9 Money Making Stocks for 2009 and 41 Bonus Picks (and some dessert)

It's here....
The long awaited 2009 stock pick list... (enter heavenly choirs singing)

As promised here are the stock picks for 2009. I've titled these, appropriately, 9 Money Making Stocks for 2009 and 41 Bonus Picks. For those of you who may still have some math trouble that's a really fancy way of saying 50 stocks!

Before I reveal the list I need to lay a few ground rules and give an overview of the post.

First of all this is simply the list. The full report will be out sometime next week ready for download. In the report I will offer a complete analysis of the top 9 picks (this is insanely valuable - we can't even put a price on it really). The remaining 41 picks have some analysis and information but not a complete analysis.

Dessert picks. The "dessert picks" are stocks that don't even come close to making our criteria for 2009 picks. However due to the unique market circumstances of 2008 we have a plethora of great stocks that are so undervalued you can't help but buy these guys. Of course I never suggest buying a stock without some sort of clear profit strategy so all of these dessert picks are potential stock purchases that also allow some good cash flow from writing covered calls. In the full report I give analysis as well as the "Dollar-Cost-Zero" point (that's the point at which you've recouped all of your investment and this stock could fall to zero and you'd still be making money).

Criteria: There are 6 key factors that went in to making these picks. Unlike what many of you consider "traditional stock picks" my picks are a bit different. I really don't care if they're going to go up over the next 6 months. I really don't care if they're going to go down. All I care about is that we can trade them and make great money. So here's the criteria. In the full report (again available next week) I detail more why each of these top 9 picks meet the following criteria:
1) Must have Good Volume (at least 1M average) and good Open Interest (on the options)
2) Must be Optionable
3) Must have a history of Predictable Trading Patterns
4) Must have a Good Immediate Trading Range (at least $10)
5) Must be in a Sector With Some Excitement
6) Must have "Room To Bust A Move"

Bonus factors:
- Important News
- Important Product Releases Upcoming
- Important 3rd party Factors

These are the criteria. The Top 9 have been selected because they meet or exceed these criteria the best. It's only fair to add there is probably a slight personal bias to some of these picks as well seeing as many of the additional 41 picks could have been a top 9 pick (but there was only 9 slots). (these top 9 will absolutely be looked at in great detail in our Foundations of Stocks and Options Class as we will track them as a class)

As for the 41... These guys meet the majority of the criteria. However in most cases each of these picks has at least one factor that prevents it from meeting all 6 criteria on a consistent basis. The most common factor is usually Volume or Open Interest related. That's not to say these picks are not great picks, you just have to be more aware when trading them and check all of your important liquidity factors.



Our Goals: And finally I should re-iterate our goals with these picks. We are not looking for stocks that will move higher. We are looking for stocks that will MOVE. And more specifically we are looking for stocks that will move a lot, often, and in a predictable pattern. So with no further adieu I present...


Top 9 Money Making Stocks for 2009

1. AAPL - Apple Computer
   
2. AZO - Auto Zone
   
3. BIDU - Baidu
   
4. GOOG - Google
   
5. PBR - Petro Brasil
   
6. RIMM - Research in Motion
   
7. SLB - Schlumberger
   
8. SHLD - Sears Holdings (this one is kind of unlikely and special - I detail it in the report)
   
9. MA - Master Card
   

And the 41 Bonus Picks:

1. ADM - Archer, Daniels, Midland
   
2. AMZN - Amazon
   
3. ALK - Alaska Airlines
   
4. AVB - Avalon Bay
   
5. AXP - American Express
   
6. BA - Boeing
   
7. BBY - Best Buy
   
8. BBBY - Bed, Bath and Beyond
   
9. BTU - Peabody
   
10. CAT - Caterpillar
    
11. CME - Chicago Mercantile Exchange
    
12. CMG - Chipotle Mexican Grill
    
13. CVX - Chevron Texaco
    
14. DE - Deere & Co
    
15. DECK - Deckers Outdoor
    
16. EQT - Equitable Resources
    
17. FCX - Freeport McMoRan Copper & Gold
    
18. FDX - Federal Express
    
19. FSLR - First Solar
    
20. FWLT - Foster Wheeler
    
21. GILD - Gilead Sciences
    
22. GRMN - Garmin
    
23. GS - Goldman Sachs
    
24. HAL - Halliburton
    
25. HANS - Hansen Natural
    
26. HES - Amerada Hess
    
27. IBM - International Business Machines
    
28. ISRG - Intuitive Surgical
    
29. JNJ - Johnson & Johnson
    
30. MMM - 3M
    
31. NOV - National-Oilwell
    
32. OXY - Occidental
    
33. POT - Potash
    
34. RIG - Transocean
    
35. SNDK - Sandisk
    
36. SUN - Sunoco
    
37. TXN - Texas Instruments
    
38. VLO - Valero
    
39. VMW - VM Ware
    
40. WYNN - Wynn Resorts
    
41. XOM - Exxon Mobile
    

And Dessert: (These picks are good candidates to buy and use for writing covered calls if you like that strategy)

• AIG - American International Group
  
• BAC - Bank of America
  
• C - Citigroup
  
• DRYS - Dryships
  
• GE - General Electric
  
• LAMR - Lamar Advertising
  
• MOT - Moterola
  
• RMBS - Rambus
  
• SNDK - Sandisk (also on our 41 bonus list)
  
• WFMI - Whole Foods Market
  

And there you have it. A total of 60 potential trades for you to enjoy during 2009. As I mentioned the full report will be out sometime next week and you can dig further into some of my analysis.

If you take a look at this list and don't feel excited I encourage you to look at the charts. If you look at the charts and don't feel excited, well then I'm going to encourage you to take my class. In fact I'm offering the first section of my Foundations of Stocks and Options class for free during February. This is a $400 class and not only will we be looking at these stocks but by the time you get done with my class I guarantee you will be excited about this list.

To sign up for the free report sign up here:
http://www.thefinancialpuzzle.com/report09.html
(it will be emailed to you next week sometime)

To sign up for the free class visit this link here:
http://www.thefinancialpuzzle.com/free/foso4.html

Until next time as always, Happy Trading.

J-Dub

2009 Stock Picks Coming Thursday!

It's been a long time coming... my students have been begging...

Forums are buzzing...

The Financial Puzzle 2009 Stock Picks are coming Thursday!

What is the list?

There are 6 key criteria that each of our picks must meet:

1) Good volume and good open interest.
2) Optionable
3) History of predictable Trading Patterns.
4) Good Trading Range with Good Profit Potential (at least $10/share)
5) Sector with some sort of excitement
6) Room to bust a good move.


Will your favorite stocks make the list? Will they even stack up?

Find out on Thursday...


In the meantime be sure to sign up for our Once In A Lifetime Offer where we are allowing 97 students to take our Foundations of Stocks and Options class for free. Be sure to sign up!

VMW - A Good Trade Setup

In preparation for my new 2009 stock picks report I've been trolling through several old stocks I use to trade. VMW is one of them and while I haven't traded it for a while I thought it might be fun to take a look at it again. Sure enough a pretty decent trade is set up for us. Look at this chart:

Okay, so what make a good trade setup? Well first of all consider the over all market. The market as a whole is forming a triple bottom. This is a good thing as triple bottoms generally (almost always) follow through with some sort of bull rally. Since the over all market is forming triple bottoms one can also assume many stocks are forming them as well. An analysis of several stocks will show a common pattern of triple bottoms with the last bottom not quite making it back down to support. It looks like that's what we have here with VMW.

Why? First of all the last 4 days (before yesterday) showed a testing of support. Not the support we saw tested back in Dec, but it held 4 days in a row and could easily follow the pattern so many other stocks are following right now.

Secondly, yesterday's large doji day indicates the interest in pushing this stock higher is good. Granted we have some earnings news playing in the picture which was a bit intimidating for traders, but the fact we didn't break support of the last 4 days is a strong sign.

Thirdly the bullish engulfing candle from Friday indicates a potentially good strong bullish move in the next 2-4 days.

And finally the indicators are all turning relatively bullish on this stock confirming we could have a good bullish run coming.

So where will it go?

Well worst case we're looking at one more level of retracement back down to the $18 range - that's about a $4 move down. With some good cheap options you could make some quick money on that. But the much better and more likely move would be the bullish move up. If we can get some confirmation of the bullish move in the form of good volume and a price follow through above yesterday's high we are looking at a first level move up to about $27.50 and a secondary move up to $32. That's a minimum and on up to a potential $10 move that could easily occur in the next 2-4 weeks.

When? Give it a day or so to watch the earnings news fully kick in. I think today traders are a touch skiddish because of VMW's forcast for lower revenues - but come on everybody's forcasting lower revenue and everyone knew it was coming. When traders realize this stock is going to hold it's support the move should happen pretty quickly.

If this analysis sounds exciting and you would like to be able to do the same analysis on any of your stocks sign up for my Foundations of Stocks and Options Course - We're letting 97 students into our February class free!

"Jeremy . . . You're Crazy!"

That was exactly my reaction to Jeremy's idea for our big launch - to give away our Foundations of Stocks and Options live class to nearly 100 students! Here I thought we were developing a business model, but Jeremy's been thinking of a non-profit strategy all along!

For those that don't know -- The Foundations of Stocks and Options (FOSO for short) is our flagship educational series that's taught live in a webinar format. We've been beta testing for a while now and have had amazing responses from our students. I think Dr. Fred Kleiner's was my favorite, though:

"I really like how you make the concepts so clear and easy to understand. Having studied this before I have never had these concepts taught in such an easy, clear, and straightforward manner."

And that is exactly what we want to be about. A laid back, no-nonsense approach to the stock market . . . and it sounds like our students are getting that.

So, I've agreed to let Jeremy have some fun and completely fill up our first "official" class (our webinar provider is going to love us for that!). I would love to see you guys there and maybe get a chance to talk live for a change. Sign up right here and it will bypass our checkout system (use the promo code: BLOGGER). Also, please feel free to pass this post on to anybody you would like. Trading is always more fun with a friend and -- this is a great time to take advantage of Jeremy's benevolence and get in for free! Lastly, we added a handy "share this" icon at the bottom of the post if you feel like broadcasting our post to the world -- we'd appreciate it!

Week In Preview - January 26-30, 2009

Well it's Sunday night. It's time to take another look at what's coming down the pike for the week. Let's start with the chart as pretty much everything you need to reference is on this one image.


Okay - so things are looking a little uh - flat - shall we say? You always here me say the market can go up, down, and nowhere at all. After the volatility of the last couple months I think most people are pretty pleased with a no-direction market. Frankly with the new president taking office I kind of half expected to see some movement. But maybe the country is just standing still waiting to see what his first big moves will be... who knows. Let's look at what the chart is telling us.

For starters the most important thing about this chart is the support lines drawn off the low back in Oct. 2008. That support was basically confirmed 4 days in a row this week. Not only that we have the tops of those days forming a pretty decent descending wedge. Occurring where it does on the chart I take this to signal a potential bottom. I'm not going to be surprised to see this guy bust a bull move in the next few days - probably tomorrow.

Here's my reasoning:
1) 4 days in a row confirming support
2) Tuesday/Wednesday formed a candlestick tweezer
3) Thursday/Friday formed a small wedge
4) All of this is occurring at the major support line which coincides with the long candle day from Oct. 10, 2008.
5) Thursday/Friday both had long lower wick candles indicating some strength from the bulls could be mounting
6) Wednesday, thurs, & Friday could look a lot like a falling three candle pattern. Remember it doesn't have to fall with 3 days in the middle to basically mean the same thing. Monday, Tuesday, or Wednesday could easily bust a bull move and complete this pattern indicating a pretty decent little bull trend is likely. (If you remember the falling 3 is the same candle pattern I recognized and wrote about back in Sept. predicting the October bear trend - only it was a falling 3 instead of a rising 3)

All of that to say this week should be pretty interesting. I'm pretty confident we're going to see some movement one way or the other this week. I would tend to expect bullish - but if we break that support line we could certainly drop down another notch to establish a more solid support around 7500.

I'm going to continue trading pretty flat strategies this week, although I may throw in a couple bullish trades if things set up well. As always it will be interesting (and fun!)

As always, happy trading.

J-Dub

Our Story... The Launch of The Puzzle!

Hey guys -- Sorry the posts have been a little sparse recently. Jeremy and I have been really consumed with officially launching The Financial Puzzle - but that's actually great news for you. We have developed an amazing amount of resources in a relatively short time (literally hundreds of pages of material.) Much of this is going to be offered for free! We are also developing strategic relationships with other key companies to help us facilitate our teaching -- and your success as traders. I thought it would be appropriate however, to pause for a moment and reflect on how we've arrived here.

The Financial Puzzle really began over 12 years ago when Jeremy and I first met in college. In our friendship, Jeremy has always been known to have ideas that were "bigger than life," and I've always acted as the "facilitator." This has worked out well and together we've accomplished amazing things in life. Typically this is how one of our ideas is conceived.

"Hey Josh, I had this crazy idea..."

Ilisten carefully while immediately figuring out the viability of the crazy concept. Typically this occurs while drinking Dr. Pepper (I don't think it's scientifically proven, but we think it makes us smarter.) After careful consideration and a couple hours of dreaming we usually conclude as I say:

"Honestly Jeremy,I think we can do this... and if it doesn't work I'll always think it should have!"

That is exactly how The Financial Puzzle started too! Like everything else we've done, Jeremy and I decided to work together as traders. What was unique about this endeavor is that we seemed to struggle at every turn. I can remember a couple very specific times that we wanted to quit. Our frustration was consistent -- finding a comprehensive educational program that would give us all the information and tools necessary to be successful traders in an easy to understand, down-to-earth format. We knew it could be done -- obviously since people were doing it all over, and we were determined to figure out how. We endured as we gained our education from the school of Hard Knocks - which can have a very expensive tuition for traders! However, we officially graduated and the investment in our education has proven to be priceless.

The Financial Puzzle was then the outgrowth of our interactions with other traders that had a similar frustration toward education. There just isn't a product out there that is comprehensive enough to make you a successful trader in and of itself. As we've met these frustrated traders we've always been glad to share the lessons we've learned along the way. Ultimately, our contacts spread across the country (literally from California to NY), and we found the webinar format to be the most convenient tool to facilitate our teaching. We have since gone through and systematically developed our comprehensive trading educational series: Foundations of Stocks and Options. We are very pleased to have received wonderful reviews from our beta students!

We will keep you updated with our progress. In the mean time, please come check out our Free Report: How to Retire in One Year with Only $10,000 and our E-Course: Basics of Stock Options. Both of these are free and we would really enjoy your feedback. Also, we welcome your ideas for subjects you'd like to see covered in subsequent materials. Please feel free to email us or comment right here on the blog.

Looking forward to seeing you in class!

What Does Apple Mean Without Steve Jobs?

If you haven't heard the news yet Steve Jobs has taken a temporary leave of absence from Apple until the end of June. For several months health has been a concern. After taming concerns last week today Jobs made the announcement. So what does this mean for apple?

As always the price of a stock is going to reflect the news. At one point today AAPL haulted trading. Once they started again the stock dropped about 10% pretty quickly. It finally settled the day closing after hours at $79.25. Tomorrow will be interesting to see reaction as the news spreads. In the morning I can almost guarantee a bearish trade will be present. Today obviously would have been a good day to place a strangle had we known the announcement was coming - but we can't trade the past.

For tomorrow I'd suggest sitting at the computer if you want to make some money. The trades could swing pretty wide depending on how news flows in and out. Eventually by the end of the day the price should settle after traders, institutions, and all those floating stocks around get their minds wrapped around the new face of Apple. The bigger question is where will the stock land? This news may break our AAPL, RIMM similarities that we had going as Apple is likely to fall a bit more. We'll see.

The next level on the chart would be around $73.00. If that holds then the fallout will not be so bad. If the $73 mark does not hold we're probably looking at a new support level down around $60, the top of the window gap from back in July 2006. Of course the ultimate fall on this stock would be down to the $50 support from July 2006. I can't imagine AAPL falling below that.

Anyway you twist it there appears to be some good trades left on AAPL before next week's earning's announcement. Watch volatility pricing in the options. It can really stick you at times like this.

Congratulations to our EXPERT!

At Financial Puzzle we are proud to celebrate with Jeremy (many of you know him as J-dub) on his recent award from EzineArticles.com. Jeremy has been recognized as one of their premier contributors and have awarded him the title "Expert!" He has also been featured regularly on their homepage and had several articles recently distributed for publication. We are proud of Jeremy and look forward to more great material!

A Couple Bearish Days Leading to Support

If you read my post on Friday you know I'm mostly bullish for the short term on the DOW, however it looks like we'll have a couple more bearish days before we make it back down to support. With so many stocks settling into some consolidation channels it makes a lot of sense the DOW would as well.

While we do have the major support dip down to around 7500 back in Nov, I would expect this support to hold just north of 8000. Of course we'll see. A dip down to the 8k range and then a turn upward should provide some good momentum to make some bullish trades in the market. In the meantime be extra careful with bull trades and try to grab a few bearish profits while you can.

Market Analysis

Oh where is the bottom and how do I trade? This is the question on almost everyone's mind. Hopefully I can offer some insight here.

I'll start off with the bad news. The bad news is there's not too many people crying bull. From CNBC To Fox Business, to Money Magazine, to just about every other news outlet you can find - The market looks doomed. The current issue of Traders World magazine doesn't help much. Eric Hadik of INSIIDE track is calling for 1-3 years of bearish behavior. And in the same issue Robert Giordano is calling for DOW support at 7150. Could they be right? Yep - they could be. They could also be wrong.

Take a look at this chart:


Okay, I know at first glance it looks like Chinese... or something. But there really is logic here. From a pure theoretical standpoint the bears could be right. There's the whole 17 year theory, the 34 year theory (which go together by the way) the presidential year theory, the "I made up a theory" theory - and not to mention the extreme negative bias by the media which tends to manifest in bearish behavior and sentiment.

However, from a pure charting standpoint there's hardly any reason to be bearish - in fact there's almost completely nothing but bullish signals. Let's look at a few of them.

First of all let's talk about the support line: My personal lines for support sit between 7500 and 7750. Giordano could be right with his 7100 range but I think that's pretty forgiving, certainly when paired with what I'm about to show you.
1) line construction - Giordano must be drawing his lines off of candle wicks. It's fine, but sometimes not consistent. I'm drawing mine off of a line chart.
2) Iterations - There's really only once way back in 2002 where support was found in the 7100 range, however there are 3 times on the line chart where my support held. And when we add candles for confirmation there's a total of 7 iterations dating back to '97! (This is using a weekly chart)
3) With a daily chart we see massive support in Oct. '97, Oct. '98, Jul & sept 2002, March 2003, and assuming it holds now oct/nov '08.
4) Patterns: There are currently no trends in place. We see a sideways channel. A channel can last for 3-4 months, or I've seen them last a year or more. A few years ago SHLD channeled sideways for right around a year. All it means in the broad picture is things are going nowhere. Already this channel has lasted 3 1/2 months. Who knows when it will break.
5) Candle Pattern: On Friday Oct. 10 we saw a massive dark candle at lunch time. At one point the market was trading around a 2400 point loss for the week. But by the end of the day we regained some value and closed the day with a high wave spinning top candle (or close enough). THAT is how bottoms are formed. I told my wife on that day "this is a good sign". Then just a few days later on the 27th & 28th we saw a massive bullish engulfing signal. Good sign #2. As is common during a basing period we saw one more major test of the bottom on Nov 20 & 21 (highlighted in yellow on my chart). The 20th threw a long dark candle, and the 21st completed the tweezer reversal pattern by showing the exact opposite on the next day. When this candle pattern occurs at the bottom of a trend it is most often a bullish reversal signal.

I will make note back in Sept I pointed out the falling 3 wedge pattern and said in the next few days expect the market to break to the downside. I was right then, and once again this candle pattern will likely provide at least some bullish move.

The sideways move we've seen in the past 3 months is completely normal and symptomatic of a market forming a bottom. Take heart if you're worried. It's very true that the other bearish indicators may prove to push the market lower, but I personally find the chart patterns to be quite accurate.

The trick about technical analysis is to balance all the different indicators. The bear guys were right - but now I think the chart is taking over and the bulls are about to run. Of course, it can all change tomorrow!

During these sideways markets my personal favorite strategies for trading are to sell options and trade as neutral as possible. Every day can be a new adventure. A lot of stocks are set up perfectly for complex option strategies. You should be able to find plenty of stocks to write Iron Condors on. And of course if you're down a bit and want to just make some income start writing some covered calls. You can recoup a good portion of your losses a lot quicker than you think!

Will RIMM follow Apple?

Hey, it's J-Dub here (that's my nick name for those of you who don't know). So we finally got everything up and running and now I can get back to blogging and throwing out some good analysis.

It's no secret I'm an apple fan. Love their computers, love their music players, love their phones - oh yea, love their stock. It's always fun to trade. However a lot of people seem to miss the fact that their evil phone counterpart Research in Motion (RIMM) is just as much fun to trade. In fact based on volume about half as many people trade RIMM as AAPL. But the funny thing we have noticed over the last year is how close the two run together.

This started appearing about a year ago, and while it's taken that long for the patterns to adjust and fully look like a mirror, over the last 6 months it's been easy to confuse the two charts. In fact one time in an online class back in October we were talking about AAPL but somehow the RIMM chart showed up. I got so confused and I remember saying "When did apple drop to $50/share?"

None the less - over the next little bit I'm going to continue this comparison as often a trade on one is actually setting up a trade on the other. If you need an easier trade then that then I think we need to talk!

Currently both stocks are forming what appears to be a pretty strong base/foundation. I'm mostly bullish on both. But I'll give better analysis in a post to come.

AAPL: Wedge vs. Divergence

AAPL is trading right into a falling wedge with the 50 EMA acting as strong resistance while simultaneously showing bullish divergence against MACD. Typically, each of these individual signals indicate different moves: the falling wedge is bearish and the bullish divergence is... well, bullish. However the failed break back in late November is certainly giving this a more bullish feel. Additionally, we are at a very strong, 2 year support level around that $84-$85 range.

This is a great time to set up a bracketed entrance as our anticipated downside target is $71 (with a pause at $80) and conversely the upside potential is roughly $110. This is also a great example of the moving averages forming the wedge for us as we see the price caught between the 20 EMA and the 50 EMA. Look for AAPL to trade sideways for a few more days with an entrance into a trade as the price breaks through either one of these averages. Remember to confirm the break based on volume and a tested pull back and I'd have obvious caution in the event of a downside move at the $85.27 support.

Below is a chart of the analysis. I've also posted a larger version here:

As always, Happy Trading!