What to Buy: HOTT
The buy pick is made every evening at Midnight before the next day begins. The pick is a single day trade of a stock or
ETF. The Oxen Group provides analysis, entry/exit points, resistance levels, and a rating for the pick. Picks are only
single day trades. Longer trades are below.
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The Oxen Group is trying out another new style of
investing tomorrow. In this market, finding a single
day trade you can count on pretty difficult.
Tomorrow, however, we are fairly confident the
market should have a solid increase. Alcoa earnings
came out kicking for the beginning of Q2 earnings, and
the market has responded with some of the first green
futures we have seen in quite some time. With
bargains in the market, Alcoa looking great, a positive
report from the Fed about consumer credit, and the
possibility of positive earnings from a number of tech
companies. I would say this Thursday is looking as
good as the market can look. Therefore, Hot Topic Inc.
(HOTT) may be a very nice play for some large
movement. The company actually had very negative
after hours news, lowering their Q2 earnings outlook
and lowering their revenue estimates. The company
will definitely take a stumble tomorrow morning on
the news, with a 6% decline in after hours. However, if
the market really does make a move up tomorrow, Hot
Topic may be in a position where it can significantly
move up from valley. The stock is very near a lower
bollinger band, it is oversold, and it really has little
room for downward momentum. The Oxen Group is
confident the stock should bounce off a bottom and
move upwards from there. How low it goes is the
challenge, but we think a 2 to even 3 percent move
downwards should be a nice play to buy in. The stock
is not a great long term play, but it is a nice play off a
bottom tomorrow.
Entry: Recommend buying in around 2-3% decline
from opening price or 20-45 minutes in.
Exit: We recommend exiting after a 2-4% increase.
Stop Loss: We recommend a 3% stop loss on all buy in
prices
Upper Resistance: 7.25
Oxen Rating*: 4
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