Monday, February 23, 2009

Weekly Stock Pick

Weekly Stock Pick

As I scan the stock charts this Monday morning, my opinion that the stock market was heading much lower happened after the upside rally to the this current bear market started the beginning of December. I still see the market heading lower, although this week I’m looking for another dead cat bounce after last week’s big sell-off. With the White House and Treasury Department late Friday seeking to tone down rumors that Citibank and Bank of America are about to become totally owned subsidiaries of Uncle Sam, it shows that Wall-Street has no faith yet from what Capitol Hill is saying or doing. Early on Friday, executives at Citigroup and Bank of America both said they are not in danger of nationalization, but their statements did little to calm the markets. The worse is yet to come in my opinion.

Through this bear market I’ve heard a lot of analysts and pros saying there’s great value and to buy stocks right now based on the fundamentals and or the technical’s. When stock prices were flying high in the past, was it fundamentals and or technical’s driving them? Yes and no, maybe so, who knows, and does it even matter in the end? I’m more inclined to think greed was and always has been the driver. Now prices are in a down-trend, and what are the reasons for the selling? I would say simply, fear. My best suggestion is that no matter if you’re buying or short-selling in any type of market, is to always using stop-loss. It will save your account in case the market goes against you, and you can also save your breath about making statements as to why or why not the price moved the way it did. Want do you really want? Do you want to be right or do you want to make money?

My stock pick this week is a new buy position on an American company that manufactures and distributes paint products around the world. The reason why I picked this stock to buy this week and every week is that it’s showing a low-risk high-reward buy trade setup on the chart. I’m not basing my analysis so much on anything the company is doing or any other fundamental reason. The chart is showing me a 3:1 plus reward risk ratio, so if I’m right I have good return, and if I’m wrong I’ve got a small stop-loss. It’s about calculating the odds and taking a position that stacks those odds in your favor on every trade or investment. Win some lose some and in the long term get rich.

Buy Long Sherwin-Williams. Ticker SHW

Buy Entry: 45.52 to 43.98

Stop-Loss: 43.75 or lower.

Stop-Loss Note: If 43.75 give’s way, look for 35 target and see about buying in there.

Take Profit Areas: 47.74, 49.11 to 50.48, 62.58 to 65.53

Sherwin-Williams Company Profile

The Sherwin-Williams Company (Sherwin-Williams) is engaged in the development, manufacture, distribution and sale of paint, coatings and related products to professional, industrial, commercial and retail customers primarily in North and South America with additional operations in the United Kingdom, Europe, India and China. The Company’s operating segments comprise Paint Stores Group, Consumer Group and Global Group. In February 2008, the Company acquired Becker Powder Coatings Inc., a subsidiary of AB Wilh. Becker. In July 2008, the Company acquired the Liquid Coatings subsidiaries of Inchem Holdings of Inchem Holdings International Limited. In February 2009, the Company acquired Altax Sp. zo.o.

Click here to review and Trial the Trading Software I used in determining my long position on SHW. Enter I2S in the "coupon code" field to receive the 5% discount.

Click the Sherwin-Williams Stock Chart for a larger view.

Sherwin-Williams Stock Chart