This is a new weekly series for the Detroit Day Trader Examiner that focuses on stocks already in the news, either by local papers or advisors from around the country. With so many local Detroiters in early retirement, stocks in the news indeed affect their IRAs and their income.
Oftentimes a technical chart might better relate to the story. In such cases, I will include that in the article or at the end in a slideshow.
In the meantime, here is a short list from some of the mail and research items I have reviewed this past weekend:
Biotech ETF could run to $100, says Sam Collins
Detroit area investors, whether long or short-term minded, are always looking for investing opportunities. Sam Collins of Daily Trader’s Alert thinks iShares Nasdaq Biotechnology Index Fund (IBB) could run toward the $100 mark. The goal of this exchange-traded fund (ETF) is to provide investment results that correspond generally to the price-and-yield performance of the Nasdaq Biotechnology Index (NBI).
Still think Ford is a Buy below $15?
Ford may be the Detroit favorite these days, and that seems to be the consensus of most advisor articles as well that come my way. Ford has already received much praise for moving ahead of GM and maybe even Toyota in U.S. sales.
For the record, I sold the March 11 strike put options in late January on Ford for income for my own IRA. That is a bullish play, and I’m in the money so far. My hope of maybe picking Ford up at $11 in addition to the put income, however, is looking remote.
The recent breakout to the upside, though, secures my put income but seems to have made the probability of having the stock put to me at $11 by March option expiration an unlikely event. Still, I’ll be happy with the multi-week gain of 5.5% and will have to find another option opportunity on Ford or perhaps buy it on a pullback.
Is Whiting Trust a way to play oil income for your IRA?
Detroit area drivers have a way of getting part of their energy expenses back. Bryan Perry of Investorplace.com thinks investing in U.S.-based ultra-high-yield energy properties is an appealing investment theme. Given ultimately higher oil and gas prices from the higher usage of fossil fuels, he may be right, but the question centers on where.
He likes Whiting USA Trust (WHX) formed by Whiting Petroleum (WLL) as a way for the company to acquire and hold a term net profits interest (NPI). This entitles the trust to receive 90% of net proceeds from the sale of production from the company’s underlying properties in the Rocky Mountains, Mid-Continent, Permian Basin and Gulf Coast regions. As reported in 2008 documents, the production from these properties totaled about 56% oil and 44% natural gas.
There are four reasons for his rationale:
1) American-based high-income energy assets also provide investors the perfect inflation hedge;
2) Energy is the perfect currency hedge;
3) Energy is the perfect foreign risk hedge;
4) This energy trust provides an income stream of around 16% at present prices.
For the record and as full disclosure, I picked up 100 shares this morning as a source of income for my own IRA. I might consider more, but only on the next pullback in oil prices.
Examiner Final Comments
Be apprised that my technical charts will now show the MACD indicator with a retracement zone. I have discovered that the mid-point between cyclical peaks and valleys of momentum can act as a valid indicator of bullish and bearish sentiment. Above the red line (50% level) reads as bullish; below the red line reads as bearish. However, judgment is required based on your own tolerance for risk.
I’ll cover more on that indicator in a separate techncial analysis article.
By the way, I do not give advice or sell buy or sell signals. All my articles are for research and education only. All decisions to buy or sell are yours to make. Education and self management is highly encouraged.