Saturday, May 26, 2007

Money Flow Review: Stocks on the Radar

* Stock Looking Sharper? - Sharper Image (SHRP) has been quite a disappointment as an investment, as it's trading around $11/share, down from $38 in 2004. It's an interesting short-squeeze candidate, however, as Friday's Wall St. Journal reports a mammoth short position in SHRP: equivalent to 37 days worth of average trading volume. The last two trading days this week saw sharp gains in Sharper Image on much above average money flow.

* Taking Profits From the Oil Patch? - In the current environment, which stocks should be doing better than the oil refiners? Valero (VLO) is up from about $58 to $74 since the late February/early March weakness. Money flow for VLO, however, has been outright negative--dollars have been flowing out of the stock--for each of the past six trading sessions and 13 of the last 20. Large traders/investors taking profits into recent strength?

* Soft Flows at MSFT - Microsoft is another stock showing net dollar outflows of late. We've had negative money flow readings seven of the past eight trading sessions, as price has stalled in the 30s.

* NTRI Gets Expansive - NutriSystem (NTRI), featured here recently as another short-squeeze candidate, hit its highest price since January on Friday.

* Power Behind the Stock - Toshiba was another stock I featured last month; it trades on NASDAQ as TOSBF. After hitting a bull market high on 5/8, it has settled back but remains in a firm uptrend. This is an interesting play on nuclear power as an oil alternative.

* Honda Ready to Zoom Ahead? - I just purchased a Honda Fit and have to say the company got it right, with a bit of performance (for a subcompact), good gas mileage, low emissions, and a surprisingly roomy interior for the small footprint. Honda stock (HMC) is down for 2007 and has gone nowhere over the past year. Money flows have been doggedly positive, however, and the stock remains in a long-term uptrend.

* Chips Are Down for INTC? I noted a surge in Intel (INTC) money flows last month, and the stock closed at its highest price of 2007 this past Tuesday. But now money flows have been outright negative--dollars exiting the stock--for seven of the past ten trading sessions.

* Wal-Mart is Being Discounted - The stock (WMT) closed at its lowest levels since March this past week and money flows have been outright negative for 8 of the past 10 trading sessions.

* Gains Still Flowing in TTEK - I featured this stock earlier this month as a worthy play on the water-as-resource theme. The stock made a new high on Tuesday and continues to enjoy net dollar inflows. Tuesday's gain met with stiff selling and net money outflows on Wednesday, which may herald some consolidation.

3 comments:

g0thm0g said...

Hey Brett, I too noticed the INTC and MSFT money flow - my week-on-week estimate is more than 3 million out for INTC. I also see a good deal of money coming out of SUNW, CSCO, and AMD in techs, as well as F, FRX, and QCOM.

I am looking at a small position in the $25 puts on XLK for next week (those stocks comprise more than 25% of XLK). The last hour on the Q's was negative with volume Friday, so unless we see discount-hunters Tuesday, I think we might see continued weakness.

-Michael J Bommarito II

Bill said...

Brett,

I wanted to thank you. I've been following money flows in several of my better known stocks and it's been a nice compliment to my other tools.

I'm wondering which industry groups you feel it's worthwhile to monitor and which specific flavor you use (DJ, IBD, etc..).
Trying to find the right balance between tunnel vision and information overload is proving to be a challenge as I try to broaden the lessons learned trading the indexes and a few near and dear tech stocks.

Thanks again for the quality and sincerity of the help. Karma is a boomerang =)

Brett Steenbarger, Ph.D. said...

Hi Bill,

At this juncture, I monitor eight S&P 500 sectors and the Dow 30 for money flows. This helps me see how institutional favorites are performing. Readers can see the sectors in my previous dollar volume flow posts and my Weblog.

Brett