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| PRIME
STOCK NEWSLETTER FOR OCTOBER 14th, 2005 |
Position
Statement: In our Prime
Recommendation Letter we attempt to identify the
recommendation with the highest probability of
moving higher. We recommend that stop orders
be placed at the time of purchase, and once
the position has moved profitable we recommend
a stop be placed a minimum of $0.25 above the
purchase price and moved higher as the position
moves higher. |
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Today’s Comments: The overall
market finished the market mixed with the Dow
Jones Industrial Average and the S&P 500
finishing the day lower while the NASDAQ finished
the day slightly higher. The strongest sectors
on the day were the Biotech, Semiconductors,
Airlines, Technology, Banking, Interactive,
Healthcare Providers, Chemicals, Insurance,
Pharmaceuticals, High Tech, Retailers, and Consumer
indices. There was weakness in the Natural Gas,
Utilities, Oil & Gas, Commodities, Gold/Silver,
Broker/Dealer, Telecom, and Internet indices.
The various sector indices I track appear to
be entering areas of support, potentially signaling
that the recent slide in the market may be coming
to an end. Heavy selling continued in the oil
& gas sector, or put another way; big money
was moving out of those stocks. The vast majority
of the heavy volume stocks I looked at continue
to look weak. Many of these stocks are beginning
to look significantly oversold. This leads me
to believe that we may see a rally at any point
in the near future. Of course this could all
change if the market is down big today. Keep
in mind, my 1st Rule of Trends; a trend remains
in place until it is broken. The Bottom
Line: The overall market should move
lower.
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Sterling Calendar for
October 14th, 2005
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| Date: |
Comments: |
| Oct. 14 |
Boston Scientific 'BSX'
reports earnings before the open. Est. $0.44 |
| Oct. 14 |
First Data 'FDC' reports
earnings. Time not supplied. Est. $0.61 |
| Oct. 14 |
General Electric 'GE' reports
earnings at 8:30am Est. $0.44 |
| Oct. 14 |
Knight Ridder 'KRI' reports
earnings at 6:30am Est. $0.66 |
| Oct. 14 |
United Health Group 'UNH'
reports earnings before the open. Est. $0.63 |
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Recommendation: Sell/Short
Trans Ocean, Inc. 'RIG' |
| Company:
Trans Ocean, Inc. |
Symbol:
'RIG' |
Closing
Price: $53.75 |
| Web
Site:
http://www.deepwater.com |
YH:
$63.11 YL: $33.70 |
Forecasted
EPS: $4.43 |
| Shares
Outstanding: 329 Million |
EPS:
$1.43 P/E: 38 |
Market
Cap.: $18 Billion |
| Dividend:
None |
Yield:
N/A |
Average
Daily Trading Volume: 4.7 Million
Shares |
| Price
Targets: $50.84, and then $46.42 |
Upside Stop: $54.53/share |
| Options
Rec.: November $50 Puts @ $1.55/contract |
Options
Symbol: RIGWJ |
Company
Description: Transocean, Inc. provides
offshore contract drilling services for
oil and gas wells. It contracts drilling
rigs and related equipment, and work crews
to drill oil and gas wells. The company
also provides integrated services. It
operates through two segments, Transocean
Drilling and TODCO. The Transocean Drilling
segment consists of floaters, jackups,
and other rigs used in support of offshore
drilling activities and offshore support
services. The TODCO segment consisted
of its interest in TODCO, which conducts
jackup, drilling barge, land rig, submersible,
and other operations in the U.S. Gulf
of Mexico and inland waters, Mexico, Trinidad,
and Venezuela. As of December 31, 2004,
the company owned and operated 93 mobile
offshore and barge drilling units, 32
semisubmersibles and drillships, 24 Other
Floaters, 26 Jackup Rigs, and 11 Other
Rigs. It serves the offshore drilling
markets in the United States, Gulf of
Mexico, eastern Canada, Brazil, Trinidad,
the United Kingdom North Sea, Norwegian
North Sea, Caspian Sea, Middle East, India,
West Africa, South Africa, Southeast Asia,
and Australia. Transocean is based in
Houston, Texas. |
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Our
Analysis: The shares of Trans Ocean,
Inc. 'RIG' closed below a key support
level on heavier than normal trading volume
yesterday. This is a bearish trading signal.
The shares of 'RIG' have been in a downward
trend since early October. They should
continue to move lower and test $50.84/share,
the point from which they gapped higher
on the open of trading on June 9th of
this year. If the shares of 'RIG' close
below that level then they should continue
to move lower and test $46.42/share, the
point from which they gapped higher on
the open of trading on May 24th. I see
upside resistance on the shares of 'RIG'
@ $54.15/share, and have my stops accordingly
@ $54.53/share. |
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| INDICES |
Dow
Jones Industrial Average (INDU):
Closed @ 10,216.59 Last Signal:
Called lower on October 5th with the previous
day's close of 10,441.11
Current Expectations: I am expecting the Dow
Jones Industrial Average to move lower and test
10,140.12 on a closing basis. |
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S&P
500 (SPX): Closed @ 1,176.84 Last
Signal: Called lower on October 5th with the
previous day's close of 1,214.47
Current Expectation: I am expecting
the S&P 500 to move lower and test
1,173.80 and then 1,154.05 on a closing basis. |
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NASDAQ
100 (NDX): Closed @ 1,533.80 Last
Signal: Called lower on October 5th with
the previous day's close of 1,595.54
Current Expectations: I am
expecting the NDX move lower and test 1,490.53
on a closing basis. |
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CBOE
Ten Yr Treasury Index (TNX): Closed @
4.475% Last Signal: Called higher
after the close of trading on September 12th at
4.169% Current Expectations:
This index should continue to move higher and
test then 4.491% |
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Stocks
Looking Higher |
IVIL, CVCO, JNJ, SBUX, JCP, AIG, MDT, USB
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Stocks Looking Lower |
AMDT,
XOM, CHK, QCOM, YHOO, CVX, VLO, SNDK, DUK, GOOG,
HAL, MO, COP, GS, RIG, CFC, ECA, BR, XMSR, MWD,
AA, EXC, APA, WMB, CAT, LEH, DVN, OXY, UPL, SU,
HLTH, NVDA, BA, COF, NOV, MRO, BHI, NE, LOW, EOG,
BA, AHC, NWL, FRX, CMX |
|
| Yesterday's
Edition of the Prime Stock Newsletter |
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