Trading Goddess

Why The 50-Day Moving Average Is A Great Technical Indicator

2013-06-17T07:58:00.000-04:00

Since mid-April, one of the strongest industry sector ETFs in the market has been Market Vectors Semiconductor ($SMH). We initially bought this ETF when it broke out back in April, sold into strength for a 9% gain several weeks later, then re-entered with partial share size after it began pulling back (May 23).

As the broad market has been consolidating and digesting its recent gains over the past month, $SMH has been holding up well and we remain long our partial position from the May 23 entry. However, now that the 50-day moving average has finally risen to meet the price of $SMH, we are also prepared to add to the swing trade position, in anticipation of a pending resumption of its new uptrend and a breakout to a new 52-week high.

Below is the daily chart pattern of $SMH:

As you can see, the June 13 intraday low in $SMH nearly coincided with a kiss of its rising 50-day MA (teal line). When an ETF or stock with relative strength breaks out of a base, the first subsequent pullback to the 50-day MA typically presents a low-risk buying opportunity because it is this level where institutions often step back in to buy.

Rarely will the first retracement to a 50-day MA that follows a substantial breakout fail to hold up on the first test (although "undercuts" of one or two days are common). As such, subscribing members of our swing trader newsletter should note we have listed $SMH as a potential buy entry. Please see the "Watchlist" section of today's report for our exact trigger, stop, and target prices for this setup.

In this June 6 blog post, we pointed out the "triple convergence of support" that was forming in the S&P 500. Specifically, we highlighted how key intermediate-term support of the 50-day moving average, dominant uptrend line, and horizontal price support from the prior highs were all merging together. To refresh your mind, here is the exact chart of the S&P 500 SPDR ($SPY) we showed that day:

The very next day, the S&P 500 "undercut" that area of support on an intraday basis, but formed a bullish reversal candle to close above it. Such a bounce was not surprising, as the more technical indicators that converge to form support, the more significant that support becomes.

After the formation of that triple convergence of support on the S&P 500, we indeed expected a bounce, but also still expected the broad market to consolidate a bit longer before resuming its uptrend. Now that stocks have been trading in a range for the past few weeks, the 50-day moving average has again risen up to provide support for $SPY (just like the $SMH chart). Here is the current snapshot of $SPY:

The charts of both $SMH and $SPY above are great examples of the significance of the 50-day moving average as an intermediate-term indicator of support. However, it's important to realize that stocks and ETFs are more likely to bounce off the 50-day MA if it is only the first touch of the 50-day MA that follows a convincing breakout from a valid base of support.

Each subsequent test of the 50-day MA that occurs before the index or stock breaks out to another high technically weakens support of the 50-day MA and thereby increases the odds of a breakdown below it. As such, it would be a negative sign for the market if $SPY and/or $SMH break down below the June 13 lows (which would correspond to a break of the 50-day MAs).

As long as the major indices and leading sectors hold their 50-day MAs while continuing to consolidate, stocks still technically look good for another move higher, which would pick up where the April to May rally left off.

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DISCLAIMER: There is a risk for substantial losses trading securities and commodities. This material is for information purposes only and should not be construed as an offer or solicitation of an offer to buy or sell any securities. Morpheus Trading, LLC (hereinafter "The Company") is not a licensed broker, broker-dealer, market maker, investment banker, investment advisor, analyst or underwriter. This discussion contains forward-looking statements that involve risks and uncertainties. A stock's actual results could differ materially from descriptions given. The companies discussed in this report have not approved any statements made by The Company. Please consult a broker or financial planner before purchasing or selling any securities discussed in The Wagner Daily (hereinafter "The Newsletter"). The Company has not been compensated by any of the companies listed herein, or by their affiliates, agents, officers or employees for the preparation and distribution of any materials in The Newsletter. The Company and/or its affiliates, officers, directors and employees may or may not buy, sell or have positions in the securities discussed in The Newsletter and may profit in the event the shares of the companies discussed in The Newsletter rise or fall in value. Past performance never guarantees future results.

© 2002-2013 Morpheus Trading, LLC
Reproduction without permission is strictly prohibited.

Ex-Dividend Stocks Week 3 of June

2013-06-13T12:36:00.000-04:00

Here is our latest update on the stock trading technique called 'Buying Dividends'. This is the process of buying stocks before the ex dividend date and selling the stock shortly after the ex date at about the same price, yet still being entitled to the dividend. This technique generally works only in bull markets, and can work in flat or choppy markets, but you need to avoid the technique during bear markets.

In order to be entitled to the dividend, you have to buy the stock before the ex-dividend date, and you can't sell the stock until after the ex date. The actual dividend may not be paid for another few weeks. WallStreetNewsNetwork.com has compiled a downloadable and sortable list of the stocks going ex dividend in the near future. The list contains many dividend paying companies, many with market caps over $500 million, and yields over 2%. Here are a few examples showing the stock symbol, the ex-dividend date, and the yield.

Symantec Corporation (SYMC) 6/17/2013 2.5%

Tupperware (TUP) 6/17/2013 3.0%

Las Vegas Sands (LVS) 6/18/2013 2.4%

Solar Capital Ltd. (SLRC) 6/18/2013 10.0%

Safeway (SWY) 6/18/2013 3.4%

Sypris Solutions, Inc. (SYPR) 6/18/2013 2.4%

Tiffany & Co. (TIF) 6/18/2013 1.7%

Xcel Energy (XEL) 6/18/2013 3.8%

Advance Auto Parts (AAP) 6/19/2013 0.3%

The additional ex-dividend stocks can be found at wsnn.com. (If you have been to the website before, and the latest link doesn't show up, you may have to empty your cache.) If you like dividend stocks, you should check out some of the other high yield stock lists at WallStreetNewsNetwork.com or WSNN.com. Most of the lists are free.

Dividend definitions:

Declaration date: the day that the company declares that there is going to be an upcoming dividend.

Ex-dividend date: the day on which if you buy the stock, you would not be entitled to that particular dividend; or the first day on which a shareholder can sell the shares and still be entitled to the dividend.

Monthly Dividend Stock List
Record date: the day when you must be on the company's books as a shareholder to receive the dividend. The ex-dividend date is normally set for stocks at two business days before the record date.

Payment date: the day on which the dividend payment is actually made, which can be as long at two months after the ex date.

Book now available: Buying Dividends Revised and Expanded
Don't forget to reconfirm the ex-dividend date with the company before implementing this technique.

Disclosure: Author did not own any of the above at the time the article was written.

How You Can Invest Like Warren Buffett

2013-06-12T15:50:00.000-04:00

Known as the Oracle of Omaha, Warren Buffet is the platinum standard by which investors only hope to measure themselves against. His knowledge of investing and the stock market has amazed those who have watched him make money no matter what the economy is like. His holding company of Berkshire Hathaway (BRK-A) (BRK-B) has what is known as the most valuable stock ever traded on the New York Stock Exchange and investors everywhere clamor to any news of his buying or selling of stock.

His portfolio is always public and if one were to examine it, you would see that his stocks are a reflection of his core attitude towards America and its values. He has always stated that America is still the best place in the world for a baby to be born and he has always tried to invest in the American companies that best demonstrate integrity, solid fundamentals, and a defensive strategy against the pitfalls of the economy. He likens his strategy to that of a castle with a wide moat as defense. The companies that have an impervious defense and a strong history of dividends can be found in Berkshire Hathaway. According to the database of Berkshire Hathaway stocks at WallStreetNewsNetwork.com, over 75% of the Warren Buffett companies pay dividends.

Although most of the companies in his portfolio are US based, they have a strong international presence, companies such as International Business Machines Corporation (IBM) which trades at 14 times earnings and yields 1.8%, and American Express (AXP), which trades at 19 times earnings and pays a dividend rate of 1.2%.

People often wonder how his investing strategy works and how he manages to make so much money. It’s pretty simple actually and he even tells you what he does. When everyone is selling, he buys, and when everyone is buying, he sells. It’s always been said that in order to make money in the stock market you buy low and sell high. In examining Warren Buffet’s strategy, he does exactly this. The fact that many people do not follow his investing advice is why his simple method seems so mysterious. Maybe Wall Street investors should actually take note of his advice and spend less time trying to make a quick dollar from trading and spend more time investing in a long term based ideology.

For a free list of stocks that Warren Buffett's Berkshire Hathaway owns, go to WallStreetNewsNetwork.com.

Disclosure: Author didn't own any of the above at the time the article was written.

Ex-Dividend Stocks Week 2 of June

2013-06-05T12:10:00.004-04:00

Ameren Corp (AEE) 6/10/2013 4.7%

Amerisafe, Inc. (AMSF) 6/10/2013 1.0%

Anadarko Petroleum (APC) 6/10/2013 0.4%

Amphenol (APH) 6/10/2013 0.5%

Michael Baker Corp (BKR) 6/10/2013 2.8%

El Paso Electric Co. (EE) 6/11/2013 2.9%

Briggs & Stratton (BGG) 6/12/2013 2.1%

Encana (ECA) 6/12/2013 4.1%

Hillenbrand Inc. (HI) 6/12/2013 3.2%

Macy's (M) 6/12/2013 2.0%

Rogers Communications (RCI) 6/12/2013 3.8%

The additional ex-dividend stocks can be found at wsnn.com. (If you have been to the website before, and the latest link doesn't show up, you may have to empty your cache.) If you like dividend stocks, you should check out some of the other high yield stock lists at WallStreetNewsNetwork.com or WSNN.com. Most of the lists are free.

Dividend definitions:

Declaration date: the day that the company declares that there is going to be an upcoming dividend.

Ex-dividend date: the day on which if you buy the stock, you would not be entitled to that particular dividend; or the first day on which a shareholder can sell the shares and still be entitled to the dividend.

Leading Warren Buffett Books

2013-06-03T17:55:00.000-04:00

As a continuation of our series this month on Warren Buffett, the billionaire head of Berkshire Hathaway (BRK-A) (BRK-B), we are featuring a list of some of the top selling Warren Buffett books, some are written by him and some are about him.

by Buffett

The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) Warren E. Buffett (Collaborator)

The Essays of Warren Buffett: Lessons for Corporate America, Third Edition Warren E. Buffett (Author) Lawrence A. Cunningham (Author, Editor)

Poor Charlie's Almanack: The Wit and Wisdom of Charles T. Munger, Expanded Third Edition Warren E. Buffett (Foreword)

Los ensayos de Warren Buffett (Spanish Edition) Warren E. Buffett (Author)

about Buffett

Trade Like Warren Buffett

The Warren Buffett Way, Second Edition

The Snowball: Warren Buffett and the Business of Life

The Winning Investment Habits of Warren Buffett & George Soros

The New Buffettology: The Proven Techniques for Investing Successfully in Changing Markets That Have Made Warren Buffett the World's Most Famous Investor

Warren Buffett Speaks: Wit and Wisdom from the World's Greatest Investor

The Tao of Warren Buffett: Warren Buffett's Words of Wisdom: Quotations and Interpretations to Help Guide You to Billionaire Wealth and Enlightened Business Management

If you missed the article on the Warren Buffett lunch auction on eBay (EBAY), you should check it out.

Agriculture ETF Starts Sprouting, As Solar ETF Still Shining Brightly

2013-05-31T08:01:00.002-04:00

Although commodity-based stocks have been a big laggard this year, we have noticed some relative strength in Market Vectors Agribusiness ($MOO). After breaking a long-term downtrend line and successfully testing that line last month, we could possibly see a breakout entry emerge down the road (if the price action remains in a tight range. $MOO is not actionable now, but should be added to your radar screen as a potential buy entry. Here is the monthly chart:

Dropping down to the weekly time interval, we see the 10-day MA (teal line) above the 40-week MA (orange line). Like the test of the downtrend line on the monthly chart above, we see the same below, with last week's test of the downtrend line and the 40-week MA.

For this setup to remain constructive, the price action should hold above the 40-week MA and the higher "swing low." It may take several weeks for the price to tighten up on the right hand side, so we will place $MOO on a second tier watchlist (one that is reviewed only on the weekends):

After finding support around the $23 area, Guggenheim Solar ETF ($TAN) continues to push higher, above the rising 10-day MA. As you may recall from this recent blog post, we're holding a long position in this ETF (currently showing an unrealized gain of 10.5% since our May 23 pullback entry). The daily chart below details the support in $TAN:

Should $TAN fail to punch through the $26 level and pull back in (for a week or two), there is solid support from the uptrend line and the 20-day EMA around $23. Overall, this ETF continues to show great relative strength as the broad market consolidates.

In addition to $TAN, we also bought Market Vectors Semiconductor ETF ($SMH) when it pulled back on May 23. It too continues to act well, and closed yesterday right at resistance of its prior swing highs from mid-May. As such, we are selling partial share size on today's open, just to lock in a decent gain on this short-term momentum trade. We will trail a protective stop higher on the remaining shares.

As mentioned earlier this week, our ETF scans have not produced much in the way actionable setups, so a short-term break in the market should eventually produce some low-risk buy points. Until then, we will simply remain patient and focus on managing existing positions.

The commentary above is a shortened version of the May 31 issue of The Wagner Daily swing trade newsletter. Sign up today for your risk-free 30-day trial subscription by clicking here.

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Top 3D Printing Stocks

2013-05-30T22:29:00.001-04:00

3D printers can now print many objects. They can now print human cartilage and automobile bodies. Large scale 3D printers can even print houses. According to an article in the Armed Forces Journal, the Navy may use 3D printing to make drones and weapons.

One major player in the 3D printing industry is 3D Systems Corporation (DDD), with a market cap of $4.4 billion. This is just one of several 3D printing companies on the free list at WallStreetNewsNetwork.com. 3D Systems is a Rock Hill, South Carolina based company, founded in 1986, which produces 3D printers and related products. The stock trades at 107 times current earnings and 37 times forward earnings. The company has $110 million in cash and $50 million in debt.

Another 3D hardware company is Stratasys (SSYS), which produces three-dimensional printers, rapid prototyping systems, and related consumable materials. This Minnesota based company was founded in 1989. Although the latest quarterly earnings were negative, revenues spiked by 116%. This company has the advantage of being debt free with $140 million in cash. This $3.4 billion market cap stock trades at 35 times forward earnings.

In regards to 3D software, Autodesk (ADSK) makes 3D software for many different industries, including entertainment, architecture, and manufacturing. The stock trades at 38 times trailing earnings and a forward price to earnings ratio of 16. The company has $746 million in debt, and has $2 billion dollars in the bank, amounting to 9.34 per share in cash.

For a free list of the companies involved in 3D printing, which can be downloaded, sorted, and updated, go to WallStreetNewsNetwork.com.

Disclosure: Author did not own any of the above at the time the article was written.

Top Caffeine Stocks

2013-05-30T13:02:00.000-04:00

Colgate-Palmolive (CL) has filed a patent for a toothbrush that will automatically dispense caffeine into your mouth, and therefore you. Caffeine seems to be the latest legal non-prescription drug of choice, with caffeinated chewing gum, potato chips, and candied popcorn. Yes, the FDA is taking a closer look at these products and may be cracking down, yet the point is that caffeine seems to now be ubiquitous.

Are there caffeine investment opportunities? Of course, with almost a couple dozen stocks in the production of coffee and tea, according to the free list of coffee stocks at WallStreetNewsNetwork.com, with a half a dozen of them paying dividends. This list doesn't even include Coca Cola (KO) or Pepsico (PEP), which are major producers of caffeinated soft drinks.

Starbucks (SBUX) is the largest coffeehouse retailer in the world, with outlets in 50 countries and over 18,000 shops worldwide. The stock trades at 32 times trailing earnings and 24 times forward earnings. The stocks sports a yield of 1.3%. Earnings for the latest quarter rose 26% on an 11.3% boost in revenues. The company has $1.7 billion in cash and $570 million in debt.

Coca Cola trades at 18 times forward earnings with a yield of 2.7% and Pepsi has a forward price to earnings ratio of 17 and also has a 2.7% yield.

Hain Celestial Group (HAIN) owns the Celestial Seasonings brand of teas including green teas. The stock has a trailing price to earnings ratio of 29, and a forward PE of 23. The stock does not currently pay a dividend.

A major wholesaler of coffee is Coffee Holding Co. (JVA), which also markets private label coffee and branded coffee in the US and Canada. The company has 90 varieties of raw green coffee beans which it imports from around the world and sold to large and small operators. The stock trades at 26 times trailing earnings and nine times forward earnings. The stock yields 3.4%.

For a free list of coffee, tea and caffeine companies, or a free list of soft drink beverage companieswhich you can download, sort, and update, go to WallStreetNewsNetwork.com.

Disclaimer: Author didn't own any of the above at the time the article was written.

Ex-Dividend Stocks First Week of June

2013-05-29T23:57:00.000-04:00

Here is our latest update on the stock trading technique called 'Buying Dividends'. This is the process of buying stocks before the ex dividend date and selling the stock shortly after the ex date at about the same price, yet still being entitled to the dividend. This technique generally works only in bull markets. In flat or choppy markets, you have to be extremely careful, and may need to avoid the technique during those times.

In order to be entitled to the dividend, you have to buy the stock before the ex-dividend date, and you can't sell the stock until after the ex date. The actual dividend may not be paid for another few weeks. WallStreetNewsNetwork.com has compiled a downloadable and sortable list of the stocks going ex dividend during the next week or two. The list contains many dividend paying companies, all with market caps over $500 million, and yields over 2%. Here are a few examples showing the stock symbol, the ex-dividend date, and the yield.

Avery Dennison (AVY) 6/3/2013 2.6%

Brown-Forman (BF-B) 6/3/2013 1.4%

CSS Industries (CSS) 6/3/2013 2.0%

Chicago Rivet & Machine Co. (CVR) 6/3/2013 2.4%

Cedar Fair L.P. (FUN) 6/3/2013 5.8%

Greenhill & Co. (GHL) 6/3/2013 3.5%

Halliburton Company (HAL) 6/3/2013 1.2%

Schlumberger Ltd. (SLB) 6/3/2013 1.7%

Home Depot (HD) 6/4/2013 2.0%

Dominion Resources (D) 6/5/2013 3.9%

The additional ex-dividend stocks can be found at wsnn.com. (If you have been to the website before, and the latest link doesn't show up, you may have to empty your cache.) If you like dividend stocks, you should check out the high yield utility stocks and the Monthly Dividend Stocks at WallStreetNewsNetwork.com or WSNN.com.

Dividend definitions:

Declaration date: the day that the company declares that there is going to be an upcoming dividend.

Ex-dividend date: the day on which if you buy the stock, you would not be entitled to that particular dividend; or the first day on which a shareholder can sell the shares and still be entitled to the dividend.

Monthly Dividend Stock List
Record date: the day when you must be on the company's books as a shareholder to receive the dividend. The ex-dividend date is normally set for stocks two business days before the record date.

Payment date: the day on which the dividend payment is actually made, which can be as long at two months after the ex date.

Book now available: Buying Dividends Revised and Updated
Don't forget to reconfirm the ex-dividend date with the company before implementing this technique.

Disclosure: Author did not own any of the above at the time the article was written.

By Stockerblog.com

Top 3 ETFs To Buy As Stock Market Pulls Back ($TAN, $SMH, $EWM)

2013-05-28T16:00:00.000-04:00

On the morning of May 23, one day after the first significant broad market decline in more than a month, we targeted both Guggenheim Solar ETF ($TAN) and Market Vectors Semiconductor ($SMH) for potential pullback buy entry in our Wagner Daily newsletter (these two ETFs were actually pointed out as potential pullback entries in this May 22 blog post one day earlier).

Because bearish follow-through momentum from the May 22 sell-off carried through into the May 23 open (as anticipated), both ETF swing trade setups triggered for "official" pullback buy entry, and have been acting well since then.

As of this moment, the rather volatile $TAN is already showing an unrealized gain of 8.9% since our May 23 buy entry of $23.45 (where we grabbed some shares on a pullback to the 10-day MA). From here, we would ideally like to see the ETF build a base of consolidation near the highs, then breakout to a new high within the next several weeks.

The other trade we entered on the May 23 open was $SMH, which we swiped at $37.68 as it pulled back to test substantial near-term support of its 20-day exponential moving average (for the first time since its breakout).

The following day, $SMH formed a bullish "hammer" candlestick and closed above its 20-day EMA for the second straight day. The daily chart below illustrates this (based on most recent closing price of May 24):

Based on the healthy pullback of $SMH that is holding the 20-day EMA, the ETF should be well positioned to climb back to the highs as long as the broad market holds steady.

If we get a little bit of help from the market, in the form of a bounce this week, $SMH should be among the first industry sector ETFs to outperform due to the relative strength $SMH was exhibiting on the way up. An added bonus is that we are now back into this ETF at a much lower price than our most recent exit at $38.44, when we sold $SMH for a 9% gain on May 13.

On May 6, iShares Malaysia Index Fund ($EWM) gapped up 6% to a fresh all-time high. Since this was a confirmed breakaway gap, we have been stalking this ETF for the past several weeks, waiting for a base of consolidation to form and the moving averages to rise up and provide support.

Last Friday (May 24), $EWM gapped down to "undercut" support of its 20-day exponential moving average:

From here, we will be watching to see if $EWM forms some sort of bullish reversal bar and closes back above the 20-day EMA. If it does, it could present a possible buying opportunity the following day (above the prior day's high).

For now, it is not actionable on today's watchlist, but we will be sure to notify subscribers of our nightly swing trade newsletter if/when we decide to buy as an "official" swing trade on our watchlist.

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Original Source

DISCLAIMER: There is a risk for substantial losses trading securities and commodities. This material is for information purposes only and should not be construed as an offer or solicitation of an offer to buy or sell any securities. Morpheus Trading, LLC (hereinafter "The Company") is not a licensed broker, broker-dealer, market maker, investment banker, investment advisor, analyst or underwriter. This discussion contains forward-looking statements that involve risks and uncertainties. A stock's actual results could differ materially from descriptions given. The companies discussed in this report have not approved any statements made by The Company. Please consult a broker or financial planner before purchasing or selling any securities discussed in The Wagner Daily (hereinafter "The Newsletter"). The Company has not been compensated by any of the companies listed herein, or by their affiliates, agents, officers or employees for the preparation and distribution of any materials in The Newsletter. The Company and/or its affiliates, officers, directors and employees may or may not buy, sell or have positions in the securities discussed in The Newsletter and may profit in the event the shares of the companies discussed in The Newsletter rise or fall in value. Past performance never guarantees future results.

© 2002-2013 Morpheus Trading, LLC
Reproduction without permission is strictly prohibited.

Ex-Dividend Stocks for Week 5 of May

2013-05-23T00:00:00.000-04:00

Here is our latest update on the stock trading technique called 'Buying Dividends'. This is the process of buying stocks before the ex dividend date and selling the stock shortly after the ex date at about the same price, yet still being entitled to the dividend. This technique generally works only in bull markets. In flat or choppy markets, you have to be extremely careful, and may need to avoid the technique during those times.

In order to be entitled to the dividend, you have to buy the stock before the ex-dividend date, and you can't sell the stock until after the ex date. The actual dividend may not be paid for another few weeks. WallStreetNewsNetwork.com has compiled a downloadable and sortable list of the stocks going ex dividend during the next week or two. The list contains many dividend paying companies, all with market caps over $500 million, and yields over 2%. Here are a few examples showing the stock symbol, the ex-dividend date, and the yield.

AFLAC Inc. (AFSD) 5/29/2013 5.2%

Bank of Hawaii (BOH) 5/29/2013 3.8%

Barrick Gold (ABX) 5/29/2013 4.3%

Brookfield Properties (BPO) 5/29/2013 3.1%

Cherokee Inc. (CHKE) 5/29/2013 3.1%

Comcast Corporation (CCV) 5/29/2013 4.9%

Northeast Utilities (NU) 5/29/2013 3.3%

Prudential Financial, Inc. (PJH) 5/29/2013 5.6%

Empire District Electric (EDE) 5/30/2013 4.4%

FutureFuel Corp. (FF) 5/30/2013 3.6%

Lockheed Martin (LMT) 5/30/2013 4.7%

The additional ex-dividend stocks can be found at wsnn.com. (If you have been to the website before, and the latest link doesn't show up, you may have to empty your cache.) If you like dividend stocks, you should check out the high yield utility stocks and the Monthly Dividend Stocks at WallStreetNewsNetwork.com or WSNN.com.

Dividend definitions:

Declaration date: the day that the company declares that there is going to be an upcoming dividend.

Ex-dividend date: the day on which if you buy the stock, you would not be entitled to that particular dividend; or the first day on which a shareholder can sell the shares and still be entitled to the dividend.

Top 5 Qualities Of The Best Stock Breakouts – Trading Strategy

2013-05-21T20:43:00.000-04:00

When buying breakouts of growth stocks, one of the three main techniques of our momentum swing trading system, there are certain technical criteria we look for because all the best stock breakouts share the same traits.

Last week (May 17), we sold a breakout swing trade in Pandora Media ($P) for a net gain of 14% with a holding period of less than three weeks. Prior to buy entry on May 1, the stock possessed the top 5 technical traits for breakout buying, which we have listed below (see the first chart below for a visual reference):

High volume gap - On March 8, the stock gapped sharply higher to close the day with an 18% gain. Most importantly, volume spiked to approximately 700% its 50-day average level. When stocks score such a massive one-day gain that is accompanied by a monster surge in volume, it is undeniably the footprint of institutional buying (which we always want to see on the long side).
20-day MA > 50-day MA - During the formation of the base of consolidation that followed the March 8 gap, the 20-day exponential moving average remained above the 50-day moving average the entire team. This is a sign that the uptrend technically remains solid.
Tight base above 50-day MA - As $P was forming its base, the 50-day moving average was rising up to meet the price. When that occurred, the stock touched and held key support of its 50-day MA several times. Simultaneously, the base began tightening up, which is typically a precursor to a breakout.
First base after reversal off lows - This was the first real base that $P formed since its big reversal off the late 2012 lows (around $8). The first stage bases often have the highest odds of a successful breakout because the momentum of the new uptrend is just ramping up.
IPO - Although not a requirement of breakout setups, one bonus is that $P recently launched as an IPO in 2011. If strong earnings growth and momentum exists, IPOs have a tendency to make explosive moves because of the lack of overhead supply (resistance).

Below is the daily chart of $P, as it looked at the time of our breakout buy entry:

After we determined that a valid base of consolidation had formed, we then focused on determining exactly when to buy. The technical factors that helped us drill down to a precision entry point were:

A "higher low" formed within the base (second touch of the 50-day MA)
Price broke out above the 6-week downtrend line started by the May 8 high
A tight range formed immediately upon breaking out above the downtrend line

The technical signals above told us it was the proper time to stalk $P for potential swing trade buy entry. In the May 1 issue of The Wagner Daily, we told subscribing members we would be buying $P if it traded above $14.18 (just above the April 30 high).

As anticipated, the stock triggered our buy entry that day, and we were long at an entry price of $14.20. The chart below shows our entry point, the subsequent price action, and our eventual exit point a few weeks later:

As $P began climbing higher, our plan was to hold the swing trade as long as the price held above the steep uptrend line that formed on the hourly chart (similar to the way we recently trailed a stop to maximize gains on our swing trade of $SMH).

On the close of May 16, we raised the stop to just below that day's low because we observed "stalling" action over the preceding two days and wanted to protect our profits. An analyst downgrade caused $P to gap down and hit our tightened stop on the open of May 17, but our sale at $16.17 still allowed us to lock in a nice 14% gain on the trade. This was just a bit less than the usual 20 to 25% gains we typically seek to achieve with breakout momentum trades.

Want to profit from the next profitable breakout swing trade? Sign up for our swing trading newsletter today at: http://www.morpheustrading.com.

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Top Stocks for Pets

2013-05-21T14:13:00.000-04:00

According to a recent report by the American Heart Association, owning a dog was “probably associated” with a reduced risk of heart disease. Maybe that's why about 62 percent of all households in the United States have a pet, with approximately 78.2 million dogs and about 86.4 million cats owned by Americans, according to the American Pet Products Association.

If you are looking for top dog stocks, you should consider the the suppliers of pet products, veterinary products, and pet medications. According to WallStreetNewsNetwork.com, there are about ten different pet related stocks, with almost half of them paying dividends.

Petsmart Inc. (PETM) is a Phoenix, Arizona based company that markets products for dogs, cats, birds, fish, and even horses. In addition to selling toys, food, and other products, and also offer services such as dog grooming, baths, toenail trimming, and tooth brushing, training and boarding at their Pet Hotels. The stock has a price to earnings ratio of 19.5, and pays a yield of 0.9%. The company must be doing something right as earnings for the latest quarter were up 31.4% on a 14.7% rise in revenues.

There is also Patterson Companies Inc. (PDCO) which has a veterinary supply business. Patterson Companies Inc. distributes lab supplies, paper goods, needles and syringes, gauze and wound dressings, sutures, latex gloves, orthopedic, and casting products; pharmaceuticals, including anesthetics, antibiotics, injectibles, ointments, and diagnostics to veterinarians. The stock trades at 19.4 times earnings. The company also pays a dividend of 1.7%. Revenues were up 2.3% for the latest quarter, with earnings up 1%.

MWI Veterinary Supply, Inc. (MWIV) distributes pharmaceuticals, vaccines, diagnostics, capital equipment, supplies, veterinary pet food, and nutritional products to veterinarians. The P/E is 25.3 and the stock does not pay a dividend. For the latest quarter, earnings were up 14.6% on an 11% boost in revenues.

For a list of all the pet related stocks, which you can download, sort, and add to, go to WallStreetNewsNetwork.com.

Disclosure: Author did not own any of the aboveat the time the article was written.

Ex-Dividend Stocks Week 4 of May

2013-05-18T12:48:00.000-04:00

Here is our latest update on the stock trading technique called 'Buying Dividends'. This is the process of buying stocks before the ex dividend date and selling the stock shortly after the ex date at about the same price, yet still being entitled to the dividend. This technique generally works only in bull markets. In flat or choppy markets, you have to be extremely careful, and may need to avoid the technique during those times.

In order to be entitled to the dividend, you have to buy the stock before the ex-dividend date, and you can't sell the stock until after the ex date. The actual dividend may not be paid for another few weeks. WallStreetNewsNetwork.com has compiled a downloadable and sortable list of the stocks going ex dividend during the next week or two. The list contains many dividend paying companies, all with market caps over $500 million, and yields over 2%. Here are a few examples showing the stock symbol, the ex-dividend date, and the yield.

Highwood Properties (HIW) 5/20/2013 4.2%

Maxim Integrated Products (MXIM) 5/20/2013 3.1%

Park National Corp (PRK) 5/20/2013 5.6%

LTC Properties (LTC) 5/21/2013 3.9%

American Financial Group Inc. (AFW) 5/22/2013 6.0%

The additional ex-dividend stocks can be found at wsnn.com. (If you have been to the website before, and the latest link doesn't show up, you may have to empty your cache.) If you like dividend stocks, you should check out the high yield utility stocks and the Monthly Dividend Stocks at WallStreetNewsNetwork.com or WSNN.com.

Dividend definitions:

Declaration date: the day that the company declares that there is going to be an upcoming dividend.

Ex-dividend date: the day on which if you buy the stock, you would not be entitled to that particular dividend; or the first day on which a shareholder can sell the shares and still be entitled to the dividend.

How We Gained 9% Selling Short Gold Into The Bounce – Trading Strategy

2013-05-17T09:33:00.000-04:00

Yesterday, we sold our swing trade in DB Gold Double Short ($DZZ), a "short ETF" that inversely tracks the price of spot gold, for a solid gain of 9% over a two-week holding period. Since the trade followed through as anticipated, we thought it would be helpful to share an educational technical review of why we originally entered the trade and subsequently sold when we did.

For several months prior to entering this trade, we had been closely monitoring the price action of SPDR Gold Trust ($GLD), an ETF proxy for the price of spot gold. Specifically, we were expecting $GLD to eventually break down below major horizontal price support around the $150 level. The trade idea was originally mentioned in this March 18 blog post, and then again on April 29.

The breakdown we were planning for finally occurred on April 12, which led to a massive drop of 13% over the course of just two days. But since the April 12 decline was so large, and because we run an end-of-day swing trading service, we were unable to immediately take advantage of selling short the breakdown in $GLD (or buying the breakout in $DZZ). However, we were not really concerned because we knew we would probably get a second chance.

Whenever a stock or ETF experiences a massive drop within a very short period of time, it will typically make a substantial counter-trend bounce shortly thereafter. When that bounce occurs, traders and investors who got stuck and did not sell for one reason or another sell into strength of the bounce, hoping to minimize their losses. It is this "overhead supply" that prevents the equity from moving higher in the near-term, which subsequently attracts the bears who start selling short.

The end result of all the selling into strength of the bounce is that the recovery attempt is usually short-lived. What happens next is that the price will typically head back down to at least re-test the prior low before stabilizing. There are exceptions, of course, but it is highly unusual for a stock or ETF to experience a huge plunge, bounce off the lows, and not subsequently fall back down to test the prior lows at least once. It is this knowledge that prompted our short sale of gold as it bounced into resistance of its 20-day exponential moving average, then started heading back down.

On the chart of $DZZ below, we have annotated our entry and exit points, which will make it easy to understand the concept above. Since our entry was into an inverse ETF, the price action is opposite of $GLD. Therefore, our entry was on a pullback from the highs, rather than a bounce off the lows:

As you can see, we bought $DZZ on May 1, after it gapped above the previous day's high. When buying a pullback to support (or selling short a bounce into resistance), we always wait for price confirmation that the dominant trend is likely to resume. The confirmation we are looking for is either a big, ugly reversal bar or a substantial opening gap in the direction of the dominant trend.

The fact that we always patiently wait for such price confirmation is the reason we did not immediately buy $DZZ on its first touch of support of its 20-day exponential moving average (beige line) three days prior. Entering before the price confirmation occurs is always riskier because there is no confirmation that the counter-trend move is finished. Therefore, we happily give up a bit of the trade's profit potential in return for a lower-risk entry point.

The initial protective stop was set at $5.49. We set the stop at this price because it was below convergence of the low of the pullback (intraday low of April 26) and support of the 20-day EMA. After the gap up of May 1, we did not want to see the price action break below that convergence of support, so we set the stop below that level, including some "wiggle room" below the exact price of the low.

Finally, as for the exit point, our target on this type of momentum trade is simply a retest of the prior swing high (or prior swing low if selling short). As such, we set a target price of $6.40 going into yesterday's session (just one cent shy of the April 15 high). Gapping higher on the open, $DZZ neatly hit that target and we sold.

Although $DZZ could go on to set a new high from here, that was not the intention of the trade at the time of entry. Rather, we were simply looking to catch a substantial piece of the first move back in the direction of the dominant trend. Furthermore, the odds of $DZZ going to a new high are much lower than the odds of it simply going back to retest its prior highs because now there is resistance of a major swing high (support of a key swing low in $GLD).

Don't miss our next big ETF and stock pick winners. Sign up for your 30-day risk-free membership to The Wagner Daily swing trader newsletter today.

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Best Selling Investment Books

2013-05-16T00:43:00.002-04:00

Here are the top selling books in the Investing category at Amazon.com:

The Real Crash: America's Coming Bankruptcy---How to Save Yourself and Your Country ~ Peter Schiff

The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) ~ Benjamin Graham

Mindset: The New Psychology of Success ~ Carol S. Dweck

The Alternative Answer: The Nontraditional Investments That Drive the World's Best-Performing Portfolios ~ Bob Rice

Antifragile: Things That Gain from Disorder ~ Nassim Nicholas Taleb

Intermarket Analysis and Investing: Integrating Economic, Fundamental, and Technical Trends ~ Michael E. S. Gayed

How To Trail Stops On Winning Swing Trades For Maximum Profit

2013-05-13T15:03:00.000-04:00

Being a consistently profitable swing trader is a juggling act that requires one to constantly be focused on a variety of key elements of success: picking the right stocks, managing risk, determining when to sell, and even mastering the psychology of trading.

In this educational trading strategy article, we will dive into the topic of knowing how and when to sell winning ETF and stock swing trades for maximum profit, using the example of an actual swing trade we are currently positioned in. As for when to sell losing trades, there's frankly not much to say other than always have a predetermined stop before entering every trade and simply honor it.

Since April 12, the model trading portfolio of our swing trading newsletter (The Wagner Daily) has been long Market Vectors Semiconductor ETF ($SMH). We initially alerted traders of the technical reasons we were bullish on the semiconductor sector (and $SMH) in this March 28 blog post. Since then, we have also reminded regular readers of our trading blog several more times about the increasing relative strength in semis.

In the "open positions" section of today's (May 13) Wagner Daily, subscribing members will notice we have trailed our $SMH protective stop higher for the fourth consecutive day. Because the ETF is already nearing our original target area of $40, while remaining on a very steep angled climb, we have been continually squeezing the stop tighter in order to protect gains, while still allowing for maximum profit.

On the daily chart of $SMH below, we have labeled the increasingly higher stop prices we have used in each of the past four sessions:

As you can see, our stop in each of the past four trading sessions has been raised to just below the low of the prior day's session. Whenever an ETF or stock is nearing your target area and you wish to maximize profits while still protecting gains, setting a stop just below the previous day's low (allowing for a tiny bit of "wiggle room") is a great strategy. This is because basic technical analysis states the prior day's lows and highs act as very near-term support and resistance (respectively).

By using this method for trailing stops, you will be out of a winning position before the start of a significant pullback, while still allowing the gains to build as long as buying momentum remains. This system also provides an objective way for knowing when to close a winning swing trade, rather than guessing and potentially leaving significant profits on the table.

Of course, there are many different ways to manage exits on winning momentum trades, and some of those methods are equally as effective as what is explained above. The reality is that any trading system can be a great one if the trader proves to be profitable with it over the long-term (even if the system involves trading by the cycles of the moon).

As such, we would never imply that our system is absolutely the best way to manage stops on winning swing trades. But what we truly love about our exit strategy is its utter simplicity; simple trading strategies are the easiest to follow and thereby profit from. Why complicate a technique that has already been proven to work so well? Become a member of our swing trading service to learn more.

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Now You Can Read all the Warren Buffett Berkshire Hathaway Letters

2013-05-12T23:52:00.003-04:00

Some of the Berkshire Hathaway Letters to the Shareholders are available online, some were available in printed format. But now, the full, un-edited versions of every one of Warren Buffett's letters to the shareholders of Berkshire Hathaway are available in the form of a 730 page book.

The book is called Berkshire Hathaway Letters to Shareholders and is compiled by Max Olson. The book was recently released on April 25, 2013.

Top Dividend Gold Stocks

2013-05-11T14:16:00.001-04:00

Gold has been hit hard recently, and in mid April, the price of gold dropped like a 50 pound nugget. In the last six months, the SPDR Gold Shares (GLD) tanked by over 16.6%. Many gold bugs believe that the selling pressure on gold is off now, and that a continuation of the little rebound during the last half of April is in the works. Yields have almost doubled and in some cases more than doubled.

Investors who are looking to get in to the gold market now have an interesting opportunity, as yields on the gold mining stocks have almost doubled, and in some cases, more than doubled. According to the free list of high yield gold mining stocks at WallStreetNewsNetwork.com, there are over 20 gold stocks that pay dividends.

Freeport-McMoRan Copper & Gold (FCX) is the big player in the precious metals arena, mining for copper, gold, molybdenum, cobalt, silver, and many other metals. It happens to be the world's largest publicly traded copper company. This Phoenix Arizona based company has operations in North America, South America, Indonesia, and Africa. The stock trades at 10.6 times trailing earnings and 7.7 times forward earnings. Earnings for the latest quarter were down about 15% on relatively flat revenues. The stock pays a very generous 4.0% yield, and dividends are paid quarterly. James R. Moffett, Chairman of the Board, and Richard C. Adkerson, President and Chief Executive Officer, said,

"Our first-quarter results reflect our focus on strong and safe production, aggressive cost management and advancing financially attractive projects to grow our copper production, increase cash flows and provide strong returns for shareholders."

One issue that investors should be aware of is that Freeport is moving more into the oil and gas industry through its acquisitions of Plains Exploration & Production Company and McMoRan Exploration Co.

Another high yield gold company is Yamana Gold, Inc. (AUY), a Toronto, Ontario, Canada based company involved in the exploration and production of gold, copper, molybdenum, zinc, and silver, from its properties in Brazil, Chile, Argentina, and Mexico. The stokc trades at 24 times trailing earnings and 11.2 times forward earnings. The latest quarterly earnings were down 40% on a 4.4% reduction in revenues. The dividends are much higher than a current bank certificate of deposti, as the stock currently yields 2.2%. Dividends for this company are also paid out quarterly.

The yields on these stocks can help reduce some of the volatility and return capital faster. However, if the price of gold doesn't stabilize and begin to increase, the gold mining stocks can suffer even more than they have been lately. For a list of the other high yield gold mining stocks, which can be downloaded, sorted, and updated, go to WallStreetNewsNetwork.com.

Disclosure: Author didn't own any of the above at the time the article was written.

How We Gained 15% On A Momentum Swing Trade In $CLDX Stock

2013-05-09T15:19:00.000-04:00

On May 6, we shared with you our Top 3 Most Simple & Profitable Buy Setups For Swing Trading Stocks. In that trading strategy article, we showed you an example of a "Combo Setup," as well as a "Blast Off" setup. For the third type of swing trade setup, the "Price Momentum" trade, we promised we would show you an example of that as well, and here it is.

Recently, subscribers who follow our Wagner Daily newsletter netted an average 15% gain on a momentum stock trade that was held just over 3 weeks.

In this 4-minute swing trading strategy video, we walk you through the technical criteria that prompted the initial buy entry, show you the placement of our protective stop, and explain our rationale for exiting the momentum trade for a solid profit.

To view this video on our blog, click the image below:

VIEW 4-MINUTE MOMENTUM TRADING STRATEGY VIDEO

Companies that Recently Boosted Their Dividends

2013-05-08T01:22:00.000-04:00

The following stocks have recently increased their dividends. This is the sign of a good company and could be the sign of an improving economy.

American Water Works Company (AWK) announced an increase of its quarterly cash dividend payment from $0.25 to $0.28 per share, a 12 percent increase.

Costco (COST) raised its dividend by 12.70% to 31 cents per share.

IBM (IBM) raised its quarterly dividend by 11.8% to 95 cents per share.

PepsiCo (PEP) raised quarterly distributions by 5.6% to 56.75 cents per share.

Royal Dutch Shell plc (RDS-A) raised its quarterly dividend by 4.7% to 90 cents per share.

Jack Henry & Associates (JKHY) declared a quarterly dividend of $0.20 per share, a 54% increase over the prior payout of $0.13 per share.

ExxonMobil (XOM) recently declared a 10.5% dividend increase.

Chevron (CVX) declared an 11% dividend increase.

If you like interesting lists like this, check out the many stock lists at WallStreetNewsNetwork.com, most of which are free.

The Top 3 Most Simple & Profitable Buy Setups For Swing Trading Stocks

2013-05-07T15:53:00.000-04:00

Many active traders make the mistake of assuming that a winning system for swing trading stocks needs to be complicated. On the contrary, the best trading strategies are typically the most simple because they can be more easily and consistently followed.

Our methodology for picking stocks in our popular swing trading newsletter is simple, as 99% of the stocks we buy in our model trading portfolio come from one of the following three setups:

1. Combo Setup - The stock must have a combination of great earnings growth and strong technical price action (some type of bullish chart pattern). Typically, these stocks are growing their earnings at a rate of 30 to 40% (or more) quarter after quarter. Furthermore, these stocks will usually have an IBD relative strength rating of 80 or higher. Since we consider these stocks to be A-rated, they can usually be held for several weeks or more.

2. Price momentum - With this swing trade setup, earnings growth is not important, but the stock must have a top relative strength rating (95 or higher) and belong to an industry sector group that is outperforming the S&P 500. These stocks can be held for a few days to a few weeks.

Our recent trade in Celldex Therapuetics ($CLDX), a biotechnology stock with a relative strength rating greater than 95, is a good example of a swing trade setup based purely on momentum (bullish price action). Last month, we netted a 15% gain on our swing trade in $CLDX and will soon be posting an educational video review of that trade on our blog.

3. Blast Off - Neither earnings growth nor a top relative strength rating is necessary with this type of swing trading setup. We are simply looking for a monster spike in volume on the daily chart, combined with a 4% or more gain in that same session. This indicates huge demand. If demand is sharply greater than supply, the price has no choice but to surge higher (which is why volume is such a great technical indicator).

With this setup, the one-day volume spike should be at least 2.5 to 3 times greater than the 50-day moving average of volume. These stocks can be held for a few days to a few weeks (as long as the price action remains excellent).

A current example of the "Combo" setup (#1 above) can be found in Michael Kors Holding Limited ($KORS). So, let's take a closer look at how this trade meets our parameters.

For starters, the expected earnings growth of $KORS in the coming quarter is 81%, so the requirement for strong earnings growth is definitely covered. Its IBD relative strength rating is only 71, but that is compensated for by the monstrous earnings growth the company has been experiencing. Next, let's take a look at the technical chart pattern.

After several months of choppy price action, $KORS is starting to come together nicely. Upon completing a 20% pullback off its February 2013 high, $KORS found support at its 200-day moving average, then rallied to reclaim its 50-day moving average last week. Now, $KORS is working on forming a bullish chart pattern known as a "cup and handle," which looks like this:

As shown on the chart below, $KORS formed the left side of the cup and handle pattern from March to late April, and is now working on the right side of the pattern. The right side of the pattern will need several weeks to develop and form a handle with a proper buy point. During this time, the stock needs to hold above its 50-day moving average as well. This annotated chart of $KORS shows what we are looking for:

YRC Worldwide, Inc. ($YRCW) is a great example of a "Blast Off" setup (#3 above). Notice the huge volume and sharp gap above resistance that occurred last Friday (May 3):

As of the first 30 minutes of trading in today's session (May 6), $YRCW is trading more than 20% higher than the previous day's close. Obviously, such a huge follow-up price gap is not common; nevertheless, it shows you just how powerful the "Blast Off" setup can be:

If not already holding this stock, the setup is definitely NOT buyable for swing trading right now (we never chase stocks). However, if/when it forms a proper base of consolidation from here, we can begin to look for a low-risk buy point (at which time we would notify Wagner Daily subscribers of our exact entry, stop, and target prices).

As previously mentioned, we will soon be posting an educational review of last month's winning swing trade in $CLDX, which will be an example of our "Price Momentum" setup. Be sure to check back here on our trading blog soon.

By the way, on a separate note, I just stumbled across a new social networking site just for "finance fanatics." It is apparently a brand new site, but I like the format and think it has potential. In case you want to check it out, it is FinancePins.com. Just passing that along.

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Original source
DISCLAIMER: There is a risk for substantial losses trading securities and commodities. This material is for information purposes only and should not be construed as an offer or solicitation of an offer to buy or sell any securities. Morpheus Trading, LLC (hereinafter "The Company") is not a licensed broker, broker-dealer, market maker, investment banker, investment advisor, analyst or underwriter. This discussion contains forward-looking statements that involve risks and uncertainties. A stock's actual results could differ materially from descriptions given. The companies discussed in this report have not approved any statements made by The Company. Please consult a broker or financial planner before purchasing or selling any securities discussed in The Wagner Daily (hereinafter "The Newsletter"). The Company has not been compensated by any of the companies listed herein, or by their affiliates, agents, officers or employees for the preparation and distribution of any materials in The Newsletter. The Company and/or its affiliates, officers, directors and employees may or may not buy, sell or have positions in the securities discussed in The Newsletter and may profit in the event the shares of the companies discussed in The Newsletter rise or fall in value. Past performance never guarantees future results.

© 2002-2013 Morpheus Trading, LLC
Reproduction without permission is strictly prohibited.

Ex-Dividend Stocks for Week 3 of May

2013-05-06T14:24:00.000-04:00

Here is our latest update on the stock trading technique called 'Buying Dividends'. This is the process of buying stocks before the ex dividend date and selling the stock shortly after the ex date at about the same price, yet still being entitled to the dividend. This technique generally works only in bull markets. In flat or choppy markets, you have to be extremely careful, and may need to avoid the technique during those times.

In order to be entitled to the dividend, you have to buy the stock before the ex-dividend date, and you can't sell the stock until after the ex date. The actual dividend may not be paid for another few weeks. WallStreetNewsNetwork.com has compiled a downloadable and sortable list of the stocks going ex dividend during the next week or two. The list contains many dividend paying companies, all with market caps over $500 million, and yields over 2%. Here are a few examples showing the stock symbol, the ex-dividend date, and the yield.

Consolidated Edison (ED) 5/13/2013 3.9%

DuPont (DD) 5/13/2013 3.4%

Exelon Corp (EXC) 5/13/2013 3.3%

Fifth Street Finance (FSC) 5/13/2013 10.5%

Five Oaks Investment Corp. (OAKS) 5/13/2013 10.4%

Gas Natural Inc. (EGAS) 5/13/2013 5.2%

Black Hills Corp (BKH) 5/15/2013 3.3%

Chevron Corp (CVX) 5/15/2013 3.3%

Diebold, Inc. (DBD) 5/15/2013 3.8%

The additional ex-dividend stocks can be found at wsnn.com. (If you have been to the website before, and the latest link doesn't show up, you may have to empty your cache.) If you like dividend stocks, you should check out the high yield utility stocks and the Monthly Dividend Stocks at WallStreetNewsNetwork.com or WSNN.com.

Dividend definitions:

Declaration date: the day that the company declares that there is going to be an upcoming dividend.

Ex-dividend date: the day on which if you buy the stock, you would not be entitled to that particular dividend; or the first day on which a shareholder can sell the shares and still be entitled to the dividend.

Why First Trust Internet Index Fund May Be The Next ETF To Breakout ($FDN)

2013-05-02T08:10:00.000-04:00

One ETF on our radar screen for potential buy entry right now is First Trust Internet Index ($FDN). Unlike many of the strongest ETFs in the market that are near-term extended to the upside, $FDN has not yet broken out above its range. As such, one could understandably argue that the ETF has relative weakness and should be avoided. In many cases, that would be true.

Even though $FDN has not yet broken out, the difference here is that the ETF has been forming a constructive base of consolidation at its all-time highs. This is much different than buying an ETF that is trading near its lows and is only now attempting to reverse its downtrend. The weekly chart of $FDN below shows how the ETF has been consolidating for the past few months:

On the week ending March 8, notice that $FDN attempted to break out to a new high, but failed the following week. When this happens to an ETF or stock that is trading near its highs, it does not necessarily mean the setup becomes invalid. On the contrary, some of the most explosive upside moves occur when the first breakout attempt fails, but the equity subsequently breaks out and hold. Often, failed breakouts at the highs simply indicate a lengthier period of base building is required.

Zooming into the shorter-term daily chart interval, notice that a rally above yesterday's (May 1) high would present a valid buy entry point for a partial position. Additional shares could be added to the position on confirmation of a breakout above the highs of the range:

Despite the major indices losing 0.9% yesterday, $FDN showed relative strength on the day by slipping just 0.5%. This was aided by shares of LinkedIn ($LNKD), which ignored the weakness in the broad market and climbed 1.4% to another fresh record high. $FDN is primarily comprised of mid to large-cap internet stocks like Google ($GOOG), Netflix ($NFLX), and Yahoo! ($YHOO), each of which are trading at or near their 52-week highs. Click here to see the current portfolio of stocks that comprise the portfolio of $FDN.

Speaking of internet stocks, our open position in $LNKD is now showing an unrealized gain of nearly 12% (20 points) since our April 9 buy entry. As we said in yesterday's The Wagner Daily, "$LNKD is scheduled to report earnings after the close on May 2, so if you are uncomfortable holding through earnings you should exit the position into strength ahead of the report (in today's session). Because we have a decent profit buffer we do not mind holding $LNKD through earnings." To further your trading education, check out how we traded around last quarter's $LNKD earnings report for a total gain of 22%.

Receive detailed entry, stop, and target prices of our top nightly stock and ETF picks by getting started now with your 30-day risk-free subscription to The Wagner Daily swing trading newsletter.

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Ex-Dividend Stocks for Week 2 of May

2013-04-30T15:02:00.000-04:00

Here is our latest update on the stock trading technique called 'Buying Dividends'. This is the process of buying stocks before the ex dividend date and selling the stock shortly after the ex date at about the same price, yet still being entitled to the dividend. This technique generally works only in bull markets. In flat or choppy markets, you have to be extremely careful, and may need to avoid the technique during those times.

In order to be entitled to the dividend, you have to buy the stock before the ex-dividend date, and you can't sell the stock until after the ex date. The actual dividend may not be paid for another few weeks. WallStreetNewsNetwork.com has compiled a downloadable and sortable list of the stocks going ex dividend during the next week or two. The list contains many dividend paying companies, all with market caps over $500 million, and yields over 2%. Here are a few examples showing the stock symbol, the ex-dividend date, and the yield.

Box Ships Inc (TEU) 5/7/2013 10.1%

Computers Programs & Systems (CPSI) 5/7/2013 3.9%

Entergy Corp (ETR) 5/7/2013 4.8%

S&T Bancorp (STBA) 5/7/2013 3.3%

Sunoco Logistics Partners L.P. (SXL) 5/7/2013 3.6%

American Electric Power (AEP) 5/8/2013 3.9%

American Financial Group Inc. (AFA) 5/8/2013 5.5%

Artesian Resources (ARTNA) 5/8/2013 3.6%

BB&T (BBT) 5/8/2013 3.0%

The additional ex-dividend stocks can be found at wsnn.com. (If you have been to the website before, and the latest link doesn't show up, you may have to empty your cache.) If you like dividend stocks, you should check out the high yield utility stocks and the Monthly Dividend Stocks at WallStreetNewsNetwork.com or WSNN.com.

Dividend definitions:

Declaration date: the day that the company declares that there is going to be an upcoming dividend.

Ex-dividend date: the day on which if you buy the stock, you would not be entitled to that particular dividend; or the first day on which a shareholder can sell the shares and still be entitled to the dividend.