This company is a logistics technology solution company. It also provides mapbased routing software that combines with wireless, GPS, and automated call-out technology to help small- and medium-sized organizations in the home delivery and distribution industries. With high energy prices, this company is poised to benefit from this. The stock is hovering near its 52 week low, at $3.28. DSGX stock is establishing a base. Look for strong earnings to be the catalyst to push the price higher. Wait for profit reports before acting on this stock. In this market, patience is the key.
This storage maker is getting dragged down with the over all markets and worries about Microsoft crimping on VMWare’s core business. Closing on Friday at $14.77, it’s very close to its 52 week low of $14.01. Never the less, EMC’s story is still compelling. The company is still growing its business and is entering the consumer market with the purchase of Iomega. Internet usage will only grow as more businesses cope with higher oil prices. Furthermore, EMC has a clean balance sheet.
With more likely announcements of further write-downs, it is still too early to start picking at financial stocks. Citicorp and Merrill Lynch are expected to announce billions in dollars of write downs. Not surprisingly, their stocks and the XLF are hitting new 52 week lows. From a technical perspective, these securities are going lower. In this type of market, it’s best to start looking at the strongest players in this beaten down sector. They include Goldman and JP Morgan.
High oil prices are changing the way people live and how businesses are conducted. Unfortunately for the Big 3, their cash cow derived from selling high margin trucks is collapsing. American consumers are either stopping driving or switching to more fuel efficient smaller cars. The bad news is the development could be a start of a trend. Within the American auto industry, there will be more painful corporate restructuring. Vehicle sales are likely to drop below 15 million vehicles annually. The stocks are both breaking new lows, a negative technical sign. There is no catalyst to get into these stocks.
On a brutal Thursday, the Dow dropped close to 360 points to close at 11,453. The 52 week low is 14,280. Surging oil prices, a battered consumer and weak corporate earnings are feeding the negative sentiment. Analysts are quickly revising earnings estimates downward. Looking at the chart, the immediate targets are 10,750 if the 52 week low is broken. Downward momentum is extremely negative. It is best not to catch a falling knife. The next big level for the Dow is at 10,000.
Research In Motion is getting whacked on missed earnings and less than stellar earnings. The stock is down over $15 so far this morning. Over the long term, the growth story remains intact for the company. They are rolling out new products, entering the consumer markets and so far has few viable competitors. The P/E premium will likely shrink until the company proves to investors that they can deliver better than expected results. Wait until the stock corrects to its 200 day moving average, in the $110 range, before looking at it.
The weak economy and surging oil prices are hitting Ford hard. $130 plus oil hit their profit forecasts hard as their truck sales collapsed. At $5.46, the stock is near its 52 week low of $4.95. The stock could have a bounce back to its 50 week moving average at the $7 level. The catalyst would be a strong oil price correction. Longer term, Ford is doing the right thing. They are improving the quality of their products, cutting costs and their pipeline of new products look quite promising. After all, Kirk Kerkorian is putting money where his mouth is.
Thanks to rising energy prices, big houses and light density suburbs are quickly losing their popularity. Whether it’s utilities or transportations costs, the costs of living in the big houses outside the city is becoming less affordable for many Americans. With less tax revenues, many of the promised amenities such as schools and parks might not be built in these towns. Home builders whose business models are based on developing tracts of MacMansions will soon cease to exist. In time, people will migrate back to the city and use more public transportation.
The Fed is likely to keep their key overnight rate at 2%. Despite rising food and energy costs feeding inflation, they will stay put for some time. They will pay lip service about fighting inflation to prevent the dollar from going into a free fall. Unlike the ugly stagflation of the seventies, labor costs are in check. Thanks to access to low wage countiries, companies can shift work where costs are the most competitive. With the weak economy, housing and stock prices are dropping. The financial industry is still coming to grips with the credit binge from the last boom cycle.
UPS said it expects to earn 83 cents to 88 cents for the quarter, lower than its previous guidance. It originally anticipated earnings between 97 cents and $1.04. The culprits are a weak U.S. economy and soaring energy prices. In reaction, the stock hit a new 52 week low at $62.83. Looking at the charts, the stock seems poised for a major move down, towards the $50 to $55 area. At these levels, the stock is a better sell than a buy. The catalyst for the move down is likely to be higher oil prices. Don’t try to catch this falling knife.
