You are currently browsing the daily archive for December 26, 2009.
In an earlier post I highlighed Delta Airlines [DAL] for a swing trade with airlines benefiting from lower crude oil pricing. Delta seems to be leading the pack however here are a few others for your consideration with their 50d now trading above the 200d; a better sign of 
health imho. When in doubt, check the airline index XAL [left] which would indicate to buy the next pullback. Pundits also believe this is one of the areas we’ll see M&A activity going forward so adding one to your portfolio with lower crude prices wouldn’t be a bad decision.
Now I realize I just posted that above stating lower crude prices but there’s something just plain sexy about XOM and how broke out, formed a rising wedge, dropped, achieved its target from the wedge and is now sitting at its prior breakout point – testing that support. Kizmet. Its price target was just lowered to $79 and where is it now? $68. Hmmmmmmmm One week left in the year, right?
The world of computer memory chips or DRAM has been plagued with overstock, lack of demand and simply too many players in the field since the tech bubble and their stock prices suffered horribly as evidenced by this 10yr monthly chart of MU. Factories were idled, most were forced to sell at a loss and inventories were high. But the worldwide financial crisis may have changed that paradigm, squeezing small players [some failing] and increasing M&A activity; leveling more of the playing field. 
In 2009 we finally saw continual increase in demand as shown in the graph right from the Dram Exchange and prospects for 2010 demand are high with the October launch of Windows 7 and its touchscreen technology. At this point, there’s even word of an unheardof DRAM shortage for 2010 which is just amazing. So is DRAM out of the woods now?
PCWorld commented in July ’09 on PC makers scrambling for certain parts, such as small LCD screens and DDR3 (double data rate, third generation) DRAM chips and the release of touchscreen technology only increases that demand as other players follow suit going forward. In fact, CAPEX [capital expenditures] are estimated to increase 80% in 2010 and companies such as Micron [MU] and Samsung. 80% That’s huge. So is DRAM out of the woods? At least for once the prospects are encouraging that some of these players will finally dig their way out of the OTC graveyard.
Just a quick note that although I had posted long ideas in airlines recently, you may wish to take some off the table or exit the positions altogether with the terrorist news on Christmas Day. We’re talking tighter security restrictions and all around a not fun time flying going forward. If going short, look for setups and keep stop losses in place. Be careful-
