5 Stocks to Trade Into Year-End
WINDERMERE, Florida (Stockpickr) -- We're quickly approaching the end of 2010, which has turned out to be one of the most exciting trading years in a long time.
We've seen everything from European bailouts to quantitative easing, from a flash crash to
rally. Who would have thought we'd see so many different volatility catalysts happen all in one year?
For short-term traders like me, you can't really ask for more from the market. For
, it probably hasn't been all that fun due to the crazy volatility the market has produced this year.
Regardless of what type of you trader you are, there's no denying that a number of trends this year have produced great moneymaking opportunities. We've seen
bullish trends in the precious metals complex
, with gold, silver and palladium all outperforming. We've seen some great trends in stocks tied to
who haven't been taken out of the game by the slowing economy. Another area of the market that has produced big moneymaking stocks is the
, with stocks tied to the
.
The above trends were hot this year, and some will remain hot in 2011. As long as we continue to see more and more money printing through quantitative easing, then you can bet that precious metals will continue to be great investments. If
continue to gobble up smartphones and tablet computers, then the Internet tsunami trades will not stop anytime soon.
I think 2011 is going to be even more exciting for the markets -- keep an eye out for a future article about that. But before we even begin to consider the trends that will be
, let's dive into my
top stock plays to play into the end of the year
.
My take here is that the best way to play the market into the end of 2010 is to buy
that are already trending in the right direction and that have a catalyst to push their shares higher.
It's hard to think of a better market leader than iPhone and iPad maker
Apple
(AAPL) - Get Report
. This stock has been powering higher all year, a trend that shows no signs of letting up at the moment. Apple is up about 52% on the year, and with just a few weeks left in 2010, I think that percentage gain has plenty of room to increase.
As Christmas quickly approaches, Apple is going to be the go-to place for consumers who want to buy their friends and family cool technology gifts that rarely fail to please. Just think of all the ways that Apple wins as a Christmas play: the newest version of the iPhone for smartphone fans, the iPad for the new tech gadget wi-fi loving crowd, the MacBook Air for anyone who wants a new computer or laptop -- and let's also not forget the iPod, which combined with iTunes makes for a very popular and easy gift for someone who can't live without a vast library of music.
The iPad is going to be the real driver into year-end for Apple. This product is a must-have for tech enthusiasts, and it's reasonably priced between $500 and around $800. A recent research report from Gene Munster's team at Piper Jaffray said that Apple stores were selling iPads at a rate of 8.8 per hour on
. Munster thinks that Apple will sell 5.5 million iPads this quarter -- and that was his modest prediction. If the iPad is going to be as hot as I think it will be for Christmas, that prediction is going to be too low.
If you agree with me that Apple will make a great year-end trade, then either anticipate a
or wait for the stock to move above some previous overhead resistance at around $321.30 a share. If you want confirmation that this move will have legs if the breakout does occur, then look for volume on a move above $321.30 that comes in higher than the three-month average volume of 19 million shares.
Another great trade into year-end could happen with
Sirius XM Radio
(SIRI) - Get Report
, which is engaged in broadcasting its music, sports, news, talk, entertainment, traffic and weather channels in the U.S. for a subscription fee through its satellite radio systems. This stock has delivered a
so far in 2010, with shares up 128%.
I think that performance is about to heat up as consumers flock to this company for Christmas gift that will make anyone on the receiving end very happy. The company just hit a major milestone by achieving 20-million subscribers, a historic high. What's even more impressive about this milestone is that Sirius achieved the last 10 million subscribers faster than the first 10 million. The company also just signed a major deal with the National Football League, locking in the rights to broadcast NFL games for another five years.
Sirius is offering a number of holiday discounts right now, including free ground shipping on orders of $24.99 or more, and steep discounts on car receivers and its portable device, which includes a 30 day free trial all-access pass.
From a technical standpoint, the stock is currently consolidating in a tight range right above the 50-day moving average of $1.37 a share. As long as SIRI doesn't drop significantly below the 50-day moving average then the stock should setup nicely for a run into year-end that takes it back toward $1.60 a share or even higher.
What I love about the consolidation taking place in SIRI right now is that it's happening on light selling volume. This is exactly what you want to see when a stock pulls back after a big run. Keep in mind that there is some previous support at around $1.32 a share that could make for a great buying entry.
It's also worth noting that the company could ink a new deal with Howard Stern before the end of the year, which could provide another catalyst to send the shares higher.
Another great trend that will provide for a strong catalyst into year-end is the gift card trade for restaurants and popular clothing retailers. We all know that consumers love to get
gift cards from family members and friends for Christmas
since it allows them to enjoy the gift on their time, or pick out a product that is exactly what they want.
One company that should benefit big from the gift card trend is roaster and retailer of specialty coffee
Starbucks
(SBUX) - Get Report
. Starbucks is on top of the gift card trend. The company allows its customers to buy customized gift cards and track them with a downloadable app for their BlackBerry smartphones.
As I write this, shares of Starbucks are breaking out to a new
, and the stock has cleared some major overhead resistance at around $31.50 a share. I expect this stock to
into the year-end as traders flock to this name for a Christmas trade.
Two more companies that should do well off of the gift card trend are
Panera Bread
(PNRA)
and the
Cheesecake Factory
(CAKE) - Get Report
. Both of these
are marker leaders in the space, with shares of PNRA up 57% year-to-date and CAKE up 56% year-to-date. I expect consumers to flock to these popular eating destinations and buy up gift cards in droves heading into Christmas.
Cheesecake Factory is even running a holiday promotion that for every $25 you purchase in gift cards, you receive a free complimentary slice of cheesecake. Both stocks are trading near 52-week highs, and CAKE recently broke out above some previous overhead resistance at around $31 a share. Look for the trends higher in these stocks to continue into year-end.
To see more stocks that could run much higher into year-end, including the
The Buckle
(BKE) - Get Report
,
Limited Brands
(LTD)
and
Wet Seal
(WTSLA)
, check out the
portfolio on Stockpickr.
-- Written by Roberto Pedone in Winderemere, Fla.
RELATED LINKS:
>>Two Pair Trades for the Holidays
>>Rocket Stocks: Yum!, Costco, Travelers
>>3 Buffett Stocks Yielding Over 3%
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At the time of publication, author had no positions in stocks mentioned.
Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on stocks, options, futures, commodities and currencies. He is also an outside contributor to Beconequity.com and maintains the website Maddmoney.net, which he sold to Blue Wave Advisors in 2008. Roberto studied International Business at The Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany.