Sep 15 2009

Investing In Green & Eco-Friendly Stocks

The socially conscious investor will find a wide range of Eco-friendly stocks and mutual funds to choose from, both small and large. Due to the influence of world-wide concern over global pollution and carbon dioxide, the investor will find many large corporations are snapping up green companies to add to their list of products.

A recent acquisition by Royal Philips Electronics (headquartered in the Netherlands) of Color Kinetics, trading on the NASDAQ as CLRK is a great example. Color Kinetics was a ten-year-old company that produced environmentally friendly lighting through its enhancement of the LED (light-emitting-diode) technology to create a new type of illumination.

Color Kinetics utilized digitalized technology to create a new source of controllable illumination. The merger between the giant Philips and Color Kinetics will enhance its Philips Lighting Solutions market in the LED technology. Color Kinetic has existing installations world wide and a huge customer list, with relationships in China and the UK. Philips, in turn will, provide its 60-country-presence to the Eco-friendly technology of Color Kinetics. Investors should not rule large conglomerates in their search for Eco-friendly stock.

Small Cap Companies:

For investors that enjoy investing directly in small cap companies there are numerous opportunities for investors in AMEX. These stocks are very reasonable in price and may provide future gains as going green becomes an integral part of business and not just a slogan. I have watched some Eco-friendly companies grow over the past several years and the following is a highlight of some interesting stocks.

Environmental Power Corp. trades under the ticker EPG on the AMEX exchange. This stock currently sells in the $5 range. The company and its subsidiaries engage in the ownership, development and operation of renewable energy facilities in the United States. EPG owns 83 leasehold of land. It has plants that utilize animal and food industry waste to produce bio-mass and other forms of alternative fuel that utilize their renewable energy biogas. A good reason to give this company a good look is that it filed a notice with the SEC that it has a firm commitment from an underwriter to make and offering of over four million shares of his stock. If the offering goes forward the company could realize a gain in the price as well as an infusion of over 22 million dollars.

There is another stock that has great promise in the fuel cell area. This area has room to grow. I particularly like Fuel Cell Energy. It trades under the stock ticker FCEL. The company has a market cap of approximately 650 million. The company is in the development, manufacturing and sale of fuel cells power plants for use in electrical power plants. Its pipeline products are geared for use in health care facilities, hotels, hospitals, universities, governmental offices and water treatment centers. The company is located in Connecticut with office in Korea, Japan, Canada and Europe. This $9 stock has no where to go but up in the long term. Another reason to think twice about this company is the major holders of stock in the company. Wells Fargo Bank, Barclays, Deutsche Bank and other prominent funds are invested in FCEL.

A stock that is a good value, but lacks appreciation is Calgon Carbon Corp. in Pennsylvania. The company trades under the ticker CCC. The company is in the business of providing means to clean the air and water.

The company has been around for a good period of time and it appears that 2007 may be its year to take a solid place in Eco-friendly stocks. It currently sells in the $13 range and deserves a good review.

There are numerous ways to get into the green, Eco-friendly stocks. There are mutual funds and indexes available. In addition there are segments in wind, health foods and solar energy that have opportunities for investment.

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Sep 15 2009

Investing In Utilities

There was a time in our recent history that investing in utility stocks was like opening up a pass book savings account. Today, the investor needs to be more cognizant of the companies compliance with various regulations and their current stance on applying new and efficient technology. The increase in demand and a need for power plants and distribution has placed a burden on the utilities sector.

Some utility companies employ a combination of energy producing resources. Some rely on coal, hydro electrical plants and the occasional nuclear plant. Many rely on their natural gas reserves and electricity contracts with their producers to provide power to their customers. In effect the utility is a reseller of power sources.

Investing in Public Utility Companies:

Some good work horse utility companies are on the stock market. In seeking out the security of a public utility stock you may be interested in dividends. For some investors the utility is a relatively secure method of investing for the long term and part of a retirement plan.

One example of a good utility stock is American Electric Power Company. It trades on the NYSE under the stock ticker AEP. This is a public utility holding company that transmits, generates and distributes power to a variety of utility companies. Some of these utility companies are cooperatives, municipal power companies and smaller utility companies.

AEG is a 17.7 billion dollar market cap company. It has been a consistent performer for over 30 years and its major institutional investors read like a who’s who on Wall Street. It is better than 93 percent of all stocks listed on the S& P 500. The stock is a consistent performer and sells in the range of $40 to $51 for the last year. In November, 2006 the price was in the high $30 range, but has moved to the $40 ranges in recent months. It consistently issues a small dividend. It currently sells for $44.48 a share and should rise to its first target of $49 with ease.

There are other holding companies that may be of interest to the investor with a desire to invest in utilities. Duke Power that trades under the stock ticker DUK is a multi billion dollar company. Another l00 year old company is Constellation Energy Group in Baltimore, Maryland. The significant aspect of investing in power companies is whether the company is in compliance with various regulations pertaining to clean air and water. The cost to update facilities is costly. Most of the major players in power have already commenced updating their facilities.

Investing in Diversified Utility Companies:

There are some very good diversified utility companies that are consistent performers. Wisconsin Power & Electric trades on the NYSE as WEP. This company is a consistent performer and recently provide a large credit to its customers. It has a 5.9 billion market capitalization. The company is owned by some of the biggest funds in the country. It sells for $44 and has a mean target of $50.

Two other good good diversified utility companies are Integrys Energy Group stock ticker TEG and Alliant Energy that trades under the ticker LNT. There is a price difference in the companies, but both utilities are multi-billion dollar companies. Both have a blue ribbon groups of institutional investors.

All of the utility companies listed require some analysis to determine if the company fits your investment portfolio. The utility sector has some pressure due to world wide considerations and the demand of end users. The key is if the company is poised for future growth by enhancing its infrastructure and distribution methods.

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Sep 12 2009

Market Cycle

There are four major market cycles. Knowing these major market cycles is important for you and your trading system. Each market cycle requires a different approach from your trading system. Adapting to market cycles can improve your bottom line.Understand the forex market. Learn to read the forex charts. Try Netpicks forex signal free for two weeks.

The four major market cycles are: 1) Trending, 2) Consolidating, 3) Breaking out of a consolidation and 4) Corrective. Let’s discuss these market cycles now.

Trending is when the market starts to move consistently in one direction either up or down. An uptrend means each higher high is higher than the previous high and each lower low is also higher from the previous low. Similarly for the down trend!

On a chart, a Consolidation market will look like a sideways horizontal line. Consolidating is when the market is struck between two horizontal support and resistance levels.

Breaking out of a Consolidation is when there is a sharp increase or decrease in the price after the market has been consolidation for at least 20 bars.

Corrective is a short sharp reverse in prices during a longer market trend. In addition to these four market cycles, many traders also use Elliott Wave Theory to determine waves which are also an indication of market cycles.

However, using Elliott Waves is somewhat advanced for most traders. There are five Elliott waves and each one has its own relevance in determining the trading strategy. You need to have a thorough understanding and ability to correctly determine which wave the market is in at that point.

Incorrectly identifying the market with either the four market cycles or by using the Elliot Waves can be a costly mistake. For example suppose the market is only in consolidation and you incorrectly determine that the market has entered a trend.

Your best plan of action should be constant observation. You might enter a trend trade and get immediately stopped out. Market experience is the best teacher and only overtime you will be able to correctly figure out the market cycle.

Right side of the chart is always an unknown quantity for the trader until it reveals itself. Hindsight is always perfect but trying to predict the markets can be an elusive and impossible endeavor.

Just as there are four seasons in a year, the markets have four cycles. So in addition to having a trading system, you need to learn what the different market cycles are. That means you should develop the skill of correctly identifying the different market cycles at the right time.

Effectively identifying the market cycles is a skill that all successful traders have mastered. You need to learn how to adopt your approach to those cycles to remain profitable. For example in a choppy, sideways bracketed market, you need to adopt your system and rules so that you do not get whip sawed and stopped out a lot.

Sep 12 2009

Investing Vs Trading

Many people confuse trading with investing. What’s the difference? In reality, these two terms are very far apart. The main difference between them is the time period of holding the assets. An investor is not concerned with short-term fluctuations in the asset’s price, and is generally more oriented toward long-term appreciation in the value of his holdings. In making an investing decision, an investor relies mostly on Fundamental Analysis. This is the analytical method of predicting long term prospects of the given asset.

The most popular approach among long term investors is called “buy and hold”. It means that you buy shares of some company and forget about them for a long time. Such approach can be very dangerous, even devastating in the extremely volatile market such as today’s Nasdaq. Let’s consider someone who bought shares of Amazon.com at their peak value of around $100 per share at the beginning of year 2000. One year later they were worth $10 per share. If that person had invested $100,000 , one year later his holdings would be worth $10,000. Such devastating losses can occur if “buy and hold” strategy is literally followed. Investing should not be about weathering storms together with your “loved” company; it is about making money.

On the other hand, a trader is trying to profit exactly on those short-term price fluctuations. Holding periods for active traders and day traders are very short, in many cases minutes, even seconds. All the day trader needs to make a comfortable living is to catch 1-2 point move in the stock price on any given day. The most powerful tool in the hands of day trader is his ability not to take a trade. He or she only takes those trades that have the highest probability of success. In their decisions, day traders rely mostly on Technical Analysis, a form of market analysis that is trying to predict shorter-term price directions. Download your free candlestick guide.

The most popular forms of active trading and day trading are:

Scalping – scalping is a form of daytrading that has the shortest holding timeframe. Scalper is trying to profit from very small movements in the stock prices such as ¼ or even 1/8. There are very, very few traders who are able to scalp successfully. Scalping is profitable only for brokerage houses and therefore I do not consider it as a viable trading option. Learn forex scalping.

Swing – swing trading is a form of short term trading in which you are waiting for a stock to hit certain support or resistance level and reverse its trend. This is very popular and viable trading approach especially in markets that do not clearly trend in either direction. Know swing trading.

Breakout – breakout trading is a form of short term trading in which you are waiting for a stock to pass through certain support or resistance level as a clear sign of continuation of that trend. It is also viable approach especially in the clear bull or clear bear markets.

Sep 12 2009

Is Investing On The Forex For You?

Twenty-four hours a day, every day, the Forex market is in business. Foreign exchange, Forex or FX are a few of the terms representing the trading of the world’s various currencies: the largest market on earth.

Becoming a successful Forex trader is the goal for millions across the world, but many – even most – new traders fail within the first year or lose thousands of invested dollars because they haven’t grasped a thorough understanding of the industry and the way the market works.

With money to be made in the Forex market and every hour of the day to trade, appropriate and effective Forex training and grasping the right Forex trading strategies are of utmost importance.

In essence, a currency trade is the buying of one currency while simultaneously selling another. And with trades totaling more than 1.5 billion U.S. dollars every day, the Forex market deals with 100 times more currency than the New York Stock Exchange. Unlike trading on a typical stock market, the Forex market is considered an “over the counter” market because it is not conducted by a central exchange. Instead, Forex trading strategy takes place on an “interbank” market.

Trading deals are done directly between the two participating accounts necessary to make a trade and occur either over the phone or on worldwide electronic networks. Sydney, Tokyo, London, New York and Frankfurt are the main centers, which means Forex trading happens across the world 24 hours a day.

Trading opportunities are endless in this market because currency values are weakening and strengthening in relation to other currencies on a constant basis. The market moves every minute of the day and implementing the right Forex trading strategy is key in getting ahead of the game.

The benefits of trading this market are endless; from the opportunity to trade all day, every day from Sunday evening to Friday evening, being able to trade instantly with the latest news affecting the markets, to always having buyers and sellers to trade with in this very liquid market.

The liquidity of certain currency pairs makes price stability possible – even probable – and ensures narrow spreads. Trading the most popular currencies is cheaper than trading others because of the high level of liquidity, as well.

Additionally, the fact that Forex trading is most often traded without commissions multiplies the benefits of this field of trading. For those traders interested in dealing with the market on a frequent basis, this aspect is highly beneficial.

Forex training is key to getting the most out of each dollar. Any inexperienced investor that decides to start trading the forex without the proper tools and education, may as well play their money on a roulette wheel at a casino. With the proper education and mentoring, however, investors become far more likely to reach their financial goals.

Many traders spend thousands of dollars on various Forex trading educational outreach programs that don’t produce any results, while others take the risk of playing the market on their own. The right Forex trading strategy program is vital to success in the market.

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