Stock / ETF Model / Chart Commentary

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Preview of FocalEquity Stock Ranking Model

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The FocalEquity Stock Ranking Model is a predominantly fundamental driven stock ranking model. Within the model, we do incorporate two technical related factors that involve the stock’s various moving averages and contrarian indicators. We combine our stock ranking model with our technical analysis/charting based capabilities and determine the long and short stock candidates within various industry groups.

Today, we present three stock examples to illustrate our model and our technical analysis capabilities. We have two long picks and one short pick.

As you can see, our long picks GORO (Gold Resource Corp) and ALN (American Lorain Corp) both have attractive valuations from the perspective of valuation metrics such as price-to-sales, price-to-book, earnings growth relative to P/E and EBITDA relative to the company size compare to their peers within the gold and silver and food and kindred industries respectively.

Chart of GORO and Technical Analysis Commentary

 

 

GORO - long 
The FocalEquity Stock Ranking Model showed GORO as a candidate for going long.  The above chart is the daily chart of GORO.  It has been moving sideways since December 2010; and in July 2011, it may have taken out some weak longs when it went below the support level.  At the moment, there is possibility that a triangle is forming within this trading range, ready to break-out.

 

Chart of ALN and Technical Analysis CommentaryALN - long

 

ALN is a long candidate based on the ranking model.  This stock had a strong move up in July 2011, and then pulled back to minor support (which was once resistance).  It now looks like it can make another move up based on the weak pull back. 

 

On the contrary, our short pick RRC (Range Resources Corp)’s valuation metrics are not as attractive compare to its peers within the crude petroleum and natural gas industry.

RRC - short 
The FocalEquity Stock Ranking Model showed RRC as a candidate for going short.  A line is drawn from the recent low in August 2011, which has been support in the past as well.  The decline from the peak in the early part of August has been strong.  It’s possible that a test, or even a break, of the August low is coming.

To download a free copy of our complete stock ranking for the week of 8/22/2011, please go to www.focalequity.com to obtain the Excel file.

 

FocalEquity Leveraged ETF Model Results for the upcoming trading day of 8/22/2011

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Leveraged ETF Commentary

The leveraged ETF model has accurately predicted the run on the bear ETFs in small cap (TZA), emerging market (EDZ), China (FX) among other bear ETFs for the past few trading days. While the model continues to recommend new buys and holding the bear ETF positions, at this point we caution our viewers NOT to do so. At this point, we would not take the positions in the short ETFs.  The charts below illustrate the current situation across the board for the bear ETFs and we decided to hold off on buying the bear ETFs at this moment.

 

 

 

SRTY - ETF 
SRTY is long candidate from the FocalEquity Leveraged ETF Model.  This ETF had formed a trading range, and then broke out to the upside from the trading range in the early part of August 2011.  It has already pulled back to the top portion of the trading range, and has started a small rally.  We think the opportunity to make a quick trade from the reaction is now missed.



TZA - ETF 
TZA is also a candidate for a long position; but similar to SRTY, TZA has already reacted to the re-test.  The opportunity to go long in this ETF is probably also missed.

To download a free copy of our complete ETF ranking for 8/22/2011, please go to www.focalequity.com to obtain the Excel file.