Sunday, December 22, 2013

12/23/2013 Week Watchlist (6 stocks)

Market: $SPY has started setting up for the Santa Rally following the Fed's decision to taper its stimulus to $70B/mo from $80B/mo so expect very bullishness in the weeks ahead. However, I think Monday is a good time to hedge your position, as there is always a slim chance that the market could sell-off as people lock in profits on a very strong year in the stock market, which is up well over 20% in 2013.


JPM - banks are cheap and JP Morgan Chase Bank leads them. Banks are good sympathy plays off the Fed taper. I bought a starter position in JPM at 57.5 in $60Mar14 call options and expect to at least double up my position this week. Price target is 62 in a few weeks time.

AAPL - Apple Inc. is officially working with China Mobile (CHL) in a deal that will bring iphones to over 700Mil new users in China. That is a big time revenue growth potential for the most valued company in the world. AAPL is headed for $600/share + more. I am very bullish AAPL this week. I am looking at a 552 entry point with a stop hard stop at 544. I do expect a big gap-up on this CHL news.

SYY - Sysco Corp.  is a growth stock that just merged with US Foods (also a growth company) in a deal that makes the merger an efficient one that will save the company money in the future. SYY only paid for US Foods at the equivalent of P/E 10. SYY has P/E 21, so this deal makes the new merged company much cheaper than it was prior to the merger. SYY's P/E is approx. 17 after merger, making SYY atleast 20% cheaper now. Therefore I see SYY valued at $42, which is near the highs it gapped up to on the day it announced the merger. I am looking to buy this bottoming price action. My entry point is 36.6 with stop-loss at 36.2. Upside to 40-42/shares.

GE - General Electric just reported that they expect significant growth in organic industrial sales to help the company sales grow 5% in 2014. GE is a growth stock trading at a fair value currently, but its slightly undervalued looking forward. So I think this is a good time to buy the company ahead of the street pricing in this forward growth. My entry point is above the 52week high at 27.5 with stop-loss under 27. Price target is $29/share.

FNMA - believe it or not this Fannie Mae is recovering from the financial crisis and is currently undervalued looking forward as the entire finance sector continues its recovery.  I am watching carefully for a 3.50 breakout. The stock could rebound with plenty of upside. I've see short-term upside to $4-5/shares and long-term upside to $7/share. I've got a hard stop-loss under 2.90.

TWTR - Twitter is a good play off the tech sector strength lead by AAPL. TWTR has plenty of upside as the bubble continues to brew on this fresh ipo and growth stock. Thanks to the overall market breaking out and the big AAPL/CHL deal carrying the tech sector, TWTR should make big moves this week following four consecutive bullish weeks for the stock.

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