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1. Apache Extends Breakout
By Gary Morrow
1:56 P.M. EDT
Despite a huge drop in commodity prices,
reported a strong first quarter. The stock was up 5% following yesterday's release on very heavy trade.
The shares began Thursday with a powerful gap higher open that lifted them above a six-week base. The consolidation pattern Apache has left behind began in mid-March as bulls picked up shares at a very heavy pace for eight straight days. Apache rallied 20% during this period before topping out at $70.00 on March 19.
Until yesterday, this high held numerous times as the stock moved sideways in a narrowing pennant formation. Now that this base is in the rearview mirror it will now serve as a strong support level. A dip back down to the $70.00 area would be a low-risk buying opportunity.
On the upside, a logical near-term target would be Apache's 200-day moving average near $81.00. Apache has not traded near its 200-day since the beginning of the September collapse. I would expect some significant supply here.
2. The Two Dows
By Tom Au
1:46 P.M. EDT
One reason I had earlier predicted a 3,000-something
was because there really were two Dows: a "3,000 to 5,000" Dow consisting of the banks, phone companies, drug companies and cyclicals, and a second Dow that was more like a 11,000 to 13,000 Dow, consisting mainly of consumer staples, with some techs thrown in. They just happened to "average" 7,000 to 8,000.
But it's easier for an index to collapse when there is a two-tiered, "Nifty Fifty" type market, because all it takes is for the higher tier to fall to the level of the lower tier. It's much harder if most stocks are moderately priced.
Surprise, surprise. As Robert Marcin pointed out, the top-tier consumer staples haven't done beans in this rally (although the techs have). But the 50%-plus gainers (off the bottom) have mostly come from the bottom tier, like
The silver lining is that if the Dow does go down to a three-handle, it would be followed by a rally of this sort across the board, rather than in a handful of names.
3. Stress-Test Delay and Bank Play
By Bullish Bankers
1:05 P.M. EDT
and the U.S. Treasury just released a statement regarding releasing stress test data. They are now moving back the release date from Monday to sometime Thursday afternoon. I am very concerned with
Bank of America
and their discrepancies with their respective results.
I also think you are going to see regional banks under-perform the large commercial banks next week in anticipation of the results. Go long the
SPDR KBW Bank
and short the
SPDR KBW Regional Banking
4. Anchors Away for Shippers
By Erik Jackson
12:29 P.M. EDT
All the dry-shippers are having a great day based on
positive quarter announced yesterday after close. DryShips was profitable not including other items (kind of like
was profitable recently).
The stock is up 17% today to $8.68. This was a stock trading in the $2s in early March on debt concerns, but its 52-week high is $116 -- pass the Dramamine. The debt for DryShips is too high for my liking.
The other shippers are up in sympathy including my favorite:
. TBS reports its earnings on Wednesday.
5. My Market Strategy
By Jason Schwartz
11:07 A.M. EDT
My post's have been limited lately due to my Lone Peak Asset Management obligations so I want to clarify my latest stance as readers have been emailing me regarding my takes.
1. As an economic timing investor, this is the stage when I want to be fully invested. This will continue as long as the economic data is showing improvement in its rate of change.
2. I loved the banks off of the bottom. I don't love them as much anymore. I am out of individual names and hold a small position in the
Financial Sector Select SPDR
. Any company that has Obama's money scares me. Market-to-market didn't eliminate dilution because of the regulators new focus on tangible common equity. I don't like dilution.
3. I am taking my bank cash and averaging into technology. I love this sector going forward with stimulus on the way. I especially love
with the Media Tablet coming. I think this product is a major game changer, even more so than the iPhone.
4. I am not a day or a week trader. I consider myself a mid-term investor. To me,
, and economic timing is the way to go.
5. The name swine flu scares me more than the actual virus. I am watching this very carefully. I know we've cried wolf in the past but one of these times the wolf will attack. Today I'm not worried but my eyes are open.
Happy May Day!
Long AAPL, XLF and QQQQ.
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This article was written by a staff member of RealMoney.com.