THE ARORA REPORT
HIGHER REWARDS, LOWER RISKS

No Verbosity,
Just Clear Actionable Information
ZYX BUY CHANGE ALERT
October 8, 2012  Issue: YXXZYVIIIZYXIIZ10A 
ALL AROUND ALERTS
New subscribers: Please see  Getting a Running Start to get the maximum value from the All Around Alerts.  To maximize profits, minimize risks, understand terminology, and set up trades, please see ZYX Change Method Trade Management Guidelines.  Positions and recommendations with a time horizon of less than six months are tracked only in the .

Please scroll down for the Model Portfolio of long-term positions and see the
 Real Time Feed for short-term positions.

A PREMIUM INSURER AT ABOUT HALF THE BOOK VALUE THE SUGAR HIGH PLAN
AMERICAN INTERNATIONAL GROUP (AIG)

AIG is one of the world's premium insurance companies. The company was founded in 1919 in Shanghai, China.  AIG was included in the Dow Jones Industrial Average from April 8, 2004 to September 22, 2008.

During the fiscal crisis, AIG almost went bankrupt and survived because of aid from the government. Now the company has been restructured and is likely to be very profitable for years to come.

By one measure, AIG is the 29th largest public company in the world. 

Here is how AIG measures up to the six screens of the ZYX Change Method.

Change Screen

During the financial crisis, the Federal Reserve created an $85 billion facility to help the company in exchange for owning 79.9% of the equity of AIG through stock warrants. At the peak, total support from the Federal Government to AIG was as high as $182.3 billion.

AIG has been selling assets to pay off the Federal Government.  As the markets have recovered, AIG has been able to get significantly better prices than most expectations for the assets it has been selling.

The latest sale of AIG stock by the Federal Government occurred on September 14, 2012 in which the government received about $20.7 billion. 

The government has received a profit of about $15.1 billion from its $182.3 billion commitment. The profit does not include the value of the remaining stake of the Federal Government which is worth about $8 billion.

Ownership of the Federal Government has now been reduced to about 15.9% from 79.9%.

The point is that the financial position of this company is changing rapidly for the better.

Fund Flow Screen

Our algorithms show that significant funds have been flowing into AIG.  Our algorithms also show that Smart Money steps up and buys the stock aggressively every time the stock dips.

Quantitative Analysis Screen

The Quantitative Analysis Screen  shows the fair value of this stock at $40.00 under present market conditions. 

The book value of the company is steadily rising and now stands at $60.58.  Over the next five years, there is a reasonable probability that not only this stock will trade near book value but the book value will keep on rising.

It is a rare opportunity to be able to buy a premier company at about half the book value.

We are bargain hunters; the cheaper a stock gets the more attractive it becomes. 

ZYX Change Analysis Screen

A big part of the credit for the resurgence of AIG goes to its CEO Bob Benmosche. Benmosche was previously CEO of MetLife.

One of the issues is that Benmosche was diagnosed with cancer in 2010.  He has been undergoing aggressive treatment and appears to be doing well.

Looking forward, there is always the possibility that Benmosche will resign due to his health.  Such an event will cause a major dip in the stock.  Such a dip will be a great buying opportunity. This is the reason that the present  recommendation is to not exceed 30% of the full core position size so that there is sufficient dry powder to build a core position at the appropriate time.

We wish Benmosche the best of health and that he remains at the helm for a very long time.  In such a case, it would be best to be content with 30% of the full core position size.

Trigger Event Screen

The catalyst behind a stock move will be lifting of the overhang of the shares owned by the government.  

Technical Analysis Screen

As of this writing the stock is right up against a major  technical resistance at $35.40.  In our analysis, sooner or later the stock will break out.  The next major resistance is $40.32 to $42.80. The first support is around $33.20 and the next support is around $31.65.  

The Technical Analysis Screen of the ZYX Change Method is supportive of the purchase based on back testing.

 Trade Management

The position is long with an average price of $27.33.  Currently, 15% of the full core position size is held. 

There are realized and unrealized profits allocable to this position from hedging program initiated on March 5, 2012.

This is a very long-term position.

What to do now?

Those in the stock may continue to hold and add near the bottom of the buy zone. 

Those not in the stock and are aggressive investors may consider initiating a small scale in within the zone of $32.75 to $35.20 and add on a dip.

Buy Zone:             $27.22 - $35.42
Target Zone:         $45.00 - $55.00
Stop Zone:           $14.73 - $17.73
Potential entry points within the buy zone:  $27.52, $28.11, $30.35, and $32.26

This is a high beta stock with a beta of 1.93.  In other words, this stock can move almost twice as much as the market moves.  This stock also has a history of trading over a wide range; this is the reason for wide zones.

As always conservative investors should build most of the position near the bottom of the buy zone with full knowledge that they may miss the opportunity.  On the other hand, aggressive investors who are not in the stock can dip their toe in the water right here.

Another edge that ZYX Change Method automatically leads to without any effort on the part of subscribers is that almost always we are the strong hands buying from weak hands.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Sugar High Plan replaces the Anti Bi-Polar Plan we have previously been following.  

The markets are not trading on fundamentals but are on a sugar high due to QE3 from the Fed and bond buying from the European Central Bank (ECB). 

Normally, a sugar high does not last very long.  However, central banks have clearly indicated that they stand ready to inject another dose of sugar if the present sugar high starts waning. 

Even though the markets believe that there is a central bank put right under the markets and therefore there is no possibility of markets going down significantly, the history tells us that the markets have a tendency to make fools of the greatest number of people when they all take the same side.

The Sugar High Plan consists of staying invested in good stocks and ETFs to enjoy the sugar high party and using antidotes against risks. 

 

THREE BIG RISKS

The market is facing the following three big risks:

  • The debt crisis in Europe is not likely to be fully resolved until 2020. In the meanwhile, there will be bouts of pessimism as well as optimism.

    Our plan is to sell on bouts of optimism and buy on bouts of pessimism.
  • Slowing growth in China is under-estimated by the market gurus. The reason is that China is still a communist country and the economic indicators released by the Chinese government, in our analysis are not reliable.

    Probability is high that the real growth in China is around 3%, less than half of the official numbers.
    Further, once in a decade leadership change in China may have unintended consequences.





  • The impact of fiscal cliff in the United States is under-estimated.  The fiscal cliff refers to the combined effect of the upcoming automatic expiration of Bush tax cuts and automatic spending cuts agreed by Congress as part of the deal to raise the debt limit.

    If nothing is done, the impact on GDP can be 2.5% to 3%. 

    The probability is high that the politicians will find a way to kick the can down the road.  However, the debate may be ugly. 



The antidotes include a combination of hedging strategies and the four simple evergreen antidotes.

 

 HEDGING

A large number of subscribers have correctly used hedging to their advantage.  However, small accounts do not need to bother with the complexities of hedging and can simply rely on the four simple evergreen antidotes as described later in this column.

Here is the status of hedging. 

  •  Hedging is like insurance.  Normally there is a loss on the hedges but they protect the rest of the portfolio. 

    We have been fortunate in that since 2007, every hedging program has not only protected the portfolio, but it has been very profitable by itself.

  • The hedging program started in March 2012 in nearly complete.  The program was primarily structured around  EUO, which is an inverse ETF that benefits from the falling euro; and SMN, an inverse ETF that benefits from falling commodity prices.

    Profits have already been realized on the entire SMN position. 

    Profits have already been realized on all but 15% of the original position in EUO. 

    EUO is long from $17.11.  Profits have been taken as high as $22.12. 

    The plan is to exit the remaining EUO position at the appropriate time.  

  •  The present hedge on the entire portfolio is based on zero cost collars employing debit vertical put spreads and credit vertical call spreads. Until further notice, such options should be rolled over to maintain a full hedge.

 


There are four simple evergreen antidotes that all subscribers should consider.

FOUR SIMPLE EVERGREEN ANTIDOTES

These four antidotes against risk are applicable under all market conditions.

  • Diversify  between very long-term, long-term, medium-term, short-term, very short-term, and very, very short-term.

    Markets  fluctuate.  If trades in one time frame do not work out due to market conditions, trades in different time frames usually work out generating profits that more than offset losses.

  • There is an old saying, 'A rolling stone gathers no moss.'  Find a system  that has performed well in all market conditions and stick to it. 

    Too often investors miss buying on lows and selling on highs because they do not consistently follow a particular system. 

  •  Pay attention to the morning capsules.  Our models now have a streak going for over five years in calling major tops and major bottoms during some of the toughest markets. As an example, close to the February-March 2012 market peaks, the  morning capsules repeatedly stated that there was a 65% probability of a market correction. In late 2007, we positioned subscribers in inverse ETFs that go up when markets go down for about 80% of their portfolios.

  • Watch our trading patterns in the Real Time Feed.  These patterns have been consistent going back years in that we start aggressively taking profits near market tops and make very few buys during the same period, on the other hand we start initiating more new positions near the bottoms. 

Risk adjusted returns can be increased by following more sophisticated strategies than those described here.  The best way to hedge is highly specific to the details of a portfolio; no one size fits all.

To help you get a running start on such strategies, we are making the coaching seminar  HEDGE THE RISK available to subscribers at 75% discount.



SUMMARY OF INDICATORS
 IN 12 CATAGORIES
Here is the summary of the composite of each category of our indicators.  Confluence of negativity among a large number of indicators is usually positive for the markets and vise versa.  We will not bother you with details, as each category itself contains a large number of indicators. 
  • U.S. Economic Indicators: Mildly Positive

  • European Economic Indicators: Mildly Negative

  • Asian Economic Indicators: Mildly Negative

  • Fund Flows: Mildly Positive

  • Commodity Price Movements: Positive

  • Relationship Between Currencies: Positive

  • Sentiment: Positive

  • Insider Buying: Strongly Negative

  • Earnings Momentum:  Negative

  • Risk Appetite: Positive

  • Quantitative Indicators: Strongly Positive

  • Technical Indicators: Positive

                    


RISK REWARD MATRIX -- EXISTING POSITIONS / MODEL PORTFOLIO

Markets are very dynamic. Risk reward is always in a state of flux. Risk reward changes as prices change, new data becomes available, and sentiment shifts. Further, risk reward can change dramatically as macro conditions change or markets overall change. Major changes in risk reward can  happen in the blink of an eye. Even very low risk investments can result in total loss. All investors should consider diversification, investing according to their personal risk tolerance, and exercise constant vigilance using multiple  additional independent sources.

NEW RECOMMENDATIONS OR RECOMMENDATIONS NOT YET FILLED

All open recommendations and buy zones not  included in this All Around Alert are still valid.

All stop zones and target zones for positions not included in this alert remain in effect unless specified otherwise.

EXISTING POSITIONS/MODEL PORTFOLIO UPDATES
 Please see ZYX Change Method Trade Management Guidelines for explanations.

AMERIGROUP CORPORATION (AGP)

The company operates as a managed healthcare provider primarily focusing on people receiving healthcare benefits through government programs. 

Since initiating the position, we have been telling you that this company is a takeover target.  Now the company has a buyout offer from WLP at $92 a share in cash.

The buyout offer represents a 311% gain for our subscribers. 

The position is long with an average price of $22.05.  Currently, 55% of the full core position size is held.  Profits have been taken as high as $74.60. 

In addition, there are profits in the amount of $16.92 per share allocable to this position from the hedging program started on July 13, 2011 and ended per post dated December 2, 2011 on the Real Time Feed. There are also realized and unrealized profits allocable to this position from hedging program initiated on March 5, 2012.

What to do now?

Those in the stock  may continue to hold and tender the shares to WLP. 

Those not in the stock may not enter this position.  

AMERICAN INTERNATIONAL GROUP  (AIG)

Please see above.

APPLE (AAPL)

The company manufactures popular products such as Mac personal computers, iPhones, iPods, and iPads.  The company also operates services such as iTunes.

The position is long with an average price of $131.00.  Currently, 35% of the full core position size is being held.  Profits have been taken as high as $629.35. The stock has the potential to go to $1000, but risks have also dramatically increased compared to when the position was entered. 

There are realized and unrealized profits allocable to this position from hedging program initiated on March 5, 2012.

What to do now?

Those in the stock  may continue to hold and add lightly on a dip in the buy zone.

Those not in the stock may wait for a signal on the Real Time Feed or a dip in the buy zone.

Buy Zone:             $450.00 -  $582.00
Target Zone:         $750.00 - $1000.00
Stop Zone:            $326.00 -  $365.00
Potential entry points within the buy zone:  $461, $502, $526, and $582.

THE BABCOCK & WILCOCKS COMPANY (BWC)

The company provides clean energy technology and services for power generation. The company is a potential buyout target.

The position is long with an average price of $20.77.  Currently, 10% of the full core position size is being held  Profits have been taken as high as $26.80.

There are realized and unrealized profits allocable to this position from hedging program initiated on March 5, 2012.

The catalysts behind a stock move will be the increasing use of electricity, such as in electric cars, more pollution controls, and replacement of aging power plants.

What to do now?

Those in the stock  may consider adding to the position near the bottom of the buy zone.

Those not in the stock may consider initiating a small scale in within the buy zone.

Buy Zone:             $22.50 - $24.26
Target Zone:         $75.00 - $85.00
Stop Zone:            $21.43 - $21.73
Potential entry points within the buy zone:  $22.52, $23.02, $23.11, and $23.31.

BANCO SANTANDER (SAN) -- old symbol (STD)

This is the largest bank in Spain.  The bank is experiencing rapid growth outside Spain, especially in Latin America.  It is one of the cheapest banks in the world due to its holdings of Spanish sovereign debt.

The company offers an attractive dividend of  about 7.5%.

The position is long with an average price of $7.28.  Currently, 15% of the full core position size is being held.

There are realized and unrealized profits allocable to this position from hedging program initiated on March 5, 2012.

The catalysts behind a stock move will be a recognition that the probability of a sovereign default in Spain is very low.

This is a very long-term position.

What to do now?

Those in the stock and aggressive investors may continue to build a position on dips.

Those not in the stock and aggressive investors may consider initiating a small scale in within the buy zone.

Buy Zone:             $4.11 - $7.50
Target Zone:         $16.00 - $18.00
Stop Zone:            TEMPORARILY NO STOP DUE TO HIGH VOLATILITY
Potential entry points within the buy zone:  $4.11, $5.32, $5.52, and $6.11.

BANK OF AMERICA  (BAC)

Bank of America is the largest bank in the United States. 

The position is long with an average price of $7.69.   Currently, 30% of the full core position size is being held.  Profits have been taken  as high as $9.40. 

There are realized and unrealized profits allocable to this position from hedging program initiated on March 5, 2012.

The trigger for the stock appreciation will be a recognition that the probability of a doomsday in the stock is very low.

This is a very long-term position.

What to do now?

Those in the stock may continue to hold but not add unless there is a signal in the Real Time Feed.

Those not in the stock may consider initiating a small scale in within the buy zone.

Buy Zone:             $6.12 - $7.52
Target Zone:         $16.00 - $18.00
Stop Zone:            TEMPORARILY NO STOP DUE TO HIGH VOLATILITY
Potential entry points within the buy zone:  $6.12, $6.71, $7.11, and $7.52.

 

CHESAPEAKE ENERGY CORPORATION (CHK)

The company is one of the largest natural gas producers.  The company is a potential buyout target.

The position is long with an average price of $18.04.  Currently, 30% of the full core position is being held.  Profits have been taken as high as $25.00.

In addition, there are profits in the amount of $6.88 per share allocable to this position from the hedging program started on July 13, 2011 and ended per post dated December 2, 2011 on the Real Time Feed. There are also realized and unrealized profits allocable to this position from hedging program initiated on March 5, 2012.

This is a very long-term position.

What to do now?

Those in the stock  may continue to hold.

Those not in the stock may buy only on signals on the Real Time Feed.    

Buy Zone:             Due to high volatility please depend on the Real Time Feed for buy signals.
Target Zone:         $45.00 - $50.00
Stop Zone:            TEMPORARILY NO STOP DUE TO HIGH VOLATILITY


CIENA CORP (CIEN) 


CIEN is the premium optical networking company. 

The position is long with an average price of $12.28.  Currently, 10% of the full core position size is being held.  Profits have been taken as high as $17.60.

What to do now? 

Those in the stock may continue to hold.

Those not in the stock may buy on dips into the buy zone.

Buy Zone:                             $12.75 - $13.50
Target Zone:                         $19.00 - $21.00
Stop Zone:                            $12.63 -$12.73

Potential entry points within the buy zone:  $12.75 and $13.04.

CISCO (CSCO)

The company is the largest provider of networking and other communication related products.

The company also provides an attractive dividend of  about 3%.

The position is long with an average price of $16.77.  Currently, 25% of the full core position size is being held.   

In addition, there are profits in the amount of $3.58 per share allocable to this position from the hedging program started on July 13, 2011 and ended per post dated December 2, 2011 on the Real Time Feed. There are also realized and unrealized profits allocable to this position from hedging program initiated on March 5, 2012. 

What to do now?

Those in the stock  may consider adding if the stock goes lower.

Those not in the stock may consider scaling in within the buy zone.

Buy Zone:                             $16.32 - $17.57
Target Zone:                         $34.00 - $38.00
Stop Zone:                            $12.00 - $13.73

Potential entry points within the buy zone:  $16.32, $16.52, $17.04, and $17.57.

 

EL PASO (EP) AND KINDER MORGAN (KMI)

El Paso stock was held from an average price of $17.50.  The company was acquired by Kinder Morgan (KMI) in May 2012.  We recommended that subscribers tender their shares.  Subscribers had several options to receive cash and Kinder Morgan securities.  In the transaction, subscribers received about $29.60 worth of cash and Kinder Morgan securities.    It appears that most of our subscribers decided to receive the most amount of stock.  Therefore we will continue to follow KMI.  Basis calculation for new stock is somewhat complex because of the issue of warrants and different options.  At this point the working assumption is that KMI position is long from about $0.97 after adjusting for the cash and a warrant. 

The company also provides an attractive dividend of about 3.9%.

What to do now?

Those in the stock may continue to hold. 

Those not in the stock may buy on dips into the buy zone. 

Buy Zone:                             $29.31 - $33.13
Target Zone:                         $38.00 - $40.00
Stop Zone:                            $18.00 - $19.73

Potential entry points within the buy zone:  $29.31, $30.60, $32.53, and $33.13.


EMPIRE DISTRICT ELECTRIC (EDE)

The company is a utility operating in Missouri, Kansas, Oklahoma, and Arkansas. The company is a potential buyout target.

The company also provides an attractive dividend of about 4.7%.

The position is long with an average price of $18.70.  Currently, 25% of the full core position size is being held. 

There are realized and unrealized profits allocable to this position from the hedging program initiated on March 5, 2012. 

What to do now?

Those in the stock  may  continue to hold and add on dips in the buy zone.

Those not in the stock may initiate a position on dips in the buy zone.

Buy Zone:                             $17.50 - $20.06
Target Zone:                         $24.00 - $26.00
Stop Zone:                            $14.11 - $15.73

Potential entry points within the buy zone:  $17.51, $18.70, $19.26, and $19.66.



ENERGY TRANSFER PARTNERS (ETP)

The company is in the business of natural gas midstream, transportation and storage. 

The company provides an attractive dividend yield of about 8.20%  

The position is long with an average price of $42.04.  Currently, 80% of the full core position size is being held. 

What to do now?

Those in the stock  may  continue to hold.

Those not in the stock may scale in within the buy zone.

Buy Zone:                  $39.26 - $43.60
Target Zone:              $54.00 - $55.00
Stop Zone:                 $33.26 - $33.73

Potential entry points within the buy zone:  $39.60, $41.71, $42.02, and $42.44


HALLIBURTON (HAL)


The company is one of the largest oil and natural gas service provider.   

The position is long with an average price of $27.90.  Currently, 35% of the full core position size is being held.   Profits have been taken as high as $35.40.

This is a high beta stock.  In other words it can move much more than the market.  

What to do now?

Those in the stock  may continue to hold.

Those not in the stock may initiate a position on dips in the buy zone.

Buy Zone:             $20.00 - $29.00
Target Zone:         $60.00 - $80.00
Stop Zone:           TEMPORARILY NO STOP DUE TO HIGH VOLATILITY
Potential entry points within the buy zone:  $24.32, $25.42, $26.26,  and $27.11



HERCULES OFFSHORE (HERO)

The company is a provider of shallow water drilling and marine services to the oil and natural gas explorations and production industries. The company is a potential buyout target.

The position is long with an average price of $2.55.  Currently, 50% of the full core position size is being held.  Profits have been taken as high as $6.00. 

In addition, there are profits in the amount of $1.19 per share allocable to this position from the hedging program started on July 13, 2011 and ended per post dated December 2, 2011 on the Real Time Feed. There are also realized and unrealized profits allocable to this position from the hedging program initiated on March 5, 2012.

What to do now?

Those in the stock  may continue to hold.

Those not in the stock may depend on the Real Time Feed for buy signals.

Buy Zone:                             Due to high volatility please depend on the Real Time Feed for buy signals.
Target Zone:                         $8.00 - $10.00
Stop Zone:                            TEMPORARILY NO STOP DUE TO HIGH VOLATILITY

 

HORNBECK OFFSHORE SERVICES (HOS)

The company is an operator of off shore supply vessels in support of oil and gas exploration and production industries. The company is a potential buyout target.

The position is long with an average price of $13.00.  Currently, 30% of the full core position size is being held.  Profits have been taken as high as $42.50. 

In addition, there are profits in the amount of $6.44 per share allocable to this position from the hedging program started on July 13, 2011 and ended per post dated December 2, 2011 on the Real Time Feed. There are also realized and unrealized profits allocable to this position from hedging program initiated on March 5, 2012. 

What to do now?

Those in the stock  may may continue to hold.

Those not in the stock may depend on the Real Time Feed for signals due to the high volatility.

Buy Zone:                             Due to high volatility please depend on the Real Time Feed for buy signals.
Target Zone:                         $47.00 - $52.00
Stop Zone:                            TEMPORARILY NO STOP DUE TO HIGH VOLATILITY

INFORMATICA CORPORATION (INFA)

The company provides tools for integration analysis and management of big data on a world wide basis. The company is in one of the four areas in information technology where a revolution is taking place. 

This company is a prime buyout candidate.  This stock is very volatile and can experience wide swings, this is the reason for a wide buy zone.

The position is long with an average price of $27.76.  Currently, 40% of the full core position size is being held. 

What to do now?

Those in the stock  may  continue to hold but not add without a signal on the Real Time Feed.

Those not in the stock may slowly scale in a position in the buy zone.

Aggressive investors may start a scale in near the high end but conservative investors may wait for a dip near the low end.

Buy Zone:          $20.00 - $28.00
Target Zone:      $41.00 - $44.00 IF THERE IS NO BUYOUT; $55.00 - $60.00 IS POSSIBLE IN A BUYOUT
Stop Zone:         TEMPORARILY SUSPENDED DUE TO HIGH VOLATILITY

Potential entry points within the buy zone:  $20.76, $23.11, $24.62, and $27.30

INTEL (INTC)

The company is the largest manufacturer of microprocessors. 

The company also provides an attractive dividend of about 4%.

The position is long with an average price of $21.78.  Currently, 5% of the full core position size is being held.   Profits have been taken as high as $27.23. 

There are realized and unrealized profits allocable to this position from hedging program initiated on March 5, 2012. 

What to do now?

Those in the stock may consider to hold.

Those not in the stock may wait for a signal in the Real Time Feed.

Buy Zone:                             TEMPORARILY SUSPENDED
Target Zone:                         $28.00 - $30.00
Stop Zone:                            $21.43 - $21.78

iSHARES MSCI GERMANY (EWG)

This ETF represents stocks in Germany.  These stocks are unduly depressed due to the European financial crisis.

 This ETF also provides an attractive dividend of about 2.58%. 

The position is long with an average price of $17.91.  Currently, 5% of the full core position size is being held. 

There are realized and unrealized profits allocable to this position from hedging program initiated on March 5, 2012. 

 This is a very long-term position.

What to do now?

Those in the stock and aggressive investors may continue to build a position on bad headlines.

Those not in the stock may scale in a position in the buy zone.

Buy Zone:                              $12.46 - $20.43
Target Zone:                          $25.00 - $27.00
Stop Zone:                             TEMPORARILY NONE

iSHARES MSCI ITALY (EWI)

This ETF represents stocks in Italy.  These stocks are unduly depressed due to the European financial crisis.

This ETF also provides an attractive dividend of about 3.46%.  

The position is long with an average price of $13.85.  Currently, 5% of the full core position size is being held. 

 There are realized and unrealized profits allocable to this position from the hedging program initiated on March 5, 2012.

 This is a very long-term position.

What to do now?

Those in the stock and aggressive investors may continue to build a position on bad headlines.

Those not in the stock may scale in a position in the buy zone.

Buy Zone:                             $7.00 - $11.50
Target Zone:                         $28.00 - $34.00
Stop Zone:                            TEMPORARILY NONE


iSHARES MSCI UNITED KINGDOM INDEX ETF (EWU)

The ETF seeks to replicate MSCI United Kingdom Index.

This ETF also provides an attractive dividend of about 3.58%.  

The position is long with an average price of $14.62.  Currently, 65% of the full core position size is being held.  Profits have been taken as high as $17.33.

In addition, there are profits in the amount of $4.04 per share allocable to this position from the hedging program started on July 13, 2011 and ended per post dated December 2, 2011 on the Real Time Feed. There are also realized and unrealized profits allocable to this position from hedging program initiated on March 5, 2012.

This is a very long-term position.

What to do now?

Those in the stock may hold on for the target to be achieved.  This is a very long-term position.

Those not in the stock may consider scaling in the buy zone.

Buy Zone:            $14.00 - $15.50
Target Zone:        $28.00 - $30.00
Stop Zone:           $11.00 - $12.43

 

JP MORGAN (JPM)

JPM is the premier bank in the world.  

The company also provides an attractive dividend of about 4.33%.

The position is long with an average price of $34.14.  Currently, 10% of the full core position size is being held.  Profits have been taken as high as $38.67.

What to do now?

Those in the stock may continue to hold and add in the buy zone.

Those not in the stock may consider initiating a position by scaling into the buy zone.

Buy Zone:            $35.00 - $38.58
Target Zone:        $65.00 - $70.00
Stop Zone:          $26.00 -  $27.43   
Potential entry points within the buy zone:  $35.11, $36.32, $37.51, and $38.48.

MONSTER WORLDWIDE (MWW)

The company is the operator of the largest on-line employment service in the U.S.  The company is a potential buyout target.

The company is trying to sell itself.  If no buyout offer materializes, the stock can fall to $3 to $4 range. From a long-term perspective such a fall  will be a buying opportunity. 

The position is long with an average price of $9.93.  Currently, 65% of the full core position size is being held. 

In addition, there are profits in the amount of $3.12 per share allocable to this position from the hedging program started on July 13, 2011 and ended per post dated December 2, 2011 on the Real Time Feed. There are also realized and unrealized profits allocable to this position from the hedging program initiated on March 5, 2012.

What to do now?

Those in the stock and are aggressive investors may continue to hold. 

Those in the stock and are conservative investors may trim the position. 

Those not in the stock and are aggressive investors may scale in a position in the buy zone

Those not in the stock and are conservative investors may not enter at this point.

Buy Zone:                             $5.00 - $7.52
Target Zone:                         $14.00 - $18.00
Stop Zone:                            TEMPORARILY NONE

 


PROSHARES SHORT 20+ YEAR TREASURY (TBF)

This position profits from abatement of crisis in Europe, higher risk appetite in the world, economic growth in the U.S., higher interest rates in the U.S., and higher inflation in the U.S.

This position will be extremely profitable when the bond bubble bursts.


The position is long with an average price of $37.33.  Currently, 70% of the full core position size is being held.  Profits have been taken on a specific tranche at $35.73. 

In addition, there are profits in the amount of $12.48 per share allocable to this position from the hedging program started on July 13, 2011 and ended per post dated December 2, 2011 on the Real Time Feed. There are also realized and unrealized profits allocable to this position from the hedging program initiated on March 5, 2012.

This is a very long-term position.

What to do now? 

Those in the stock may add on big dips. 

Those not in the stock may initiate a small scale in the buy zone. 

Buy Zone:                          $25.26 - $29.63
Target Zone:                      $62.00 - $68.00  

Stop Zone:                        TEMPORARILY NONE

Potential entry points within the buy zone:  $25.52, $26.06, $27.17, and $28.23.

PROSHARES ULTRA SHORT EURO (EUO)

This is an inverse ETF that goes up when the Euro goes down against the dollar.

This position is being held for hedging purposes. 

The hedge is long with an average price of $17.11. Profits have been taken on the hedge as high as $22.25.  Now only 15% of the original hedge is being held. 

What to do now?

Those in the hedge may continue to hold and may wait for signals on the Real Time Feed.

Those not in the hedge may not initiate a hedge here.


RED HAT (RHT)

This company is one of the low risk ways to participate in the massive Information Technology  migration to the cloud.   The company is a potential buyout target.

The position is  long with an average price of $43.14.  Currently, 10% of the full core position size is being held.  Profits have been taken as high as $61.10.

In addition, there are profits in the amount of $13.16 per share allocable to this position from the hedging program started on July 13, 2011 and ended per post dated December 2, 2011 on the Real Time Feed. There are also realized and unrealized profits allocable to this position from hedging program initiated on March 5, 2012. 

This is a very long-term position.

What to do now?

Those in the stock may continue to hold and add on a dip into the buy zone.

Those not in the stock may wait for a signal on the Real Time Feed or a dip in the buy zone.

Buy Zone:             $37.00 - $44.50
Target Zone:         $80.00 - $100.00
Stop Zone:            $24.43 - $27.83
Potential entry points within the buy zone:  $40.56, $41.31, $42.21, and 
$43.35.

 

SCANA CORP (SCG) 

SCANA is an electric utility that operates in South Carolina. The company is a potential buyout target. 

The company also provides an attractive dividend of about 4%.

This position is long from a price of $35.50.  Currently 90% of the full core position size is being held. Profits have been taken as high as $48.55

What to do now?

Those in the stock may continue to hold but not add without a signal from the Real Time Feed.

Those not in the stock may consider scaling in a position in the buy zone.

Buy Zone:                          $38.00 - $41.20
Target Zone:                      $57.00 - $62.00
Stop Zone:                         $27.00 - $29.43

SILICON IMAGE, INC. (SIMG)

Silicon Image is a semiconductor company providing wireless and wired connectivity solutions for high-definition content.   The company is a potential buyout target.

This position is long from a price of $2.55.  Currently 50% of the full core position size is being held.  Profits have been taken as high as $8.30. 

In addition, there are profits in the amount of $1.48 per share allocable to this position from the hedging program started on July 13, 2011 and ended per post dated December 2, 2011 on the Real Time Feed. There are also realized and unrealized profits allocable to this position from hedging program initiated on March 5, 2012.

What to do now?

Those in the stock may continue to hold.

Those not in the stock should not consider this stock at this juncture.

Buy Zone:                          TEMPORARILY SUSPENDED
Target Zone:                      $8.00 - $10.00
Stop Zone:                         TEMPORARILY SUSPENDED

SPDR STOXX EUROPE 50 (FEU)

This ETF represents the 50 largest corporations in Europe.

This ETF also provides an attractive dividend of about 4.01%.

The position is long with an average price of $30.76.  Currently, 15% of the full core position size is being held. 

There are realized and unrealized profits allocable to this position from hedging program initiated on March 5, 2012. 

This is a very long-term position.

What to do now?

Those in the stock may continue to hold and add according to signals in the Real Time Feed.

Those not in the stock may scale in a position only when there is a signal in the Real Time Feed.

Buy Zone:        $24.00 - $31.26
Target Zone:    $46.00 - $50.00
Stop Zone:       $17.43 - $17.73

 Suggested points are $26.42, $29.32, $30.53, and $31.02.


TENET HEALTHCARE CORPORATION (THC)

The company is a large hospital chain.  

The position is long with an average price of $5.10.  Currently, 70% of the full core position size is being held.  Profits have been taken as high as $6.49.

What to do now?

Those in the stock  may  continue to hold..

Those not in the stock may wait for a signal on the Real Time Feed.

Buy Zone:                             TEMPORARILY SUSPENDED
Target Zone:                         $9.00 - $11.00
Stop Zone:                            TEMPORARILY SUSPENDED DUE TO HIGH VOLATILITY

TALBOTS (TLB)

The company is primarily a retailer of women's apparel, accessories, jewelry, and gift items in the U.S.

The position is long with an average price of $1.79.  Currently, 15% of the full core position size is being held.

The company has received a buyout offer for $2.75 cash. 

There are realized and unrealized profits allocable to this position from hedging program initiated on March 5, 2012. 

What to do now?

Those in the stock should have tendered their shares and received cash.  It appears that some subscribers have not tendered their shares.  There is no merit in not tendering the shares.

Those not in the stock may not enter this position. 

 

THE ST. JOE COMPANY (JOE)

The company is a real estate development company that owns 577,000 acres of land primarily in northwest Florida as well as 405,000 acres on the coast of the Gulf of Mexico.

The position is long with an average price of $18.00.  Currently, 80% of the full core position size is being held.  Profits have been taken as high as $23.16.

In addition, there are profits in the amount of $4.33 per share allocable to this position from the hedging program started on July 13, 2011 and ended per post dated December 2, 2011 on the Real Time Feed. There are also realized and unrealized profits allocable to this position from hedging program initiated on March 5, 2012.

This stock is prone to bad headlines.  Most bad headlines are likely to be buying opportunities.

This is a very long-term position.

What to do now? 

Those in the stock  may hold on to the present position and add on dips on any bad headlines.

Those not in the stock may consider scaling in the buy zone.

Buy Zone:           $14.50 - $18.06
Target Zone:       $34.00 - $38.00
Stop Zone:          TEMPORARILY NONE

Potential entry points within the buy zone:  $14.62, $16.02, $16.67, and $17.13



WALGREEN CO. (WAG)

The company is a large drug store chain.  

The company also provides an attractive dividend of about 3%.

The position is long with an average price of $29.60.  Currently, 10% of the full core position size is being held.  Profits have been taken as high as $35.92.

What to do now?

Those in the stock  may  continue to hold and add only on signals in the Real Time Feed.

Those not in the stock may initiate a very small position on dips in the buy zone.

Buy Zone:                             $33.00 - $34.50
Target Zone:                         $44.00 - $46.00
Stop Zone:                            $26.50 - $27.68

Potential entry points within the buy zone:  $33.11, $33.31, $33.62, and $34.32

 

WAL-MART (WMT)

Wal-Mart is the largest retailer in the world.     

The position is long with an average price of $58.88.  Currently, 10% of the full core position size is being held. Profits have been taken as high as $62.10.

The stock recently hit a 12 year high in the middle of the market correction.  The reason the stock is doing well is because the company is competing better with dollar stores.

What to do now?

Those in the stock may continue to to hold and add only on signals from in the Real Time Feed.

Those not in the stock may enter only on signals from the Real Time Feed.

Buy Zone:             $57.00 - $61.62
Target Zone:         $85.00 - $88.00
Stop Zone:            $55.00. - $56.43.

YAHOO (YHOO)

Yahoo is a premier internet portal that has fallen on hard times.  The company's Asian assets are doing great and the value of Asian assets may be unlocked.   

The position is long with an average price of $14.87.  Currently, 10% of the full core position size is being held.   

What to do now?

Those in the stock may continue to hold and add on dips in the buy zone.

Those not in the stock may initiate a scale in within the buy zone.

Buy Zone:              $12.00 - $15.02
Target Zone:          $21.00 - $22.00
Stop Zone:              $9.73  -   $10.68
Potential entry points within the buy zone:  $12.52, $13.21, $14.55, and $14.87.

 

All Around Alerts track only long-term and very long-term positions that are suitable as core portfolio holdings.  A good way to increase returns is to surround a portfolio built around the positions in the All Around Alert  with very very short-term, very short-term, short-term, and medium-term positions as
 well as speculative positions that are not included in All Around Alerts but are available on the
 Real Time Feed.

Please pay special attention to position sizes, and follow
 ZYX Change Method Trade Management Guidelines.

New subscribers:
Please see  Getting a Running Start to
get the maximum value from the All Around Alerts.
 
Please make adjustments, as you see fit to suit your risk tolerance, your experience, and market conditions. You  must make your own judgments with the help of your own  personal advisor independent of the content herein. The content herein may not be suitable for your purposes and your situation. Nigam Arora or The Arora Report,  Ltd, its directors, its officers,  its employees, and its affiliates  are not your advisors.

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