August 4th, 2009

Bull Recovery – Part II

As promised yesterday, I’ve prepared a list of stocks that have not yet surpassed their Election Day price (click here for list). One of the principal reason these stocks have lagged the rest of the market is that they are industries that have not been in favor primarily because of the perceived and actual impact of the financial crises and recession on their valuations.

The criteria to be on the list were:

  • In the following Sectors:Banking, Real Estate, Transportation, Energy, Chemicals and Consumer Durables
  • The stocks will either be under (or not significantly above) their price on 11/4/08
  • Their price action appears to be close to completing or have clearly formed a bottom reversal
  • The entered their bottom patterns after a rapid and significant decline from a pre-crash high making a breakout into a price vacuum leading to significant recovery appreciation.

Interestingly, only two of the 160 stocks in the list are also in the IBD 100 leading one to suspect that

  1. this list is flawed,
  2. IBD focuses on stocks that already have generated momentum while this list is comprised of future momentum stocks or
  3. a rising tide (a bull market) lifts all boats and there are enough boats around (about 70% of all stocks) to populate many lists without the risk of overlapping.

In any event, this should be only one of your starting out points. Do your own analysis and note that the dividend yield information may be based on non-current payment information. Good luck, happy hunting.

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