LiveRocket Week 18 Performance - Up 2.5%

Either I have a lot more readers than I thought, or I was right this week more than once.
First, I said “UCTT I think will drift before firming up and rising again.” I was right about the drifting, and I’m waiting for the rising part.
Second, “I do suspect that we will see a shock next week. The market is overbought - it's up 10% in 8 weeks. Time for a correction and the Fed meeting may be exactly what the doctor ordered.” The market dropped ~2% the day after the Fed’s meeting.

My prediction next week is for a lot of short squeezing, pushing prices up a bit. But in general, it’s time to exit the market a bit and re-enter in late June. No, that is not the sell-in-May-go-away plan. We’re 2 weeks overdue for that. This is part of my theory that stocks drift post-earnings season and then they pick up again about 4 weeks before next earning season. That’s when the hedge funds put down their bets and buy in. Get in 6 weeks before earnings season starts in early July.

I also wonder about the Fed and interest rates. A lot of traders may stick around in case they need to move fast because the Fed drops rates.

Now for a quick review of our performance this week. We are up 2.5% against a flat market. That’s a big opposite from last week when we were flat and the market was up. However, while I should be pleased, I am not. Most stocks were down, with TIE, PCP and MDR the only ones pushing us up.
Several stocks have softened and we need to make some decisive moves.


HIGH TECH
AMX – Up 0.75% and another 52 week high. This is 3 weeks in a row that we’ve seen a new high.
CTSH – Down 3.9%. Horrible. It is drifting and we are now even for our investment. So much for driving to $95 and selling. The positives are that they are moving in synch with their peers like INFY. Also, they bounced off their 200 DMA, so they have reached a bottom.
NUAN – Down 1.7%. Nothing new. When you look beyond the pre-earnings run-up to $16.8, we have some positives. We are up 3% since pre-earnings. The lows are higher and we seem to be headed to a base of $16. Then it’s up from there.
PWR – Down 1%.
TRID– Down 2.9%. I am a true believer and I see nothing wrong with the company’s stellar performance, only with the stock price. That in turn is driven by the options overhang. I do think something criminal happened and they are doing their very best to postpone the day of reckoning. But so is every other company accused of the options backdating. Clear that up and this will be a $40 stock. So I’m going to wait.
Because sales are booming. WMT reported huge sales in flat panel TVs. I see no downside risk anymore, only upside. Accumulate if it sinks below $20.
UCTT – Down 3.6%. Well, the damage is done and there is no downside risk. Better yet, JP Morgan calls them overweight. Shorties are having a great time: ~13% of the shares are shorted. At some point this reverses and they get squeezed. Forget cut and run, I’m thinking of adding

OIL SERVICES/EQUIPMENT
I think the oil drillers and equipment companies have demonstrated strength and the market is trying to decide what’s next. Also, the petroleum reports are showing that the US oil consumption is up 5% in volume terms since last year.

ATW – Down 8%. They missed earnings by 7%, so that’s a reasonable correction. They hit a new 52 week high before earnings. I don’t care – this stock is incredibly undervalued. Besides, the stock surged 75% in 4 months, so some contraction is okay.
CLB – Down 1%. I’m not seeing the growth I want to see here. They are now on my Watch list for selling.
ESV – Down 0.5%
MDR – Up 20% on 2.5X average volume and a new 52 week high.

BIOTECH
DIGE – Down 9% and erasing our gains. This is dead in the water until or unless Europe or the US adopts the treatment for HPV. We are even here and we only put in $4K, so I am going to walk away and come back on a down day.
HOLX – Down 2.7%. A little post earnings pullback.
IMA – Up 3.5%. They upped their Biosite bid from $90 to $92.5.

OTHER
KSU – Up 0.5%
OCN – Up 0.5%
PCP – Up 5.3%.
TIE – Up 17.5%. I said that they would hit $0.41 and they did. Buyout rumors persist.