Three (More) Stocks Poised for a Santa Claus Rally: AIG, COH, HWD
I pointed out three stocks that were prime Santa Claus rally candidates yesterday, but I stumbled across three more today....Coach, Inc. (NYSE:COH), Harry Winston Diamond Corporation (NYSE:HWD), and American International Group, Inc. (NYSE:AIG). Here's a closer look at why these three names are more due than average to make big progress as we head into the end of the month (and year).
If I thought a near-term daily chart of Harry Winston Diamond Corporation would put my bullishness in perspective, I'd add one here. But, it doesn't, so I won't. I will direct you to this large-sized weekly chart of HWD though, since it tells the story so well.
In simplest terms, HWD is about to benefit from some slingshot-type of pressure after what has been more than two years' worth of consolidation (sideways) action, and after a year and a half's worth of converging wedge shape. As you can tell, Harry Winston Diamond Corporation shares have already moved above the upper side of the wedge shape (orange), and are on the verge of crossing above the horizontal ceiling at $14.47.
Speaking of weekly charts, American International Group, Inc. is on the brink of a big December rally based on its weekly chart as well. The exception is, AIG isn't getting squeezed out of a wedge or on the brink of punching through the resistance side of a long-term trading range. Rather, it's at the last bit of a cup-and-handle-shaped pattern. Once the brim of the cup (top of the handle) is crossed again, that should be it. And, given the way shares used the 200-day line as a regroup and pushoff point four weeks ago, there's plenty of life and longevity for any breakout once it materializes.
Better still, AIG can actually justify higher stock prices. Although the market was just killing it back in 2011 when it looked like the insurer was headed off a cliff, with a legitimate forward-looking P/E of 9.8, there's actual, tangible value for American International Group. Throw in the fact that the Federal Government's stake in the company is nearly liquidated and that the insurer has effectively streamlined, there's even more unrealized value here.
Last but not least, Coach, Inc. has been rocking its way out of a downtrend and into an uptrend for months, but didn't convincingly get over that hump until this week. Now that it has though, COH should find that rallies and progress are much easier to come by.
Undoubtedly you've been advised to buy COH this month because it's Christmas time, and since Coach bags are often purchased as gifts, the company is going to see a lot of revenue this month. That's not why I'm interested though. That may be why the chart of Coach, Inc. is firming up so nicely, which is fine, but I don't choose stocks based on the calendar. I choose stocks based on what the future looks like. And, now that we've seen so many bullish crosses of key moving averages, odds are good the media and most investors will start to interpret news in a bullish light rather than a bearish one. Either way, the stock's firming up right now after a long lull, and any marketwide bullishness could be huge for COH. 
James E. Brumley is a paid contributor of the SmallCap Network. James E. Brumley's personal holdings should be disclosed above. You can also view SmallCap Network's complete disclaimer and disclosure.
Do NOT buy or sell AIG, HWD or COH until you have read everything.
SmallCap Network provides comprehensive research and opinions on AIG, HWD and COH. |
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| Date: | June 19, 2013 | |
| Price: | Free | |
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Will High-Frequency-Trading (HFT) Bots Be The Fuel That Drives The Santa Claus Rally?
Well it would seem so from this really great blog post by Carl Weiss from sceeto, a high frequency trading expert. High Frequency Trading has been causing havoc for years in the financial markets. It was very interesting to if you look at a few weeks ago when President Obama was elected just how the markets or HFT’s showed their displeasure by plunging the market almost straight away on the news. Obama had talked about more regulation on Wall Street, were they trying to express their displeasure with the announcement? Check out the video here: http://youtu.be/N1ouo0aeO7o . The downward moves have been consistent right up to when the tops execs met with the President recently when, amazingly but I guess not surprisingly, the markets start to rally up, pushed by high frequency trading.
One would assume everybody at the meeting perhaps decided to play nice and try and lift the markets, especially considering all the negative talk about the fiscal cliff. I would tend to agree with Carl that indeed, High Frequency Trading will be the fuel that pushes a Santa Claus Rally as there has been a lack of downward HFT pressure the last couple of days, which is unique.Where the markets go after this is over, who knows, but expect High Frequency Trading to play a big part in it as always.
