Monday, August 10, 2009

Weekly Stock Pick

Buy Sell Hold
The Market Week Ahead

First, the market last week. The Dow gained more than 125 points while the S&P tacked on 15 points late Friday on news that the pace of U.S. job losses slowed more than forecast in July and the unemployment rate dropped for the first time in more than a year. One month does not make a trend so be careful on being overly optimistic just yet.

The data reports this week for equity investor traders, and especially forex traders. Monday: Australia Investment Lending. Bank of Japan Interest Rate Decision, Japan Economic Survey & Outlook, Japan Bankruptcies, and Machine Tool Orders. Euro-Zone Sentix Investor Confidence. New Zealand Manufacturing, House Sales, and Credit Card Spending. UK House Prices and Retail Sales. Tuesday: Australia Business Confidence. Japan Consumer Confidence. UK Visible Trade Balance. Canada Housing Starts. Wednesday: Australia Wage Costs. Bank of Japan Monthly Report. UK Jobless Claims and Unemployment. Euro-Zone Industrial Production. Bank of England Quarterly Inflation Report. Canada International Trade, and Housing Prices. US Trade Balance, and Federal Open Market Committee Interest Rate Decision. Thursday: Australia Housing Affordability and Inflation Expectations. Germany & France Gross Domestic Product. Swiss Producer & Import Prices. European Central Bank Monthly. Euro-Zone Gross Domestic Product. US Retail Sales. New Zealand Retail Sales. Bank of Japan Monetary Policy Meeting Minutes. Friday: USA and Euro-Zone Consumers Prices. US Industrial Production and Michigan Confidence Survey.

Our Stock Pick This Week

It’s a buy long position on an electronic and computer display manufacturer based in Taiwan currently valued at about $9 billion. One asset manager from Stamford Connecticut says this company is an “opportunity of a generation”. I’m not so sure about that but I am looking for this company’s stock price this year to possibly go to 15 in the next 3 months. If the market permits, this would be about a 10:1 Reward Risk Ratio based on my investment trade plan below. Exponential returns like this can make you very wealthy over time. In case the market or the stock does not permit, take your stop-loss to reposition in the stock later on or go find another low-risk high-reward opportunity. There’s always another opportunity coming around the corner in the financial markets. No need to chase opportunities but rather let them come to you, especially in times like this.

Buy Long AU Optronics Ticker AUO

Buy Entry: 10.32 to 10.68

Stop-Loss: 10.22 or Lower

Take Profit Areas: 12.18 to 12.54, 13.02 to 13.54, 14.78 to 15.21, 17.06 to 17.56

AU Optronics Company Profile

AU Optronics Corp. engages in the design, development, manufacture, assembly, and marketing of thin film transistor liquid crystal display (TFT-LCD) panels and other flat panel displays. The company's TFT-LCD panels are used in computer products, such as notebook computers and desktop monitors; consumer electronics products comprising mobile phones, digital photo frames, digital still cameras, portable navigation display, portable digital versatile disk players, digital camcorders, automobile display, and amusement and printer displays; and LCD televisions and industrial displays. It sells its panels principally to original equipment manufacturing service providers in Taiwan, the People’s Republic of China, and internationally. The company was formerly known as Acer Display Technology, Inc. and changed its name to AU Optronics Corp. in May 2001. AU Optronics Corp. was founded in 1996 and is based in Hsinchu, Taiwan.

Click here to review and trial the Trading Software we used in determining our short position on AUO.

Click the AU Optronics Stock Chart for a larger view.

AU Optronice Stock Chart