WHAT WE HAVE LEARNED FROM MARKET CRASHES

Today may turn out to be one of the worst market days in recent history.
We are keeping our eyes on securities that have the most resistance to the trend; in other words, track the stocks that hold their value while the rest plunge.  Soon enough these companies will present buying opportunities as the dust settles.
Meanwhile, hold on tight, it's going to be a rough ride!

Still Patient With KRO

About one month ago I expected KRO to continue its upward momentum and surpass the near term overhead resistance of 25.55, that event did not come to fruition.
The stock price retrieved and formed a small base at 22 before recovering and, in the past four trading sessions, it has crossed and maintained above the 50 day moving average of 23.54
Again, I look for this stock to test and breach the resistance level.  Trading this morning at 24.22, KRO shows some signs of resilience.
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Are You Ready to Gamble on EZPW ?

Painfully, EZPW opened this morning with a downward spiral.  Hitting an intraday low of 25.82 at about 11:00 am EDT; now, two hours into the trading day, with close to six times the average trading volume it is selling at 26.07.

The question is:  are we willing to take a gamble and buy into a possible over reaction looking for a correction and an oversold condition?  If you  believe in the "Dead Cat Bounce" theory, it may be worth taking a chance.

Cancel All Buy Orders on EZPW !

Yesterday EZPW stock looked promising.  This morning, after last night's disappointing earnings and future outlook, the price could see a 5.75% drop in early trading.
At this time I would take a wait-and-see stand.  Hopefully none of the readers jumped and went long on this one.

EZPW Looks Promising

We have been following EZCORP, Inc. (EZPW) for close to six months. During that period, our opinion on its future performance has improved thus giving us a buy signal.

EZCORP, Inc. provides specialty consumer financial services. The company offers pawn loans on personal property, including jewelry, consumer electronics, tools, sporting goods, and musical instruments.

The following are a few observations that may prove to be positive signs for EZPW:

Improving chart pattern
Stock price ready to rise above the 50 day moving average (now at 31.28)
P/E at 12 Average daily volume at 295,000 (a bit low for my taste)
Earnings pre share have risen for over the past seven years
Low debt

Selling this morning at 30.69, I feel this is a good entry point for the stock.

What's Next for KRO ?

Since November 6, 2011 we have seen KRO go from 22.67 to 24.84 (a 9.5% gain, not including dividends, in less than five months). The stock is now trading above the 50 and 200 day moving averages, the chart shows a nice base and slow upward momentum.

Within the next two weeks, I'd like to see the closing price to be above 25.55 which is the next resistance level, thus climbing to new eight month highs.

Very heavy short positions exist countered by long term insider buying. I am taking the insider's view and staying long on this stock.
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Have a comment, thought or question on a stock?

Feel free to bring up any findings or opinions, I'm open to suggestions and willing to look into any opportunities. Brainstorming is a way to learn from others and expand our views. Changing markets require constant adjustments.

Since most of us are not "experts" in the field, let's communicate in basic terms.

I would like to hear from you, just click on the "comments" link below and contact me. Our communication will be published in this blog or, if you so choose, it will not be posted.
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EBIX Gave Us a Good Run

Back on November 2, 2011 we saw a buying opportunity in EBIX (trading at 15.53).
After a nice run, a seesaw stock price behavior and an uncertain direction, I am pulling the plug.
Trading today at 21.85, the investment turned out a 40.7% gain in a period of just over four months; happy to cash in.
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Update on KRO

Waiting to see if KRO stock price crosses above the 200 day moving average (at about 23.68). If this materializes within the next five trading days, we should see wether or not this stock has legs and experience a sizeable pop. Trading today at 23.16

EBIX Performs as Predicted

In less than one month, EBIX has moved from 15.53 (see this blog 11/2/11) to over 21.00, that's a 35% return in in my book.

I am tempted to hold on to the stock provided it closes any day this week above 20.95, thus getting near a seven month high. Any significant rise in volume combined with an increase in price could trigger further buying to cover massive short positions.

We'll wait and see.
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KRO , a Stock to be Considered

Consistent insider buying over the past three months, coupled with an upside-down head-and-shoulders chart pattern, Kronos Worldwide, Inc. (KRO) has caught my eye.

Kronos Worldwide, Inc. engages in the production and marketing of titanium dioxide pigments primarily in North America and Europe.

Good trading volume, low P/E and adequate yield make this stock a fair prospect. It may be a bit early in the cycle but I am willing to inch into this opportunity, believing that a short term support level exists at 19.50 (closing on Friday at 22.67).
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More Comments on EBIX

The article in this morning's Seeking Alpha seems to go along with my earlier post.


2 Tech Stocks To Buy On Any Pullback

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EBIX Could Make a Turnaround

Having lost about 50% of it's value since March 24 '11, EBIX Inc.'s (EBIX) stock has found a base and could be poised for a rebound.

Ebix, Inc. provides on-demand software and e-commerce solutions to the insurance industry.

Here are some of the positive aspects:

1. 3 month support base at about 15.
2. Crossed and held above the 50 dma for 7 trading days; note that
yesterday it broke the pattern and, if not reversed, could retest
the lows.
3. Price support at about 15, limiting the downside exposure.
4. Adequate average daily volume of about 527 thousand shares.
5. Earnings have increased annually for at least 8 years, with a slight
decrease estimated for '12.
6. Forward P/E ratio is estimated around the mid 9's.
7. The stock is heavily shorted, so the bearish pressure could keep it
down for a while, or propel it on a "short squeeze".

Closing yesterday at 15.53, EBIX is a stock to be considered.
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Here We Go Again With AVT

What can I tell you? It has been a love-hate relationship with Avnet Inc (AVT).

Looking back at the notes of July 18, 2011, we saw continuing deterioration of AVT's price (then at 28.91). Soon after that date, on August 9 to be exact, AVT saw a new 52 week low at 23.69.

With good support at 25.00, it crossed above the 50 day moving average and had solid gains in the last four sessions despite an erratic and uncertain market behavior.

I am tempted to consider AVT a buy on a pullback between 26.25 and 27.50.
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Some Back Up Information on the State of the Markets

This article was published earlier today at cnbc.com, including observations by Jon Najarian whom I consider a very qualified commentator and investor. Something worth reading along the lines with my previous blog.

Nice to know that a knowledgeable advisor shares similar opinions.


Jon Najarian: Buy the Fear, Technical Signs Suggest Lows Hold

One Final Blowout

At this time, I'd like to see the S&P500 hold above the 1120 level and a final blowout like the one we are experiencing today combined with heavy volume. This action could be viewed as a healthy, and painful, purge of the markets.
We shall see if this holds true in the coming weeks.
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The Ongoing Bear Market May Find Support Soon

Alright, we are piling up paper losses and it seems like there is no end to this downward spiral.
Looking at the S&P500 chart, i see a hint of some near term support. Should the S&P500 index close at or above 1120 within the next two weeks, I would expect this point to be the bottom and we could see a turn around of the markets.
Look for stocks in the heavy construction sector to be the leaders in this cycle. Some of these candidates are: Granite Construction Inc. (GVA 18.20), Terex Corp. (TEX 14.32), Foster Wheeler (FWLT 21.40) and KBR Inc. (KBR 27.26) to name a few.
Extreme caution should be taken before going "all in" at this time, we must be very selective in our choices.
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The Bottom is Falling, the Bottom is Falling!

It appears that this is the one-two punch that we hoped would not occur.

With no significant support level in sight, I am not sure how long this free fall will continue. One thing is certain, the markets are oversold and there may not be too many sellers left holding securities. Simply put, an oversold market could be recognized when 80% or more of the stocks have dramatically fallen below their 200 day moving average.

Thursday's rout left us numb, Friday's see-saw behavior eliminated those who placed "stop loss" orders and today's trounce could have weeded-out many of the willing and unwilling sellers remaining. Meanwhile, a serious blow has been inflicted to our markets.

Questions remain:
Are we near the next bottom?
Have we seen the worst of it?

After the dust settles, the few left standing will get to fight another day.
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Put Up Your DUK 's

While we are getting hammered in the markets, there is no evidence of a let up. Times like these are when traders start to look for signs of stock market capitulation as a signal marking the unpredictable bottom. Capitulation is associated with routs as investors “give up” on stocks entirely and move into less risky investments. What we would see is panic selling on big volumes while the crowd runs for the exits. Although it is usually brief and somewhat terrifying, true capitulation often means that the sell off has finally run its course, and prices begin to feel for the bottom.

To stick our necks out and go long in this environment requires great intestinal fortitude. With that mindset, I feel that a safer route at this time is to load up on Duke Energy Corp. (DUK).

Over the past twenty months, we contemplated DUK as a good alternative to the miserable returns that banks were offering through their CD's and savings accounts. DUK was mentioned in this blog's watch list on 12/1/09 when it was trading at 16.68; then on 6/30/10 we got serious and saw a buying opportunity at 16.10.

The yield that we receive from DUK at the present time is 5.40%, ex-dividend coming up in less than one week (8/10/11), the stock is trading at 18.25 and holding steady (down .20) in an uncertain climate.
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An Article With Some Merit

Just released, an article by Cody Willard:

http://blogs.marketwatch.com/cody/2011/08/04/time-to-buy-stocks/?reflink=yhoof

This young stock analyst has gotten it right several times in the past. I tend to agree with his opinion on the timing of the market. Only time will tell.
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