SHREVEPORT, La., Jan. 4, 2005 (PRIMEZONE) -- StockPickReport.Com (http://www.stockpickreport.com -- the web's only non-mainstream stock rating service), rates Amazon.com, Sprint FON Group, Level 3 Communications, Atmel Corporation.
STOCKPICKREPORT RATINGS:
Amazon.com (NASDAQ:AMZN) -- WEAK BUY
http://www.stockpickreport.com/abrating.php?sym=AMZN
Sprint FON Group (NYSE:FON) -- SELL
http://www.stockpickreport.com/abrating.php?sym=FON
Level 3 Communications (NASDAQ:LVLT) -- SELL
http://www.stockpickreport.com/abrating.php?sym=LVLT
Atmel Corporation (NASDAQ:ATML) -- WEAK BUY
http://www.stockpickreport.com/abrating.php?sym=ATML
STOCK COMMENTARY:
Tuesday, January 4, 2005 StockPickReport Commentary
Hey, We Were Right! Right?
The market reacted Monday in a way that is not very illustrative. I guess you could say that we were right about the market about to drop, huh?
Well, yes, it pulled back. Yes, we thought that would happen. Yes, we think there's more downside. But, for those of you who are "bullish," Monday was nothing more than "profit taking," in our opinion.
For a more serious downslide to begin, we think the trendline since August must be broken.
FEAR and GREED and PEACE of MIND
Ever buy a stock and feel queasy about it? Ever wake up in the morning, and before your feet even hit the floor, you're reaching for the remote to find out "what the market's doing"? Ever watch the market close down and find yourself snapping at your kids, wife, or dog later?
Yeah, we've been there, too.
But, it's for those reasons that we use technical analysis to guide our stock picks. We assume that we are but "fleas" on the back of an "elephant" and as such, we are better served trying to find out which direction the "elephant" will go next -- but be ready to jump off if the "elephant" is about to roll over on top of us.
If you look at the news you will get sick from the ups and downs. If you look at the numbers, you may not get the "adrenaline fix," but you will gain some "peace of mind".
Will you always win? No. Will you always lose? No. But we believe that if all things were equal and you'd lose or win regardless of the system you employ, you should use a system which takes as much emotion out as possible.
Technical analysis offers that system. It's this logical, "black and white, take on the market that we think offers you the best shot at long term profits of the monetary and emotional variety.
QUESTIONS ANSWERED
COMMENT: I'd appreciate it if you would provide commentary based on your data and leave GOD out of the discussion. For those of us that feel that the whole concept of GOD is not only ridiculous but detrimental to our society, having you write about "him" doesn't add to my confidence in your service. REPLY: The commentary you refer to was our reply to one of our members. If you go back and read our reply you'll see that we use his comments about God as a springboard to a discussion on why folks should be diligent with their portfolios. If StockPickReport were to become a forum for "religious" discussion for the sake of religion, I would be the first to complain.
COMMENT: I like to buy long term leaps and at support or on some kind of buy signal. When the stock goes up to resistance or a sell signal, sell a covered call on the leaps and as it goes back down to support or again a buy signal, I buy the covered calls back and repeat the process. I need a reliable program (realize that nothing is 100%) or service that I can get these signals or alerts. Can your service or software help me. REPLY: Our stock ratings are our best effort at finding entry or exit positions. When a stock is rated "strong buy" that signals that we believe it is at a better entry spot than exit, and vice versa.
COMMENT: Is there a way to monitor how your picks change from day to day? REPLY: Our ratings change based on underlying technical indicators. As those indicators change, so do our ratings. If I had to estimate, I'd say a stock rating will change once ever couple weeks or maybe twice. But, the "strong buy" or "strong sell" ratings (which are the most important, in my opinion), come more like once a month.
COMMENT: You make a very convincing argument about a potential upcoming bear market. What do you suggest we do with our 401k investments? Should we move it to cash and wait then buy low? In my investment experience (the little I have) that if you stay the course, in the long term you will earn your 8% - 10%. Certainly while in a bear market watching your investment balance dive is gut wrenching, conversely watching your investment balance grow as it did the latter part of this year is a great feeling. REPLY: We believe that if you want to remain in the market you should sell calls on the stocks you own. If you are happy with returns of 10%, we'd find an "in the money" call that would give us at least a 10% cushion if the stock dropped, AND provided at least a 10% profit if you are "called out". Regarding your specific 401k, I cannot speak to that issue. I don't know what stocks you hold, when you bought them, or any other key elements. The bottom line is that if the market pulls back, we think all traders would be well served to have CLEAR stop/loss targets in mind. If you don't want to sell, then, at least sell calls on your long-term holdings. Any options trades need to be made with an educated perspective, and that is why we recommend a book like "All About Options".
COMMENT: Why is it that some stocks for example LU seem to trade everyday in real heavy volume but only go up a few pennies or down a few cents and they seem to close right where they opened? LU is usually the volume leader on the NYSE almost daily. REPLY: That's a great question. The key to the answer is the volume on the stock. Lucent has 4,200,000,000 "shares outstanding". They have 4,000,000,000 of them as the "float" (stocks available for public trading). The average daily volume for LU is around 50,000,000. Now, that may seem like a lot of shares, but it's only 1.1% of the float. So, even though there may be a ton of shares traded, those trades are really people "getting out of" or "getting in to" positions. The number of buyers and sellers - although large - is so even on some of these large-cap stocks, that it sometimes takes HUGE volume to move the stock price.
COMMENT: What do you mean when you say, "Sell calls on stocks you plan to hold longer than a month. Let someone else's 'risk capital' protect your profits. REPLY: Super question. If you buy a stock at $10.00, and that stock goes down 10%, you will lose 10%. That's easy to see. Yet, if you sell an option to someone else on your stock at a $10 "strike price" and you sell that option for, $1.00, you will have gained 10% "up front". Now, if the stock drops 10%, you are "covered" down a full dollar on your stock. Meanwhile, the person that bought the option from you is down close to 100% because - depending on the time factor - the value of the option they bought from your for $1.00 could literally go to ZERO.
COMMENT: What does it mean when you say, "Sell puts on stocks you want to buy at lower prices. If you want to buy a stock but not at current levels, why not sell a put?" REPLY: If a stock is at, for example, $35 and you want to buy it at, for example, $30, there may be folks who will pay you an amount to give them the right to PUT the stock in question to you at that $30 price point. Why would someone do that? Well, the person that you sell the "put" to may have bought the stock in question at $25. They want to protect them selves in case the stock drops. If you sell them the right to "put" the stock to you at $30, and the stock drops to, for example, $28, they can force you to buy the stock for $30 - even though the stock's price at the time might be $28. Why would you want to do this? Well, let's say you wanted to buy the stock at $30 anyway - you decided that already - and the stock drops to $30. Well, you were going to buy it anyhow. The money you made selling the "put" is just "icing on the cake". In other words, you got paid to do something you wanted to do anyhow. Of course, there are nuances to this strategy that you should read more on, but this is the basic idea.
COMMENT: Can you help me figure out what these puts and calls are, and what I should do with them? REPLY: A "call" is when you sell someone the option to "call" you out of a stock at pre-determined price, on or before a pre-determined "strike" date. A "put" is when you sell someone the right to "put" a stock to you at a pre-determined price on or before a pre-determined "strike" date.
COMMENT: What is the main difference between "STRONG BUY DAILY" AND "MOMENTUM/SWING TRADES" services. Which is better? REPLY: These services serve two different purposes. The "Strong Buy" service gives you a list of all NEW "Strong Buy" or "Strong Sell" stocks for the next trading day. The "Swing Trade" service makes specific picks and offers targets and stop/losses for those picks. If you like to find stocks yourself, you might like the "Strong Buy" service more than the "Swing Trade", and vice versa.
COMMENT: Any past Trade examples or performance? REPLY: We do not make claims regarding performance or win/loss or anything like that. The reason is that there are too many ways to lose money on a stock that goes up and too many ways to make money on a stock that goes down. We cannot control how any of our members trade, so we can't get involved with anything more than the price action a stock we pick makes after our rating or pick. To that end, you will find a 30-day history for any stock we rate in your members only ratings.
COMMENT: Do you provide any recommendation/alert based on live/daily "NEWS" (positive or negative)? I notice daily share prices move mostly based on news. I have access to streaming news. But I get lost to figure out which one will drive stock prices up or down. REPLY: We believe that "news" is, more often than not, born out in the "numbers". Trading on "news" is so reactionary and emotional that we don't recommend folks do it.
COMMENT: Do you have any search tool to search for equity rated "Strong Buy", "Strong Sell" etc.. REPLY: If you'd like to find our most recent "Strong Buy" or "Strong Sell" recommendations, you should try a free trial to the "Strong Buy" service. That's the best (and, quickest) way to get the stocks you're looking for.
For More Commentary Go Here: http://www.stockpickreport.com
WHAT THESE RATINGS MEAN:
StockPickReport.Com ranks stocks with technical analysis. These ratings do not indicate a "long term" view. These ratings reflect an opinion for the short term. These ratings may change based on market conditions.
ABOUT STOCKPICKREPORT.COM:
StockPickReport.Com is a stock research firm. Their daily commentary is regular and distributed worldwide. They are Registered Investment Advisors. They do not accept third-party compensation to make stock suggestions.
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"Our analysis is issued solely for informational purposes. We do not offer to sell or buy any stock. This report does not regard your specific investment objectives, financial situation or particular needs. Our information is based on sources we believe are reliable but are not guaranteed by us as being accurate. We do not purport to offer a complete statement or summary of the available data. Any opinions expressed herein are statements of our judgment as of the date of publication and are subject to change without notice. Reproduction without written permission is prohibited."
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"SPR does NOT guarantee any stock will go up OR down. Information published by SPR or emailed to members is opinion and opinion only. We believe our information is good, accurate, and helpful. Traders should (in our opinion) make "buy" or "sell" decisions based on variables including (but certainly not limited to!), experience, portfolio size, risk-tolerance, and current market conditions -- none of which we can determine."
StockPickReport also offers a proprietary stock-picking software suite. Interested investors should visit: http://www.stockpickreport.com/article.php for more details.
If the links to our ratings above do not work, please use these:
Amazon.com (NASDAQ:AMZN) -- WEAK BUY
http://www.stockpickreport.com/abrating.php?sym=AMZN
Sprint FON Group (NYSE:FON) -- SELL
http://www.bigtimenews.com/sp500/FON-Stock-Quotes-News-and-Research.php
Level 3 Communications (NASDAQ:LVLT) -- SELL
http://www.stockpickreport.com/abrating.php?sym=LVLT
Atmel Corporation (NASDAQ:ATML) -- WEAK BUY