Monday, May 18, 2009

Weekly Stock Pick

Buy Sell Hold
The Market Week Ahead

The market could be in for choppy trading this week. With light earnings reports and economic news coming in, the market will be looking for signs of direction. Notable events this week include Timothy Geithner testifying before Congress on Wednesday on the TARP program. Housing starts and leading indicators reports are coming out this week also.

Agriculture Stocks On Radar Screen

As I ran my stock scans this early Monday morning, a lot of Agriculture stocks popped up on the radar screen as possible sell candidates. They have taken a good upside run lately, and still may have more to go, but the higher they fly, the lower they can fall too. I’m not selling short this sector though, at least not yet if ever. The fundamentals are just too strong and solid right now, but I’m not buying at these levels either. A pullback would provide a nicer entry point for the agri stocks longer term.

This Weeks Stock Pick

My stock pick this week is an international telecom. Its chart pattern has the look for much lower prices potentially near and medium term. In case it has more upside, always use a stop-loss. I would be a strong buyer under 14 to 12. With a yield over 7%, and the company’s expansion into the South American internet market, the payout ratio is about 90%. For the near term I’m putting a sell on this international telecom stock.

Short-Sell France Telecom. Ticker FTE

Sell Entry: 23.56 to 22.67

Stop-Loss: 24 or Higher

Take Profit Targets: 20.97 to 20.63, 20.31 to 19.93, 17.53 to 17.25, 14.53 to 14.30

France Telecom Company Profile

France Telecom provides fixed telephony and mobile telecommunications, data transmission, Internet, and multimedia services to consumers, businesses, and other telecommunications operators in France, the United Kingdom, Spain, Poland, and the rest of the world. It operates in three segments: Personal Communication Services (PCS), Home Communication Services (HCS), and Enterprise Communication Services (ECS). The PCS segment provides mobile telecommunications services. The HCS segment offers the fixed-line telecommunications services, including fixed-line telephony, Internet services, and services to operators, as well as engages in the distribution activities and support functions. The ECS segment provides business communication solutions and services, as well as data transmission services, including low and high-speed Internet, data transmission, and leased lines services. In addition, France Telecom offers integration, project consulting, management, and platform services. Further, it provides broadcast services and network equipment sales. The company also offers telecommunication services in Kenya. It has a strategic partnership with Sonaecom. France Telecom was founded in 1990 and is headquartered in Paris, France.

Click here to review and trial the Trading Software I used in determining my short position on France Telecom.

Click the France Telecom Stock Chart for a larger view.

France Telecom Stock Chart