Historically, the best time to be a buyer of stocks is when fear, panic and uncertainty riddle market psychology and send stocks to discount prices. As traders' emotions constantly shift, it can be especially hard to time when to take profits.
Each week I write a Rocket Stocks column and compile a Rocket Stock portfolio in which I try to identify stocks that could move much higher in the coming week, no matter how the market does. These Rocket Stocks picks are primarily for people who like to trade around market-independent catalysts.
Prudent investing involves taking profits, and with the market up 550 points in two days, that is exactly what I am recommending with this week's picks.
I recommended Deere (DE - Get Report) as a play off last week's broad selloff. Deere delivered a huge quarter last week, reporting earnings that handily beat even the highest Wall Street estimates. While shares were up, most investors and traders were preoccupied with the market selloff and did not give Deere the respect it deserved. With the stock now up nearly 7% since I wrote about it Monday, I would take profits.I also featured E*Trade (ETFC - Get Report), which was down as much as 10% on Monday. Early this morning the company announced a $2.55 billion capital infusion from a group led by Citadel Investment Group. Mitchell Caplan has stepped down as chief executive officer, and Jarrett Lilien has been named acting CEO. The news of the investment sent shares soaring in premarket trading. The stock is on track to open about 15% higher from where it started the week. I would definitely lock in a gain on this one. I also talked about Google (GOOG), as a new ad pricing would help its revenue. Thanks to a few analyst upgrades, Google shares are up 1.8% since Monday. I would lock in that gain. For an additional pick this week, I would be a buyer of the Ultra Short Oil and Gas Pro Shares (DUG) for a short-term trade. With oil down a quick $6 in the past two days, this exchange-traded fund has hardly moved. I have also noticed some inefficiency with its price movements compared to crude and natural gas. For the rest of this week's picks, check out the Rocket Stocks for the Week of Nov. 26-30 at Stockpickr.com.