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By Ian Wyatt, Daily Profit |
USO | Jan 05, 2009 |
*****Inauguration Rally?
*****Oil prices
*****Graham Corp!
The first full week of trading in 2009 is off to dicey start. But after the recent gains, it’s not too surprising. At present, the Dow Industrials is range-bound between 8,000 and 9,000. And since the Dow moved over 9,000 on Friday, today’s sell off is not too much of a concern.
What will be interesting is how stocks trade as we approach Inauguration Day in a couple weeks. It seems highly likely that a sizable percentage of Americans will anticipate the progress that the new administration has promised. And I’d expect some of that good will to carry over into the stock market.
At the same time, however, the Dow is up against resistance already. And clearly, the serious economic issues facing the U.S. haven’t changed over the past few days. The Dow closed at 9,625 on Election Day, November 4. And I can see a certain symmetry of another move to that level on or around Inauguration Day. Though I’ll also say, and this is no slight to Obama, I’d sell Dow 9,625. And I will recommend selling some Daily Profit stocks if the Dow makes it that high.
*****Oil has rallied sharply since Israel and Palestine started going at it. It’s a tragic scenario, that’s for sure. And I, for one, certainly hope that a cease fire can be worked out soon. The casualties are so lopsided, Israel looks like a bully. And Hamas, with its impotent missile strikes, looks suicidal.
As for oil, at $47, I believe it’s approaching the upper end of its trading range. Right now, it’s higher due to supply concerns. But supply issues will fade. Higher prices won’t be sustainable until demand improves, and that could be a while.
The US Oil ETF (NYSE: USO) has been on fire since the day after Christmas. It’s up 24% since. In addition to supply concerns, I suspect there is some positioning going on that’s helping push it higher. Seems to me that some are betting on a rebound for oil sometime this year. Or at least, some investors are saying that $29 is just too low for the USO.
Either way, if you didn’t buy into USO when it was first mentioned in Daily Profit on December 19, I expect you’ll get a better entry point sometime in the next few weeks.
*****Graham Corp (AMEX:GHM) had a huge day on Friday, jumping nearly 18%. It’s up again today. Graham was first recommended in Daily Profit on November 21, 2008. It could have been had around $7.50. It’s now up 84% since then. Unfortunately, I haven’t heard from any Daily Profit readers who bought the stock. It’s too bad, as I’d love for you to be making money on it.
*****I offered up a few other TradeMaster stocks in the December 30 issue of Daily Profit, Optimer Pharmaceuticals (Nasdaq:OPTR), TeleCommunication Systems (Nasdaq:TSYS) and Shenandoah Telecommunications (Nasdaq:SHEN).
Of the three, only TeleCommunication Systems is up, and it’s only up slightly. But I have faith!
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