Of late in the “media” talking heads and pundits have been touting stocks and so we thought we’d take a look at the stocks to see what the stock touts were sucking the unwary into. As our readers know we are always chary of handicapping stocks. If we’re going to handicap them we want to see evidence of the possibility of undeserved and obscene returns. This is in contradistinction to our philosophy and practice of investing in the ETFs and indices and taking what they give us.
CVX, XOM, SPN, CHRW, T, JNJ. Why? The charts are uninspiring at best. And we don’t see returns worth plunking capital into. So much for those guys. Now on to ambiguous cases.
MSFT, IBM, ORCL. These are in uptrends and buyable but we are not enthusiastic. Are they going to double from here? Are they going to appreciate by 30%. ORCL of course is always an interesting horse.
ABT, UTX, FAST — the most interesting of the lot, but still nags. We’ve shown their charts here and these charts will allow readers to see how our twisted and eccentric mind works. (And the way your mind should work, especially when dealing with individual stocks.) That is, find a Basing Point (usually the recent low, or an identifiable wave low) and add a filter and locate a stop point. In this case we used a filter of 3%, which is moderately aggressive.
You should not buy a stock OR ANYTHING without following this procedure. Otherwise you will end up owning Enron or WorldCom.