Brenda Buttner was joined by: Gary B. Smith, RealMoney.com columnist; Pat Dorsey, director of stock research at Morningstar.com; Tobin Smith, CEO of ChangeWave Capital Partners; Scott Bleier, Fox Business News contributor; and Bob Olstein, president of the Olstein Funds.
Trading Pit
The Dow and Nasdaq both had triple digit point gains for the week. As a matter of fact, it was the fourth straight winning week for the Dow. But the markets are still underwater from a year ago.
Bob looked at his research, and he thinks that the market is going nowhere this year.
Tobin disagreed and said that we had good economic news, and that news is only going to get better.
Gary B. charted the S&P 500 and noticed that it just recently broke a monster downtrend, so he feels it is now impossible to be negative on the markets.
Pat said the big question for him is consumer spending. He said consumers have continued to buy cars, even though the 0% financing ended. Home sales are still strong. But as mortgage rates start to increase and retail sales remain weak, he questions what can power the economy forward.
Scott expects that the Nasdaq will not be able to keep pace with the Dow.
Toby thinks that we are going to have an economic recovery and that cyclical companies are already starting to reflect this. He said if you're an investor, now is the time to invest. Bob added that investors can buy stocks, but they must buy the right stocks, and big stocks like Cisco (CSCO), General Electric (GE), and IBM (IBM) are overpriced right now. So what's going to bring people into this market? Gary B. said people are going to see the big gain in the market this past week and regret that they missed it. So on the next pullback; they'll get in.
Chartman
Gary B. and Pat stayed put and took a look at Amazon.com (AMZN) and KLA-Tencor (KLAC), the top two performing stocks in the Nasdaq 100 since the first of the year.
First the duo examined Amazon.com. The Internet retailer is up 51% since January 1st. The Chartman's mixed on this company after looking at its chart. He said Amazon.com has put in a nice base under $18, and is prepared to go higher. BUT only get long on the stock if it's able to close above that $18 mark. Pat was totally bearish on this stock. He said it did have a great fourth quarter, but there is just not enough growth in books and cd's, which are its key business. Unlike the Chartman, Pat said he would wait for the price to fall, below $10, before he would be interested.
Next the two looked at KLA-Tencor. The chip equipment maker has gone up 40% since the first of the year. And that's good news for the Chartman because he said the company has just recently broke to new highs in the upper $60's. It's a little extended for him right now, but he'd buy on any pullback to the low $60's. Pat said he does not like this stock because it is too expensive (although he said it is a great company) and the demand is weak for products needing chips.
Scoreboard
There's no place for the Bulls & Bears to hide when we look at their past picks and predictions in the scoreboard.
On February 9th Scott said:
Nasdaq will have a steady fall and hit 1,500 on Memorial Day. At the time of his prediction, the Nasdaq was at 1,819. And since then, it has climbed 111 points, closing Friday at 1,930. He doesn't think the Nasdaq will hit 1,500, but it will head lower.
On November 3rd Bob said:
Cigna (CI) is a buy! It was at $79.58 then and closed Friday at $96.58, up 21%. Bob hasn't taken profits from this stock yet, because he thinks it is headed to $120.
January 19th Gary B. said:
Kmart's demise is Wal-Mart's (WMT) gain. He was right on the money. Wal-Mart's up 11% since his prediction. The Chartman thinks that Wal-Mart has the best chart in the Dow and will still head higher.
On February 16th Tobin said:
General Motors (GM) is out of gas; sell! At that time, it was priced at $50.32 and has gone up 21%, closing Friday at $60.71. Toby took this one like a man, and fessed up that he blew this call. He now sees the stock heading to $70.
On September 29th Pat said:
Argosy Casinos (AGY) is positioned to win. He hit the jackpot! The stock is up 37% since his prediction at the end of September. Pat said the company is now fairly valued and it's time to take profits.
Predictions
Tobin: Raytheon (RTN) big winner as war expands
Pat: Drink up Diageo (DEO) stock and make money!
Gary B: Coming market drop a buying opportunity
Bob: Mergers coming in the broadcast/media sector
Scott: Quest Diagnostics (DGX) up 30% by year-end
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