Earnings season is about to wrap up and put us smack into the middle of the August doldrums in the market. What does that mean for us as investors? Well, volume dries up and volatility increases making the market a bit choppy to navigate so just hold on until Wall Street comes back from summer vacation at the end of the month. While the Magic Money Portfolio is only two months old, August does afford us an opportunity to catch our breath and take a look at what we have done to date. In fact, I am not adding any new holdings to the portfolio this week. The portfolio is sitting on roughly a 23% cash position so I will look for any good opportunities on pullbacks before I add to the portfolio.
DUK, GE, SPLS, WEN and XRX have all enjoyed a nice little run up thanks to the recent leg of the rally the market has had. Look for a little profit taking by the the big traders on the street and consolidation in price but barring any major bad news, these five stocks are likely hang around their current levels through the next few weeks. Additionally, as I mentioned previously, I did some readjustment to my personal portfolio and initiated a long position in XRX.
ENTG is sitting right over my stop-loss price and is kind of flip of the coin right now. ENTG has not taken part in the recent rally but investors may find it more attractive in the upcoming weeks and push its price higher while they readjust their positions in stocks that have enjoyed a price increase over the last month. On a technical note, ENTG is sitting on its 200-day moving average (200SMA) which is proving to be a support level for the stock. If ENTG falls through its support, look to sell the stock and wait for another opportunity to buy into it.
AA is stuck in its trading range and is not likely to see much movement until the economy builds up a bigger head of steam but we knew that when we added it to the portfolio. AA should be trading ex-dividend within the next week to ten days. Yes, I know AA has been a market laggard but I wholly believe this stock has some very good upside potential as the economy recovers. I'm not sure when that will happen but hang in there.
Finally, we come to IAG. This gold miner/producer has had a wild ride with the price of gold. Gold seems to have found a temporary home, trading in a range between $1300 and $1320 an ounce but the precious metals shows all the signs of another pending run up. IAG has been running into resistance at the $5.50 level but I suspect that has a lot to do with gold meeting resistance at the $1320 level. IAG has come down to a minor support level at $4.75, it's 50SMA. Should IAG fall through that level it should find major support at the $4.50 level. Ultimately, what the stock does at this point is tied directly to the price of gold. If we get another run up in the price of gold and subsequently a run up in the price of IAG, I will start taking profits off of the table when the price exceeds the $6.25 level. If and when this happens, it is not in my providence to know. All I can suggest is to hold on for now. We knew this was going to be a wild ride when added to the portfolio originally. IAG will be reporting earnings on August 11th so keep an eye out for some wild price fluctuations.
IAG 1-Year Price Chart w/Moving Averages
Since I haven't added or changed any positions in the Magic Money Portfolio, here is an update for the close of trading on August 02, 2013.
07 June 13 - 1000 shrs IAG @ $5.29 per share. (BUY)
13 June 13 - 500 shrs AA @ $8.20 per share. (BUY)
21 June 13 - 100 shrs DUK @ $65.58 per share. (BUY)
28 June 13 - 200 shrs GE @ $23.19 per share. (BUY)
28 June 13 - IAG traded ex-dividend $0.125 per share
11 July 13 - 100 shrs SPLS @ $16.67 per share (BUY)
11 July 13 - IAG dividend disbursement, $0.125 per share, $125 (INCOME)
18 July 13 - 700 shrs WEN @ $6.81 per share (BUY)
19 July 13 - 100 shrs SPLS @ $16.38 per share (BUY)
26 July 13 - 500 shrs ENTG @ $9.53 per share (BUY )
26 July 13 - 500 shrs XRX @ $9.69 per share (BUY)
Magic Money Machine Portfolio (02 August 2013)
Cash: $ 11,768.00
1000 shares IAG- $ 4.81 $ 4,810.00
500 shares AA - $ 7.97 $ 3,985.00
100 shares DUK - $ 71.75 $ 7,175.00
200 shares GE - $24.70 $ 4,940.00
200 shares SPLS - $17.00 $ 3,400.00
700 shares WEN - $7.33. $ 5,131.00
500 shares XRX - $10.00 $ 5,000.00
500 share ENTG - $9.42 $ 4,710.00
Total $ 50,919.00
+ 1.84%
Stop-loss list
IAG - $3.90
AA - none at present
DUK - none at present
GE - $22.75
SPLS - $16.10 (updated 26 July 2013)
WEN - $5.50
XRX - $8.90
ENTG - $9.30
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