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1. Sold Walgreen After a Nice Six-Week Run
By Brian Gilmartin
12:11 P.M. EDT
We sold the majority of our
today after a nice six- to eight-week
off the low $20s. Walgreen will report April '09 sales next week and the stock is struggling here around its 200-day moving average and the downward sloping trend line off the October '07 high.
After putting in a double bottom in the low $20s in both October '08 and March '09, we bought Walgreen for a bunch of accounts and the trade worked well, for between a 15% to 25% gain in the last six to eight weeks. We remain long one low cost basis position from June 1997 at $12.66 per share.
We'd love to try and repurchase Walgreen on a retrace to the $25 to $26 area. The new CEO is doing the right things though; Greg Wasson has boosted margins, managed expenses better and Walgreen reported its
of cash-flow from operations in late March '09.
2. Whirlpool Up Big; Still Cautious
By Eric Jackson
11:31 AM EDT
Earlier this morning, I expressed surprise that
was trading down in premarket after it released quarterly numbers. With cost controls, the company posted a slight profit instead of a loss as the market expected. I expected a big rally, given how that kind of news has been received lately by the market.
Turns out, I was right. Whirlpool is up 19% this morning. This follows a pattern we saw in
on Friday and with other names this earnings season.
The question is: where do we go from here? I'm still bearish on Whirlpool for the rest of the year. There's a big difference in the rallies of Microsoft and Whirlpool. The former has a pristine balance sheet and has been (arguably) unfairly beaten down on bearish sentiment; the latter has a daunting balance sheet and future challenges to revenue growth even if housing makes a comeback.
Whirlpool has $146 million in cash and $2.6 billion in debt. Pension obligations are still formidable. Its dividend could be at risk. I would be careful.
3. Qualcomm Breaks Out
By Gary Morrow
11:06 AM EDT
is trading at new highs for the year with the help of this morning's 6% gain. Investors must be very pleased with what they are hearing on the
The stock began the day with a powerful gap higher open that carried it above its early April highs. Volume is running very heavy as well and is already above half of the daily average. This surge in trade has pushed Qualcomm above the upper trendline of a four-week bullish pennant the stock has been trading in since the beginning of this month.
Given the fact that the stock has rallied over 30% from its multiweek lows last month, waiting for a pullback to support would be a safer strategy than chasing Qualcomm now. Solid short-term support is in place between $41.00 and $42.00. A light-volume fade back down to this area would provide a low-risk buying opportunity. If Qualcomm closes back below its 200-day moving average, currently at $40.00, the breakout this week would be in trouble.
4. Closed-End Funds Warning
By Daniel Dicker
8:53 AM EDT
Recently -- and quite out of the normal modus operandi -- I've noticed that the closed-end funds for equities have displayed an interesting "indicator" almost like an oscillator.
The largest of these funds have moved quickly from large discounts to net asset value to having very pricey premiums. The last time this happened was a very bad sign for the market in general.
Alpine Dividend Fund
displayed an 8% premium two trading days ago and has started to retract, showing a 5% premium this morning -- this after rallying from a 15% discount concurrent with the March lows in the
The last time AOD showed this level of premium was late December 2008 -- and the subsequent action over the next three months in the market wasn't pretty. Other close-end funds show similar patterns.
Not conclusive by any stretch, but another interesting indicator out there this morning.
5. Swine Flu Stocks
By Adam Feuerstein
12:15 A.M. EDT
I find it a bit distasteful to be talking about stocks that may benefit from the swine flu health emergency, but here goes:
sells Tamiflu, one of two antivirals used to treat the flu.
receives about a 20% royalty on Roche's Tamiflu sales.
sells the other flu antiviral medicine, Relenza.
Long Gilead in the BioTech Select model portfolio.
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This article was written by a staff member of RealMoney.com.