Moo Trades of the Week

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16Jul

Welcome to Moo Trades. We’re here to provide bullish insight to investors about stocks and options through technical analysis, trading strategies and informative opinions.

Moo Trades aims to provide weekly coverage of the markets. This week’s Moo Trades are chosen for the anticipated Q3 2007 tech rally. We know we could mention Apple (AAPL) or Google (GOOG), or some of the other popular names. That’s not our aim, though. We believe investors are saturated with the most well known names constantly and need a breath of fresh air.

We’re currently watching Seagate (STX) and Corning (GLW). We believe the market is positioned to trend higher based on good earnings, solid economic outlook and moderating treasury bond yields. The price of fuel has not yet had a tremendous impact on profits.

Seagate (STX) is the global leader in storage, providing the best quality hard drives to the greatest number of customers. They are currently positioned to grow their storage revenues from increasing demand driven by Microsoft Windows Vista and increased data storage demand for videos, music, photography, etc.

Referencing the chart below, we believe the target buy-in price for Seagate is $22.50. Seagate is strongly above its 50 day moving average (in black), the RSI (chart bottom) indicates it is not overbought and the stock between the Bollinger bands (in gray). We feel this means the stock is in a good position to be acquired.

Corning (GLW) is lighting the way for the US fiber infrastructure build-out that companies like Verizon, Comcast and ATT are participating in to bring their broadband networks in to the 21st century. Corning’s fiber is also being used in Verizon’s FiOS Fiber-to-the-Home offering, which is growing rapidly. We believe Corning is poised to continue its upward trend given the high demand for its products.

Referencing the chart below, we believe Corning’s stock may be overbought (see high RSI) at this time. There is increased inherent risk given the stock gravitating towards the top Bollinger bands. Conversely, we feel the stock may continue to ascend in price from aggressive purchasing. We at Moo Trades encourage caution when purchasing these type of growth stocks unless you are a savvy investor.