Simple Trading PayPal & U.S. Steel

Flames

Trust yourself. Create the kind of self that you will be happy to live with all your life. Make the most of yourself by fanning the tiny, inner sparks of possibility into flames of achievement.

— Golda Meir

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I’ve been known to tell people that a good trader can make money from any liquid, freely traded stock or ETF.

I have, of course, been both lauded and the subject of derision for this belief.

What I haven’t been is proven wrong.

So I thought it might be interesting to run some of the stock and market calls of others through my process on a regular basis for your review/benefit/criticism as the case may be.  Some of these will be public.  Others will be for members only.  Regardless, I hope you find these useful and, better, you’re inspired to create your own process/filters.

Today’s candidates are PayPal and U.S. Steel.

PayPal – PYPL

PYPL W 28 August 2015

Current Trend (W): Down (based on lower low)

Abv/Below Value Zone: N/A

Next Scheduled Report Date: N/A

52 Week High: $42.55 (20 July 2015)

52 Week Low: $30.00 (24 August 2015)

Current Relevant Resistance: $35.46 (25 August 2015 Hi)

Current Relevant Support: $30.00 (24 August 2015 Lo)

Recent Close: $35.04

Fundamental Analyst

Recommendation Summary: 2.1 (on a scale of 1 [Strong Buy] to 5 [Strong Sell].

Price Target Summary [24 Brokers]: Mean $43.88; Median $45.00; Hi $50.00; Lo $30.00

Comment: PayPal was spun out of Ebay to the public in early July.  As such, the stock doesn’t have sufficient trading history for my methods, but I want to focus on picks from Barron’s this week.  The accompanying article (subscription required) for the bullish call cites the proliferation of the digital wallet as support for the company’s potential.  I agree that there is tremendous growth potential in the field as evidenced by the sheer size and growth of digital transactions as well as the number of players trying to grab a piece of the pie.  Interestingly, I and many other online businesses only accept PayPal since it eliminates the need for customers to share their specific financial information with more than one place… and I think that trend is growing… fast.  Still the eyeball trend is down on the weekly and will remain so unless price can exceed $39.91 which is the high for the week ended 7 August 2015.

 

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U.S. Steel – X

X W 28 August 2015

Current Trend (W): Down

Abv/Below Value Zone: Below

Next Scheduled Report Date: 26 October 2015

52 Week High: $46.55 (17 September 2014)

52 Week Low: $14.19 (26 August 2015)

Current Relevant Resistance: $20.13 (26 January 2015 Lo)

Current Relevant Support: $14.19 (52 Week Lo)

Recent Close: $16.78

Fundamental Analyst

Recommendation Summary: 2.9 on a scale of 1 [Strong Buy] to 5 [Strong Sell]

Price Target Summary [14 Brokers]: Mean $25.36; Median $22.00; Hi $45.00; Lo $13.00

Comment: Barron’s made a value based long call (subscription required) on U.S. Steel last weekend.  The author suggests the company should turn a profit in Q4 and the stock trades below Book Value.  Not a bet I would make, but, then I prefer trading with established trends except in the rarest of instances.  X has been in freefall for the better part of a year.   The stock crossed down through the bottom of the TVZ at the end of 2014 and has only been able to test it from below since then.  It finally broke long term support extending back to April ’13 just this week.  The yellow horizontal lines  above reflect a number of resistance points that X has to eclipse before looking like a reasonable long play.  I would stay on the sidelines until then.

KIS,

The Trader

 

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Simple Trading Inspiration: Move Mountains…

mountain top

“That’s been one of my mantras – focus and simplicity. Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because once you get there, you can move mountains.”

— Steve Jobs

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