Updated from 6:19 a.m. EST
Due to capital constraints, time limitations or merely life getting in the way, most people simply cannot trade frequently enough to make most trading strategies work, and that is why I am writing this weekly Rocket Stock column.
My main goal is to find stocks that can rise in the coming week, no matter how the market moves. I like to look for snapbacks, earnings plays and other trades that have catalysts behind them. Here is this week's
With the all-important Federal Reserve meeting on Tuesday, this week's Rocket Stocks certainly can move in either direction. Although it is widely suspected that the Federal Reserve is going to cut interest rates by 25 basis points on the 11th, I wonder how much of this is built into market expectations. What could be more important is what
says on the 13th when it reports earnings. So I adjusted this week's picks accordingly.
But before I make any new recommendations let's quickly review how
last week's Rocket Stocks
- KBR (KBR) - Get Report: Up 8.1% for the week.
- OfficeMax (OMX) : Up 7.2%.
- EMC (EMC) : Up as much as 4.6% but was a sell in the midweek update for a 1.8% gain.
- Cabot (CBT) - Get Report: Up 2.1%.
- Amazon.com (AMZN) - Get Report: A midweek addition that rose 1%.
- Eastman Kodak (EK) : Flat for the week.
- On2 Technologies (ONT) : Flat.
- Cemex (CX) - Get Report: Essentially flat.
- Gartner (IT) - Get Report: Essentially flat.
- Tesoro (TSO) : Down 3.8% for the week.
- American Eagle (AEO) - Get Report: another midweek that rose just 0.8%.
- Research In Motion (RIMM) : down 5.3%.
Now let's look at
First up this week is
. It handily beating earnings estimates last quarter and has zero sub-prime and alt-a loans on their books, making it very attractive. Shares could rally regardless of the Federal Reserve's actions as investors and traders are looking to own the financial stocks into year's end.
Weekly Catalyst: Trading above its 50-Moving Average, I believe State Street could easily take out its 52-week high of $82 this week.
Next up is
. With fellow exchange
making a new 52-week high almost every day, it's absurd that the ICE is not over $200 a share. With recent volatile in commodities and options, trading volumes have exploded, adding to ICE's EPS. Not only does the ICE offer derivatives/commodities trading, it also is a futures-based exchange, making it highly attractive as a potential takeover target.
On the more speculative side, I like
. Meritage Homes is a stock I have highlighted before, back in September, as one of the best positioned homebuilders out there (if there really is one). Management has weathered the housing slump and consistently written down assets. There has been a massive amount of insider buying since August; a total of $14.6 million worth of stock has been purchased by a variety of insiders.
Near its 52-week low and with a massive short position, I think this might create a great trading stock ahead of the FED meeting. In general, short-sellers tend to overcrowd these beaten-down stocks and with 43% of the float sold short, I think it could rocket higher.
Another stock I still like is
. The tech giant is having a terrific holiday this retail season. As sales of both desktop/notebooks are exceeding even the highest estimates, shares are looking attractive again. In another genius move, Apple last week opened its third store in Manhattan. This store, strategically located on West 14th Street, could be a huge boost to the company's bottom line.
For more detailed analysis and the rest of this week's picks,
As always, to find the snapbacks and potential breakouts on a regular basis, check out these Stockpickr portfolios, which I use in my own research each week:
- Today's Hot List: This daily list is a must-view every midday to see what stocks are making the biggest moves and why.
- Always check the Biggest Percentage Losers, a list of stocks that lost big the day before, because they can snap back hard. When you check this list on Stockpickr, you can see which stocks are owned by the quality hedge funds and mutual funds. Pay attention to those. They will be buying at the lower prices, so you should be also.
- Ditto for the 52-week-low list. You must check the above two lists every day if you hope to find volatile stocks.
- Biotech Short Squeezes: Dendreon (DNDN) and others can often be found in this category.
- Stocks Rising on Unusual Volume: These are potential breakout stocks.
- Stockpickr's System Trades of the Day: These are trades triggering that day in various backtested trading systems we've developed.
- Stocks With Unusual Option Activity: Perhaps someone knows something?
- Latest Activist Situations: These are beaten-down stocks that hedge funds are accumulating shares of and demanding change in. Believe me, these hedge funds piggyback each other. And once they start rocking the boat, things happen quickly. This should be on your must-view list.
One final place to frequent is the
section on Stockpickr, where ideas such as those presented in this article are thrown around daily.
At the time of publication, Altucher and/or his fund had no positions in stocks mentioned, although positions may change at any time.
James Altucher is president of Stockpickr LLC, a wholly owned subsidiary of TheStreet.com and part of its network of Web properties, and a managing partner at Formula Capital, an alternative asset management firm that runs a fund of hedge funds. He is also a weekly columnist for
The Financial Times
and the author of
Trade Like a Hedge Fund
Trade Like Warren Buffett
. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Altucher appreciates your feedback;
to send him an email.
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