June 9th - HSY MKC K SGP NVS SNY JNJ GSK
Cramer had his new "Friday - plan for next week" show. He picked some well known defensive stocks in anticipation of the federal reserve continuing to raise rates. Below are the picks and their price information:
HSY Hershey Co.
Close $55.46
AH High $55.80
MKC McCormick & Co. Inc.
Close $33.23
AH High $33.57
K Kellogg Co.
Close $47.00
AH High $47.45
SGP Schering-Plough Corp.
Close $19.22
AH High $19.50
NVS Novartis AG
Close $53.74
No Trades After Hours
SNY Sanofi-Aventis
Close $45.25
No Trades After Hours
JNJ Johnson & Johnson
Close $61.38
AH High $61.50
GSK Glaxosmithkline plc
Close $54.65
AH High $55.09
Not a lot of action with any of these after hours, probably because they aren't very exciting, well known, and expensive to name a few possible reasons. People obviously want the "next big stock" and these defensive plays don't offer that, even though with the recession looming these are the places that people should be in. So ironically these didn't get bid up, and I don't expect much action come Monday morning either so not much of an opportunity here on the short side.
posted by CramerTracker @ 6/09/2006
5 comments
Comments on "June 9th - HSY MKC K SGP NVS SNY JNJ GSK"
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Anonymous said ... (June 11, 2006 11:55 PM) :
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Anonymous said ... (June 12, 2006 2:14 AM) :
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CramerTracker said ... (June 12, 2006 10:17 AM) :
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Anonymous said ... (June 12, 2006 10:40 PM) :
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CramerTracker said ... (June 12, 2006 11:02 PM) :
post a commentStumbled onto your blog.
Not too many comments.
Curious what criteria you use to decide whether to short one of Cramer's pop-ups?
Elaborate the the best you can.
Thanks.
Protest Ben Bernanke now!
http://www.ben-bernanke.blogspot.com/
Yes, the comments are up and down. Sometimes lots one day and then none for weeks.
My criteria, which is not an exact science, involves looking at a lot of different factors about the pick itself after weeding out certain picks like “the next Google”, commodities, big well known companies, and a few other things I mention in “my shorting rules” that can be seen on the right side of the page under “Links”.
After finding a stock that has potential I look at:
How much did it go up after hours?
What sector is it, and how has that sector performed for shorting in the past.
The current short % and number of days to cover. Obviously the higher the % and days to cover mean people may panic when the price shoots up and cover causing higher, longer, less predictable spikes.
Did the after hours high go above the high for the day? If not, then I won't short due to what I call the ANGO no-short rule. I came up with this rule after I cancelled an order to short ANGO one morning because I noticed this scenario. The stock then went on a huge run that day.
I also keep an eye on stocks that have hit 52-week highs after Cramer picks them. These tend to peak closer to 10:30.
In the mornings I check out INET to see where the support is for the stock. If there are just a few buyers at the higher price and if there are any large gaps in the bids.
Lately most of the time the price pop is seen right at 9:30 opening bell. The first thing I will look for is a psychological price that the stock will not likely go past and try to get a short in right around there just after the bell. If the price does or doesn't break through that price barrier, for example, the stock is trading at $12.95 and can't break $13 shortly after 9:30 is a good sign, but if it does break $13 let it run and see how high it might go. Otherwise I look to see if the price has already come down a lot from where it traded after hours the night before. If the stock has dropped too much already, without a 9:30 spike I will let it go.
I check out the Yahoo! finance page to make sure no news has come out (got burned on an FDA approval once...long story, the stock still came down but I messed up my buy to cover price...DXCM I recall).
I have also started looking at candlestick charts to get a visual of upward and downward strength to find the high to short and low to cover. Although I normally set a price target to cover at depending on the price of the stock. Stocks under $10 I look for only a .10-cent drop, under $25 a .20-cent drop and .30-cents above that and I don't short stocks above $40 currently.
I hope that answers your question.
Although I read your blog every day, I don't comment to much. I think there are others like me. I'm staring at this shorting thing after I entered the market (after years of not playing)just after May 11 when everone started selling. I think it's a good market to short using a set of rules. I have had stocks crash on me just as fast as you say they go up. There's no easy way. I think that stocks go down faster but there is a little more to think about (and risk). I'm getting reay for the end of the month, do you have a plan for June 29?
Honestly I don't short outside of Cramer's picks, even though this market has plenty of opportunity to do so. I really got interested in the concept of shorting for that same thing...it always seems stocks go down faster then they go up...not to mention everyone has a stock they buy drop right after they buy it at least once in their lives I'm sure and they must always think...damn why didn't I just do the opposite? I assume for the 29th you are reffering to the FOMC meeting? I look for another rate hike. I'm sure Bernanke feels obligated to keep going now..he won't want to look like he is backing down just because people are mad at him. I still think Cramer will be making his picks as usual, and the longer the market is tanking the easier it will be to short any semi-speculative pick he makes. I am also looking for some "bottoms" in a few stocks that I follow that I might load up on with some call options for 6 months out. I really like Lenny Dykstra's column on thestreet.com for his options strategy...he has a pretty good track record so I am trying to find some stocks to incorporate the same sort of strategy.
As always, thanks for the comments!