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Prudential Powers Higher
By Gary Morrow
05/07/09 4:04 p.m.
is up 20% today following positive comments from Morgan Stanley. Volume is extremely heavy, and this will be the second-heaviest day of trading in the stock's history. This surge has pushed the stock well above its 200-day moving average for the first time since last September.
This the second straight day of big gains for PRU. Yesterday the stock ramped 15% after the release of its first-quarter results. Volume was heavy yesterday as well but is dwarfed by today's level. The massive wave of buying has kept the stock near its intraday highs, even as the broader financial sector has faded (
is off 4%,
is off 5%.)
PRU has strong support now in place near its 200-day. A retest of this level, just below $39, would be healthy pullback and a buying opportunity. The stock has a tremendous amount of momentum and should test the $50 area in the next few weeks.
By Paul Rubillo
So far the
plays are looking right. I wish I had let the
UltraShort Financial ProShares
play go a bit longer than I did. I would be looking at it more aggressively if we didn't have the monthly jobs number out in the morning. If we get some good news there, the market drop may be short-lived. I will likely be checking out of FO and JCP later in the day.
Watching some nice pullbacks in recent winners:
. As long as these plays stay down, the shorts can play.
Positions: Short FO, JCP, long GS, BLK on Dividend.com Recommended List.
Health Care Catching a Bid
By Jeff Bagley
05/07/09 12:48 p.m.
I see the countertrend rally, but it looks to me to be more of a mini-rotation into health care than anything else. Given that the sector has pretty much been left for dead in the recent rally, folks are noticing the value differential.
, for example, trades at a
cash flow yield of over 8%.
Meanwhile, I and other analysts in the area have had group meetings with two separate industrial-sector analysts over the last couple of days. Given the recent run, I get the sense that many buy-siders are loath to put money to work at these levels of valuation.
Most agree on China, the domestic fiscal stimulus, and that things will slowly get better. Many acknowledge, however, that it's hard to commit to long positions when all we have is stabilization of business (not growth), and much of that is due to a huge inventory drawdown in myriad channels. (Whether or not inventory replenishment drives above-average growth in the coming quarters is the $64,000 question!)
So for those that are underinvested, health care isn't looking so bad as a catch-up play. I understand that this could be short-lived, given all the uncertainty about lower health care spending, Obama, and the desire to catch the upturn in the business cycle. But unlike industrials and other sectors, health care is not experiencing year-over-year business declines of 15%-30%, although I would argue that's what the valuations are suggesting!
stock is making a great comeback and looks very interesting for a turn in the economy, I'm doing work on
for a potential long, and you have got to look at the health insurers, which while in the crosshairs of the Obama administration, trade like they are going out of business. They are the cheapest of the cheap, and I am doing a great deal of work on them.
Positions: Long ABT, SYK and a little GILD.
Market Strategy and Bank of America
By Jason Schwarz
05/07/09 12:18 p.m.
1. Obviously I love investing at this stage of the economic recovery, but today is not a day I am buying. In fact, I am selling down to raise some cash. If the market continues on, I'm fine because I'm still in, but what I really want to do today is reposition and be ready to buy on a pullback. The market has gone up on pretty much every employment report this year. Just when you're sure it will happen again...
Bank of America
investors see a much bigger picture than the stress-test capital raise. They see this as an end to the crisis and on to a beginning where this company owns the world. Every other American citizen is now a BAC client in some way.
Consensus opinion will tell you that Ken Lewis is a chump, but the opposite is true. He made some brilliant long-term acquisitions -- sure, he overpaid in the short run, but the short run is irrelevant. This big-picture point of view is what led me to write my "BAC going to $20" article back on Feb. 20 when the stock hit its low of $2.53. It is well on its way, and I wouldn't be surprised to see it far surpass the $20 mark as we approach 2010. Again, I wouldn't buy it today, but you need to understand the action. Don't be so confused.
Suggestion on How to Play Today
By Jim Cramer
05/07/09 9:37 a.m.
Here's how you play today, in my opinion: Each day the shorts and the profit-takers come in and give you a great moment to buy if you are patient. They have to do it; too much at stake. So when everyone sees that retail shouldn't be going up because it really isn't a surprise, the shorts sell em.
, and this is the big but, I think you have to buy them, because tomorrow numbers go up very big. So be mindful. I also think that
wasn't as bad as the bears think and sould not be a reson for tech to sell off.
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This article was written by a staff member of RealMoney.com.