This Grocery Stock Could Be A Steal At This Price

Daniel Cross - INO.com Contributor - Equities


It's been a wild ride for Wall Street this past week as the broader indexes collapsed for several days before rebounding sharply back to the upside. The short correction was mostly blamed on the fallout from the Chinese stock market crash which triggered panicked selling across all assets and dragged down every segment of the stock market. But panic selling can be a great buying opportunity for value shoppers.

Sometimes a perfect storm can take a stock way down below its fair value. An earnings miss combined with a macroeconomic crisis can amplify losses well beyond a reasonable range. However, if the long-term fundamentals hold strong, investors can pick up a great value buy at a discounted price.

A solid company in the wrong place at the wrong time

The Fresh Market (TFM) is a grocery store with 168 stores in 27 states known for its organic foods selection. The stock has suffered mightily this year – down roughly 50% year-to-date. The company's recent earnings miss coupled with the recent events in the global financial markets have contributed to the stock's weakness. Continue reading "This Grocery Stock Could Be A Steal At This Price"

Fundamentals Can Kill You If You're Not Careful!

Today we are going to be looking at two very different stocks. One stock had very bullish fundamentals and the other stock had bearish fundamentals. In today's video, I will show you what happened to each stock and why. I will also share with you why the fundamentals can really lag behind the real market action.

It's true, the fundamentals don't ring bells and tell you it's a top or bottom in the market. The fundamentals also don't tell you that they have changed and you should be locking in your profits. What if you had an early warning system in your back pocket that you know works? How valuable would this be to you and your portfolio?

It is unrealistic to think that you are going to sell at the top of every market and buy at the very bottom. That just doesn't happen, even for the most professional traders. During my career, it only happened to me once and I put that down to sheer luck.

Let's take a look at these two stocks now and get a feel for how they are trading.

The video runs just under 7 minutes and can change the way you look at the markets.

So what are you waiting for? Let's get started right away!

Enjoy the video, and every success in your trading.

Adam Hewison
President, INO.com
Co-Creator, MarketClub

Trader's Whiteboard: Lesson 6

How many times have you turned on your television or computer to see that Corporation XYZ is expected to make huge profits, but when you look at the chart it is telling you otherwise?

Who is right? How do you determine what to look at when you are preparing to enter a trade? Adam has put together this Trader’s Whiteboard video to explain the differences in information and to help you wade through the “noise”.

Click here to watch Lesson 6 in the series and tell us what you think about fundamentals, technicals, and market perception in the comments section.

Enjoy!

The MarketClub Team

Trader's Whiteboard: Lesson 6

How many times have you turned on your television or computer to see that Corporation XYZ is expected to make huge profits, but when you look at the chart it is telling you otherwise?

Who is right? How do you determine what to look at when you are preparing to enter a trade? Adam has put together this Trader’s Whiteboard video to explain the differences in information and to help you wade through the “noise”.

Click here to watch Lesson 6 in the series and tell us what you think about fundamentals, technicals, and market perception in the comments section.

Enjoy!

The MarketClub Team

A look at divergence in panel indicators

Today I'd like to welcome back Gary from Biiwii.com. I've asked Gary to teach us a bit on divergence.

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I want to have a look at divergence by the lower panel indicators and the valuable clues they can provide when used in conjunction with price activity, support/resistance levels and of course fundamentals of a given stock, commodity or other asset.

Divergence can be used to help define bullish or bearish setups. With my M.O. as a 'bottom feeder', today I will focus on a chart that sports most of the components I like to see when setting up for a swing trade; it is the etf UNG (the United States Natural Gas Fund) which has been declining relentlessly from a manic high in June and mercilessly punishing anyone innocent enough to buy into this mini-bubble under the incorrect assumption that it was 'commodities to da moon'. But as "what goes up comes down" so too does the reverse eventually assert itself.

In looking at NatGas, I like the fundamentals much better from a seasonality and value perspective (thanks to a 40% decline) if only for a swing trade into the fall or winter. Fundamentals are the first priority. Check. Next, the decline has brought the price down to a notable area of lateral support. A decline like this is simply not going to be arrested until support can be defined. Check, we are at noticeable support.

Finally, what I like to see in a bottom feed is relentless and and dispiriting price action down to said support with bullish divergence by the indicators. We have that in spades with RSI, MACD, CCI and Rate of Change all nicely divergent even as bubble participants give up the ship (fresh lows in price). Right at support. I have included the full Stochcastics which have also diverged but more importantly are on the verge of 'triggering' above 20. That would be another important cross reference to a bullish case.

So there you have it. A simple bottom feed amid terrible price action down to support and bullish divergence. Nothing but NOTHING in this market is 100% and it is all about risk vs. reward. This trade in my opinion has a good risk profile. The risk is certainly better for Natty than back in July, wouldn't you say? I have my own money in this trade and speaking of risk, if the noted support fails so too will the trade and I will book a loss. It won't be the first time. But the key is to always understand your risk profiles and control same.

Edit (10:00) At the time this post was written (pre-market 8/27/08) I was expecting UNG and NatGas to continue hammering out a painful bottom (those are the best kind for sustainability). But during normal market hours we appear to be getting quite excited and gappy. If UNG registers a manic over bought condition directly off of the low I am going to sell it. Please use the above as a chart study on indicator divergence only.