April is Normally A Good Month and Transport Value Stocks
As MR detailed last week, we remain bullish as long as the uptrend channel is maintained. In addition, any pullback that breaks the uptrend channels or the 20 SMAs needs to hold the key market breakout levels to avoid a larger correction. As a reminder, they are 13,000 on the DJIA, 3,000 on the COMP, and 1373 on the S&P 500.As stated in Wednesday’s newsletter, MR believes that our forecast of reaching above 1,430 sometime in April is still possible based on the chart technicals from above and based on historical market statistics for April. We showed statistics in Wednesday’s newsletter that April has been the best month for market performance in the most recent years and over the past 40 years.
Furthermore, most of the time, institutions and funds put money to work near the end of quarters and also at the beginning of a new quarter in a positive market. That should help these markets push higher in the next few weeks.
At this point, it is not clear to us what news would cause more than just a small pullback if one does occur. China’s data was somewhat of a setback for commodities and for the emerging markets but that is probably just temporary. They are still growing well above 7% and many of their underlying stocks are developing strong bases for future moves up. The only wildcard in the near term would be an escalation of the rising Spanish yields which could put some European debt fears back into focus.
Some of MR’s technical indicators point to a minor correction this week but our stance remains bullish based on the expected buying to close the month and to start April.
Transport Value Stocks:
Many commodity stocks in materials, energy, and agriculture and related stocks in railroads and shipping are still at some very attractive valuations. The statistics so far coming out of the US in 2012 are much better across the board. China’s growth is slowing but it is still above 7.5%.This is the fifth and final list of stocks in our investor series on value stocks in the commodity related sectors.
We are finishing with a focus on transport stocks and specifically on railroads and shippers. Many of these stocks have both significant income and capital appreciation upside. This is an excellent investment opportunity to pick up some of these stocks at real bargain prices if you hold them for 12 months or more.
Transport Value Stocks:
Transport Value Stocks Video:
Gold and Silver:
Gold and silver are still holding their longer term trendlines and are actually tracing out bullish inverted Head and Shoulders patterns. These are strong patterns for big moves up if they play out and our recent blogs support higher prices later in 2012. It may take some patience in the short term with some choppy price action but scaling in on weakness is still prudent for long term investors in our opinion.
MR published a blog on Gold and Silver Mining Stocks - Time To Buy The Hated Gold Stocks and Silver Stocks
Long Term Treasuries:
Also, we wrote a very important blog in February about how the Long Term Treasury Bond yields could only go up. Look to buy the TBT (Ultrashort Treasury) for bigger gains this year.
MR is looking into ways to take advantage of the Facebook IPO ahead of its big day. We have identified at least one public way to buy some Facebook exposure by buying SVVC (Firsthand Technology Value Fund). They are an investment fund that has purchased 600,000 shares of Facebook’s Class B common stock and also own some stock in YELP. MR purchased some shares several weeks ago near $25 and it has run up quite a bit recently. Therefore, waiting on a pullback would be advisable. It is also a very illiquid stock (low volume) so only use limit orders and wait for a quiet buy period during the day. It might be worth some speculative money as an investment. We will also keep you posted on other Facebook plays as we find them.
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