• XHTML Valid
  • CSS Valid
  • XML Feed
  • RSS Comments
  • Wordpress.Org
  • Powered by Technorati
  • Finance Blogs - Blog Top Sites
  • BlogBurst.com

Cutest Video Ever!


View my page on PickensPlan

Visit PickensPlan

Guest Post: TraderAlamo’s “OBAMA. Obama Backs All Manufacturers in America.” from FINZ.tv’s Blog

** I’m headed back to Utah for more medical tests this week. My partner in FINZ.tv, TraderAlamo, has stepped in for me with this great analysis of Obama infrastructure plays. TraderAlamo’s pick is Mexican cement-maker Cemex (CX), and he lays out a strategy for trading Cemex based on current technical conditions of the stock.  Welcome TraderAlamo! Follow him on Twitter! And be sure to sign up for the premier of FINZ.tv!

SCUBA. Self Contained Underwater Breathing Apparatus.

SNAFU, in military terms, simply meant situation normal, but American GI’s during World War II referred to SNAFU as Situation Normal All Fouled Up (I’ve cleaned up the word ‘foul’ a bit) to mock the U.S. Army’s penchant for acronyms. The trading community has always latched on to these acronyms as investing themes to identify hot sectors. BRIC, Brazil-Russia-India-China, was the dominant acronym prior to the slow-mo crash of ’09. In the absence of ANY monolithic trading themes, as the trend was simply DOWN, there has been a subtle theme to the rally in equities from the October panic lows.

OBAMA. Obama Backs All Manufacturers in America. The simple reasoning is the new President-elect’s potential creation of jobs via attention to the deteriorating U.S. infrastructure. (Aside: The boom of the 1920’s was the greatest building effort since that of Emperor Flavian’s Rule during the Roman Empire, and it was easily the most ambitious ever.) Sounds like I’m building to some fundamental thesis on where to invest, right? Wrong! This will only tell us what stocks to look at as trading vehicles. The fruition of this plan is not important to a trader, nor is its failure. What we are playing is the perception that traders will gravitate to the names that they feel may have some visibility going forward. The list of names to play include: CAT, JEC, TEX(think highways), SGR, FWLT, TXI, FLR, ACM(think overpass and bridge repair), X, CLF. Beyond these names would be cement, aggregate material or any company that could conceivably be contracted to repair, upgrade or construct any aspect of our infrastructure from roads to energy to electricity grids. Oddly enough, one name that could be flying under the radar as a beneficiary to OBAMA resides in our neighbor to the south, Mexico.

Cemex (CX) stealth Obama Play

Cemex (CX) stealth Obama Play

Cemex (CX) currently has an attractive daily pattern, and, with the world of cement manufacturers having merged dramatically, there are few pure cement plays. In all likelihood, we will not be able to produce all the cement for our infrastructure needs, and CX sits firmly positioned to benefit. We wanted to highlight this play on Thursday before Friday’s move as the intraday charts were perfectly aligned, but we were concerned about recommending names in a light volume environment. Notice the high volume reversal from early October then a retest that triggered a Grail buy signal (fancy name for a rare buy indicator). On Friday Cemex broke higher from a bullish flag(highlighted by blue line segments), but we are still concerned about volume as it decreased since the breakout. Also take note of the 50 day SMA as it has now turned up. With the market at an extreme overbought reading we remain cautiously bullish. This market would not be easy to play if it works higher from here because we would have to reach a bit for certain names. Ms. Market, however, loves to travel the path of maximum pain, so we would still be ready to attack longs via confirmed INTRADAY patterns. CX could potentially be headed to the 12-14 area to approach resistance if the market were to march higher from here. If the market were to pullback on lighter volume, we would look to the nature of the selling in CX to see if volume increased. A lighter volume pullback towards the 50 SMA would offer up a chance to enter a low risk high reward trade for the market’s newest acronym: OBAMA.

** For infrastructure sector analysis from the point of view of an engineer, read our own Jeffrey Lin‘s old post: “Subprime” NOT the headline from Honeywell’s quarter – Part 2: Strength in Energy, Construction, and Infrastructure
** Remember certain details of Jeffrey’s analysis have changed as the market deteriorated significantly since the time of the post. This is for reference only in order to obtain a general understanding of the sector.

Don’t forget to sign up for the Premier of FINZ.tv!

** Disclosure: no positions in the stocks mentioned as of 01/05/09, but positions may be taken as trades **

One Response to “Guest Post: TraderAlamo’s “OBAMA. Obama Backs All Manufacturers in America.” from FINZ.tv’s Blog

  • 1
    sniper
    January 6th, 2009 23:02

    I follow this guy on real money and twitter….he is one of the most forthcoming traders i have ever seen…great work and very keep to help others…cant wait to see what u guys do with that FINZ.tv…..best of luck!

Leave a Reply

For spam filtering purposes, please copy the number 8693 to the field below: