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RIMM is due to report earnings this week, so be aware of that if you consider investing/trading in the stock or its options. Nonetheless, RIMM has made an impressive comeback since mid-August, which can be seen in the daily percent R readings heading ...
Share With the mid-point of September upon us and the market having another down month thus far, let's take a look at what big-name stocks are leading the way and which ones are lagging the field.
We ran a screen for optionable stocks with over $10 billion market capitalizations and average daily volume over 2 million shares. The top 20 and bottom 20 results, sorted by September's monthly performance, are listed in the tables below.
There's a wide variety of sectors represented in the best 20 performers in the first chart below. Communications and gold are the primary ones represented. Some of the bigger telecom ETFs are IYZ, XTL, IXP, and TTH. Gold ETFs are represented by, among others, GLD, GDX, and IAU.
We've included some core fundamental data in the table ? P/E ratio, dividend, EPS 5-year projected growth, and sales quarter-over-quarter growth (data from Finviz). One thing that stands out about the winning group in general is that all of these names show quarterly sales growth according to this data.
Performance-wise -- ignoring Motorola Mobility (MMI), which is in a takeover -- all of these names are up for the calendar year, or down less than double digits, except for 3: Research In Motion (RIMM), Sprint (S) and Ingersoll-Rand (IR). These 3 stocks are down significantly for the year, but also up nicely this month. I would consider them to be possible rebound momentum plays for those who enjoy bottom-fishing. We'll look a little more in-depth at the recent activity in RIMM later in this article.
Now let's look at the large cap liquid names that have performed the worst in September. Financials have a heavy presence in this list, especially foreign banks. Some leading financial ETFs include XLF, KRE, IYF, RKH, among others ? but keep in mind that these ETFs mostly hold US domestic stocks.
Looking at the listed fundamentals, there are some noteworthy differences between the winners list and the losers, among them the P/E ratio ? it's much higher on the list of stocks making gains. Dividends are higher among the laggards (dividend safety is always a concern that you should do individual research on). Sales qoq growth is more all over the board than on the first table.
But the biggest glaring difference to me is when you compare the YTD performance of the stocks in the 2 screens. While the September gainers are almost all "green" for 2011, all of the September biggest losers are in the red for the year. An object in motion tends to stay in motion in my experience ? directional trends tend to continue until clear confirmation of a reversal.
So RIMM and NFLX stand out as an interesting dichotomy of names ? RIMM being one of the most hated stocks recently by many, and NFLX being among the most beloved. Yet RIMM is actually rallying this month, while NFLX is moving lower. Let's examine what the actual trading action is telling us through the charts.
You can see below that Research In Motion's recent ascent began on August 11th, after a multi-month selloff that took the stock from above 70 to as low as the 21 area. RIMM is due to report earnings this week, so be aware of that if you consider investing/trading in the stock or its options.
Nonetheless, RIMM has made an impressive comeback since mid-August, which can be seen in the daily percent R readings heading above the 50 mid-level and into strongly bullish territory ? at this time we would anticipate that pullbacks are likely to be contained by mid-areas on percent R.
One logical upside target would be the 45 area, as this is roughly a 50% retracement of the February highs to August lows ? in my experience, 50% retracement rallies are a fairly common pattern, and represent both a Fibonacci sequence and a logical area where an upside rally within a down move could peter out.
On the other hand, we have Netflix, which had been on an explosive run higher for about a year and a half. This stock (and its valuation and future prospects) is one of the most widely followed and discussed among traders and investors.
You can see below that the uptrend in NFLX peaked in July, since which time it's been downtrending. A strong pattern of higher lows in daily percent R readings was violated, and percent R is now in bearish territory. Here we would anticipate that rally attempts will be curtailed by the middle-50 area on percent R. Rallies towards the top of the bands (Bollinger and acceleration) or at key exponential moving averages below that, are likely to fail in the near-term, but this also could eventually result in a choppy, volatile, sideways-trading range.
With all the talk of correlation in world markets and in various assets we hear nowadays, we're always on the lookout for both individual stocks and sectors that are charting their own course.
Looking at the outperforming and underperforming stocks and sectors can assist you in your trading and investing, whether you're a bargain value hunter, a momentum player, a breakout trend follower, a low-risk pullback-entry-point believer, a news event bookmaker, or a knife catcher ? whatever combination of fundamental, sentiment and/or charting factors you use in your asset allocating. And of course as always, do your own due diligence before investing or trading in any individual stock or ETF.
Share Email PrintComments (1)Add a comment Register or Login to rate comments » Sargeant Comments (211) Rim is taking everybody for a fool. Using bogus offshore channel stuffing to cover dwindling North America sales for a NASDAQ company suckering investors is not only scandalous, it's an outright scam akin to the Enron scandal. 14 Sep, 10:
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