we are prepared to buy more at those fire sale prices, if it does.
We also bought some Incyte Corp (NASDAQ: INCY, Stock Forum) **3.24 at 3.18 and some Array Biopharma (NASDAQ: ARRY, Stock Forum) ** 3.20 at 3.26. Be that as it may, we would be taking profits and we did so in our Aggressive Trading Portfolio, which is up 77% in seven months. The reason being is that we take profits. We would be selling those stocks that have gone up 50% -200% since March 9, such as Research in Motion (NASDAQ: RIMM, Stock Forum) 72.78; Baidu (NASDAQ: BIDU, Stock Forum) 297.60; Apple Inc. (AAPL, Stock Forum) 139.48; and Google (NASDAQ: GOOG, Stock Forum) 420.09.
We also have an immediate sell rating on the following stocks with significant insider selling: International Business Machines (IBM) 105.89 (Again); MYR Group (MYRG) 21.89; Caterpillar (CAT) 33.65 and Activation Blizzard (Again) (ATVI) 12.88. The stock picks below are of varied quality (mostly speculative) and most, except CI, WRE and Blackstone Group, are at historically low prices and coming out of bottoms, with good charts. VLNC and WRE have significant insider buying. We would be buying lightly, with the expectation that they can move down from these prices in a correcting market. Our normal buying strategy is to buy 40% of a particular stock now and buy 30% more on each 20% decline from our original buy price … for good entry prices.
Our stock picks (Based on Friday 6-19-09 closing prices): Cigna (CI) 25.24; Washington REIT (WRE) 22.30; Blackstone Group (BX) 11.92; Taser, Inc. (TASR) 4.54; Aurizon Mines (AZK) 3.85; China Education Alliance* (CEUA) 3.75 (SPEC); Rubicon Minerals (RBY) 3.23 (SPEC) ; Incyte **(INCY) 3.11 (SPEC) ; Array Biopharma** (ARRY) 3.14 (SPEC); Terrestar (TSTR) 1.76 (SPEC); Left Behind Games (LFBG) .07 (SPEC) ; Sionix (SINX) .17 (SPEC) ; Sportsnuts (SPCI) .002 (SPEC).
* Cotton’s “Stock of the Week”
** We hold a position in the stock or option
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