Despite the weak outlook for fossil fuels, uranium is not dead. Demand for uranium is expected to stay robust as developing countries such as China add more nuclear power plants to feed their growing demand for electricity. Furthermore, nuclear energy is seen as a way for nations to deal with climate change. For the aggressive investor, UUU offers a leveraged play within this sector. The greatest risk for this stock is political. The bulk of their assets are located in Kazakhstan, a country where the government is not totally trusted by private corporations. Never the less, UUU is trending upwards, recently breaking the $3 resistance level. At $2.91, the stock is trading above its 50 day and 200 day moving averages. Support lies at $2.75, the 50 day moving average. As long as a base is being built, UUU is poised to retest $4.10.  

GE shares are up 8.56% to $13.31 on Goldman Sachs’ upgrade of the stock and doubts that the industrial conglomerate will have to split off its giant lending arm as a result of a financial sector reform proposal in Congress. For the stock to maintain an upward bias, it needs to break the 200 day moving average or $13.50 on heavy volume. There is also significant resistance at $14.50. Support for the stock lies at the 50 day moving average or $11.75. Until GE is able to trade above its 200 day moving average, a bullish case cannot be made for GE. It needs to break the major resistance levels before investors can get excited about GE. 

HMC posted better than expected results, registering a small profit instead of a lost. They are also raising their outlook as more signs of an economic recovery takes hold. HMC has been outperforming most of their peers by focusing on a tight model line up, and making reliable and fuel efficient vehicles. The stock has risen sharply from its March low of $17.35. It did get as high as $31 in May. Given that we are in the summer months when trading activity drops, HMC will probably consolidate its gains. The likely range is between $26 and $31. Once auto sales pick up significantly, the aggressive investor will look at more leveraged plays such as the auto parts manufacturers and Ford. Compared to its peers, HMC has a lower beta. 

Intel gave hope that the technology sector is finally recovering and Microsoft reminded us that the economy is still struggling. Before their earnings release last Thursday, MSFT climbed to the high $25 area on hopes of Intel like profit results. Instead, they missed sales projections by $1 billion. As a result, the stock sold off after the revenue miss. Longer term, the bullish case for MSFT is that they are starting their new product cycle for their major offerings, particularly their new operating system. The software maker is also sitting on a healthy cash reserve. Despite the poor results, MSFT is still holding at the 50 day moving average. A break below this level means the next levels to be tested are $22 and $21. At these levels, MSFT begins to look attractive again. 

So far in to the earnings season, the bulk of the corporate reports have been better than expected. Much of the strong results have been attributed to aggressive cost cutting despite flat to lower revenue. Even with the lack of top line growth, investors have been snapping up stocks on hopes that an economic recovery will take hold towards the end of this year. Since mid July, the S&P 500 has rallied from 750 to 850 on back of strong results companies including Ford, IBM and Intel. For the rally to continue, confirming the start of a new bull market and not a bear market rally, investors want to see companies posting revenue growth. This will only happen when the global economy starts expanding and when jobs are being created, not slashed.   

The aluminum maker is showing strength on the charts. AA has broken short term resistance at $10.80. With more signs that the economy is bottoming, investors are going for more risk. This means shifting from defensive stocks towards cyclical stocks such as AA.  Adding to the bullish case for aluminum prices is low inventories and even ramp up of demand within the auto industry. Strong support for the stock is at $10 or the 50 day moving average. The stock is poised to test its June highs around $12.25. This is a stock to buy on dips.

Thanks to Ford’s surprise profit of $2.8 billion in the second quarter thanks to its debt reduction efforts, the stock has broken its old 52 week high of $6.54. The stock is currently at $7.01, up $0.63. Their operations are still showing losses due to historically low car sales. If auto sales begin to recover back to 12 million units annually, Ford expects to post a profit in 2011 thanks to new product introductions and continuing cost cutting. For those bullish on Ford, the stock needs to be higher on heavy volume and see strong support forming at its old high of $6.54. The next target on the upside is at $9. Major support for F lies at $6 or its 50 day moving average. 

Unlike the other major banks such as Goldman Sachs and JP Morgan, WFC does not have a strong presence in the areas of trading and investment banking where healthy profits were made. The area of worry for investors is their loan portfolio that is showing growing losses. With heavy exposure to the state of California, non-performing loans are growing due to still high rates of foreclosure and double digit unemployment. After the release of its less than stellar second quarter earnings, WFC shares are down $1.40 to $23.95. Looking at the charts, WFC is looking to retest the $22 level after failing to break resistance around $27. Unless the economy begins to show actual signs of recovering, the stock will likely trade in a range between $22 to $27. If drops to its next support level of $20, WFC then becomes interesting. 

CSX, a railroad service provider, is approaching key resistance levels at $40. If $40 is broken, the next target is $47.50. For investors that believe in the Dow Theory, the transportation index is the tail that wags the dog. The argument is that if the economy is vibrant, it will be reflected in higher activity within the transportation industry. More people would be travelling and more goods and commodities need to be shipped. The downside for CSX is $34, or the 200 day moving average. A positive development for the stock is the 50 day moving average crossing the 200 day moving average. A break above $40 on heavy volume would confirm the upside momentum. 

CNQ the Canadian based energy company, is definitely a trader’s stock. It has enough volatility and sufficient trading volume for the astute trader to profit from. The company has little political risk in that most of its assets are situated in Canada. Much of their production growth comes from the oil sands in the province of Alberta. The direction of the stock price is influenced by the price of oil. The expected trading range for a barrel of crude in the short and medium term is $55 to $75. The 52 week trading range of CNQ is $26.43 to $89.87. It is presently trading at $58.43. The chart suggests that the stock could retest its June high around $65. At this level, it would be time to take profit. A good entry point is when the stock is near its 200 day moving or around $44.