Market bottom in for now?
Coming amidst extreme bearish sentiment readings and oversold technical levels, last week’s positive market price action suggests that an intermediate-term bottom of some sort may be in place. Whether this proves to be consolidation in a larger decline, or something more bullish remains to be seen.
New positions
Southern Copper (PCU) – On Thursday I sold some March 17.5-strike covered calls against my long position in PCU (purchased 10/20/08) as the stock continued to rebound from its recent lows along with the rest of the market:
PCU is in a strong short-term uptrend, but – like the market in general – it will take more upside strength and/or time for its intermediate-term picture to similarly improve. That said, more upside seems likely over the coming days/weeks, with resistance at the 16-17 level. However, I wanted to sell the calls while option premiums were still very high, which generated cash in my account and significantly lowered my cost basis in the position.
Watchlists
The following stocks showed up on this week’s “upside strength” scans of stocks of interest, suggesting that they may be headed higher and may represent good buying opportunities on weakness: NTT DoCoMo (DCM).
In addition to many others already previously mentioned, the following stocks showed up on this week’s “oversold” scans of beaten-down stocks of interest, suggesting that likely further near-term weakness may represent a buying opportunity: Enerplus Resources Fund (ERF), General Maritime (GMR), Methanex (MEOH), V.F. Corp (VFC), and Williams Partners L.P. (WPZ).
