INSIDE TRADING STOCKS Insider Tip Sheet: USE THE NEWS TO MAKE YOUR PORTFOLIO SWELL: CAPITAL ONE
Jim Cramer mentioned Capital One on his show and on THE STREET on Thursday of last week, and notice the effect it had on the stock price. The credit card company was trading around the $14-$15 level, when the financial market expert mentioned it as a BUY in defense of people needing credit. Which is true, if this economy is going to turn around for the better anytime soon, lending institutions are going to have to ease up on credit lending standards AND loan more of the money the federal government is passing down.
But the point of this is to build a profit in your portfolio. Will every company mentioned on a highly rated television show break the barrier and jump up 4 ½ points in a day? No, not always. But it proves that you should be paying close attention to the headlines to research how they affect your stock picks.
Personally, I wouldn’t go with COF (Capital One) but I’m going to have to watch it closely today, to see if I can discover a trend. COF is reacting not only to Cramer’s comments, but to the stress test reports the banking industry passed last week. What other factors will affect this price?
I’m looking for a ceiling around $24-$25 this week, so I’ll keep an eye on it, if it breaks $21 by Tuesday, consider it a buy with limits at $22 and a sell order at $24.47 or so. If it pushes past $25, research shorting the stock. We’ll follow up on this on Friday to determine how it performed, and if it was a winner.
MONDAY CFO $19.02
How can you use the news to make your portfolio grow? The big headlines are swine flu and pirates, not necessarily in that order. I would spend some time researching pharmaceuticals as an industry, unless one particular company announces it has the antidote. What companies are going to benefit from the association? Health care providers? Insurers? Body bag makers? Use out of the box thinking to determine your portfolio plays.
Pirates! We’re all scared of them now because these AK-47 toting animals look nothing like the lovable seafaring scalawags we grew up wanting to be. There’s not a Captain Jack Sparrow among the bunch, and certainly no Captain Morgan. So how can we profit from these profiteers? Time to hit the net and do some research. Again, what are the ancillary companies being affected by pirate activity, or even have a brush with the perception. You may not want to invest in the shipping company who’s ship is being overrun, but do look at the cruise industry where the ship’s crew fought off pirates in a gun battle. What is the public perception of that action and how will it affect the stock price in the short term? Will private security companies land contracts to protect ships at sea? How will this affect the shipping company’s profit? Will a publicly held security company land the contract? Set your RSS feeds for information regarding pirates and the comments play makers are saying, and you too should be able to use the news to make your portfolio grow.
