Tuesday, May 26, 2009
In 2002 - 2003, this indicator give the buy signal on october 2002, 6 months before than the buy signal in the DOW JONES. Then, we could expect the same now, although the markets never behave the same way.
Monday, May 25, 2009
We will compare the 2003 bottom, with the 2009 lows (we do not know if we have a bottom yet). For the comparison, we can use the MACD combined with the Positive Volume Index (PVI, with the 200 SMA in red), and the 200 SMA in the Dow Jones (in yellow). For those who are not familiar with the Positive Volume Index:
1) If today's Volume > yesterday's volume then:
PVI = yesterday's PVI + (today's close - yesterday's close)/[yesterday's close × yesterday's PVI]
2) If today's volume < yesterday's volume then: PVI = yesterday's PVI Interpretation:
This indicator links the behavior of volume and price.
It can identify a rise in volumes synchronized with a rise in prices. The PVI or Positive Volume Index, detects only the rising signals contrary to the Negative Volume Indicator.
Less informed investors follow the rise in volumes and are in the market.
On the contrary when volume decrease the more informed investors are in the market.
The market is bullish when the two indicators rise above their moving averages.
Now, let´s see how this indicator worked out in 2003:
DOW JONES 2003 bottom:
DOW JONES 2009 lows:
Could it work in the 2009 lows?
Sunday, May 17, 2009
Monday, May 11, 2009
Q3 2008 15,530 / Q4 2008 9,754 / Q1 2009 (9,313) / Q2 2009 (14,750)
Sunday, May 10, 2009
LAST UPDATE: MAY 20
NRG is moving within a channel. Now that It has made a multiple bottom and recently broke the dynamical resistance on May 8, it is struggling with the (100) Exponential Moving average. Especially, look at the positive divergence on the Money Flow indicator and the ROC, rate of change (green line). We could expect a pullback to the support at 19.5. We could wait for the bottom on the 19.5 level to buy with stop loss at 19.
Supports and resistances on the chart:
NRG Energy, Inc., together with its subsidiaries, operates as a wholesale power generation company. The company engages in the ownership, development, construction, and operation of power generation facilities. It also engages in transacting in and trade of fuel and transportation services, as well as trade of energy, capacity, and related products. As of December 31, 2008, the company’s power generation assets consisted of approximately 10,495 megawatt (MW) of gas-fired; 7,540 MW of coal-fired; 3,715 MW of oil-fired; 1,175 MW of nuclear; and 195 MW of wind generating capacity in the United States. In addition, NRG Energy also owns approximately 115 MW of thermal capacity domestically, as well as 1,080 MW of power generation capacity overseas in Australia and Germany. The company was founded in 1989 and is headquartered in Princeton, New Jersey
Market Price: 21.19
Book value: 26.5
Trailing P/E: 4.47
Average volume: 3.3M.
Total Debt/Total Capital: 60%. Industry: 56%
NRG has a debt to total capital ratio of 60% which is in-line with the Electric Utilities industry's norm. With an Interest Coverage ratio of 5.3 and a Quick ratio of 1.29 the company should be able to comfortably repay its debt.
Operating Profit Margin: 36%. Industry: 11%.
Based on its gross margin, operating margin, and net margin, NRG converts a larger percentage of its revenues to profits than most other companies in the Electric Utilities industry. Furthermore, the company is profitable with an operating margin of 36.43%.
Net profit margin: 16.1 %. Industry: 2.76%.
In 2009, insiders were aggressively buying NRG.
Most recent news and articles:
Berkshire-Hathaway's Warren Buffett portfolio update Q4 2008
NRG starts Texas Cedar Bayou 1 natgas unit.
- Always wait for the setup. Know when to sell before you buy. Set up exit strategies. Cut your losses, let your profits run.
- Develop your investment philosophy.
- DISCIPLINE is the key to successful investing.
- Big profits do not involve big risks. It is not risky to buy securities for a fraction that they are worth.
- Define your circle of competence.
- When there is nothing to do, do nothing.
- Admit and learn from your mistakes.
- Survive first, and make money afterward. Invest first, investigate later (listen to the market).
- Diversification is a protection against ignorance.
- If you do not understand it, do not do it.
- Follow your own system religiously.
- Invest for stimulation and sell-fulfillment, not only for money.
- Enjoy the process of investing.
- Lives and breathes investing 24 hours a day.