Stock In Focus: United State Oil Fund (USO)

This Oil Fund has risen 77% since reaching a low of 22 in February of this year.

Looking at the chart of USO above, it is above its 20 and 40 day moving averages which is bullish for USO. It is also above its 100 day moving average and is close to but not yet above its 200 moving day average. If it does move above its 200 moving day average, USO could continue to move higher since this is an important level for traders and many traders would buy stocks once a stock moves above its 200 moving day average.

ADX is close to 30 which is indicating that a potential strong uptrend is developing for USO.

MACD is at 2 and above its signal which is bullish for USO. MACD is also seen to be trending upwards which is bullish for USO.

Slow Stochastic is at 86 which is at overbought levels so it is possible for a correction to occur sometime this week. However since USO is above its moving day averages and is in an uptrend, even at such high stochastic levels, it could still move higher. However, the US dollar has been badly battered in recent weeks and it is possible that if the US dollar rises, this would have an adverse effect on commodities including oil. So it is possible that USO could experience a correction this week.

USO Fund Profile

The fund seeks to reflect the performance, minus expenses, of the spot price of West Texas Intermediate (WTI) light, sweet crude oil. The fund invests in futures contracts for WTI light, sweet crude oil, other types of crude oil, heating oil, gasoline, natural gas and other petroleum based-fuels that are traded on exchanges. It may also invest in other oil items such as cash-settled options on oil futures contracts, forward contracts for oil, and OTC transactions that are based on the price of oil. The fund is nondiversified.

Total Expense Ratio 0.45%
Total Net Assets 2.80Billion USD
Fund Inception Date: 10-Apr-06
Legal Type: Exchange Traded Fund

TOP 10 HOLDINGS of USO ( 50.00% OF TOTAL ASSETS)

F/C Ws Crude (Fut) 3.49% of Assets
F/C Wti Crude (Fut) 20.43% of Assets
Wti Crude (Fut) 26.08% of Assets

The following is Energy Information Administration (EIA) forecast for U.S. Crude Oil (please note that forecasts for energy prices are difficult to determine due to price volatility):

Consumption: Due to the weak economy, total consumption of liquid fuels and other petroleum products is projected to contract by 550,000 bbl/d or barrels per day (2.9 percent) in 2009, including a decline of 220,000 bbl/d (5.5 percent) in distillate fuel consumption and about 100,000 bbl/d (6.9 percent) in jet fuel consumption.

Motor gasoline, however, is projected to increase by 30,000 bbl/d (0.3 percent) as a result of the substantial declines in retail prices from last summer and the stabilization of real disposable income. The gradual economic recovery in 2010 is expected to contribute to a 300,000-bbl/d (1.6 percent) increase in total liquid fuels consumption.

Production: Total domestic crude oil production averaged 4.96 million bbl/d in 2008, down from 5.06 million bbl/d in 2007 (U.S. Crude Oil Production Chart). Production is expected to increase to an average of 5.27 million bbl/d in 2009 and 5.32 million bbl/d in 2010, including an estimated expectation, with a wide range of uncertainty, of hurricane‐induced outage of about 4.5 million barrels for the offshore region in 2009.

Prices: WTI crude oil prices, which averaged $99.57 per barrel in 2008 (Crude Oil Prices Chart), are projected to average $58.70 per barrel in 2009 and $67.42 per barrel in 2010. However, energy price forecasts are highly uncertain.

One measure of how the market reflects this uncertainty is the sizable participation in near-term options on crude oil futures contracts at strike prices that are significantly different from current futures market prices. This reflects the tendency for crude oil prices to fluctuate within a wide range in a short period of time.

EIA projects that regular-grade motor gasoline retail prices, which averaged $3.26 per gallon in 2008, will average $2.33 per gallon this year, up 21 cents per gallon from last month’s Outlook projection. These prices are projected to rise to $2.56 per gallon in 2010, 26 cents above that projected in the previous Outlook.

Diesel fuel retail prices, which averaged $3.80 per gallon in 2008, are projected to average $2.40 per gallon in 2009, up 14 cents from the previous Outlook. Diesel fuel retail prices are projected to average $2.67 per gallon in 2010, up 19 cents per gallon from the previous Outlook.



References

Yahoo Finance
Bigcharts.com
Energy Information Administration



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To appreciate beauty; to find the best in others; to leave the world a bit better whether by a healthy child, a garden patch or a redeemed social condition; to know even one life has breathed easier because you have lived. This is to have succeeded.

Ralph Waldo Emerson

Stock In Focus: Baidu Inc (BIDU)

Take a look at the chart for BIDU below:





















In the past six months BIDU stock price has increased 200%.

Looking at the chart above, BIDU is above its 20 and 40 day moving averages which is bullish for BIDU. Crucially, it is also above its 200 day moving average which is an extremely bullish signal according to traders.

The ADX is above 50 which shows that BIDU is in a strong uptrend.

The MACD is also positive and far above its signal, both bullish signs for BIDU.

The Slow Stochastic is at 91.944 and is above its signal which is bullish for BIDU. Being at 91.944 means that it is above its high threshold of 80 and is at overbought levels. However, since the stock is in a strong uptrend, the BIDU stock price could still continue to rise with minor corrections from time to time.

So all these indications point to very bullish signals for BIDU.

The following is a company profile of Baidu Inc:

Baidu, Inc. provides Chinese language Internet search services primarily in China and Japan. The company offers a Chinese language search platform that enables users to find online information, such as Web pages, news, images, and multimedia files.

Its products include Baidu Web Search that allows users to locate information, products, and services using Chinese language search terms; Baidu Post Bar and Baidu Knows, which provides users with a query-based searchable community; and Baidu News that provides links to local, national, and international news.

The company also provides Baidu MP3 Search that provides algorithm-generated links to songs and other multimedia files; Baidu Image Search to search various images on the net; Baidu Video Search to search for and access through hyperlinks of online video clips that are hosted on third parties' Web sites; and Baidu Space to create personalized homepages in a query-based searchable community.

In addition, it offers Baidu Hi, an IM service; Baidu Youa, an online C2C platform; Baidu Safety Center for virus scanning, system repair, and online security evaluations; Baidu Desktop Search, a downloadable software that enables users to search various files saved on their computer; Baidu Sobar, which makes search function available on every Web page that a user browses; Baidu Anti-Virus for anti-virus software products and computer virus-related news; and Baidu Internet TV that allows users to search, watch, and download various shows and programs.

Baidu, Inc. serves SMEs and corporations, as well as e-commerce, IT services, consumer products, electronic products, machinery, manufacturing, medical, entertainment, education, franchising, financial services, real estate, ticketing, and tourism industries.

The company was formerly known as Baidu.com, Inc. and changed its name to Baidu, Inc. in December 2008. Baidu, Inc. was founded in 2000 and is headquartered in Beijing, the People's Republic of China.

These are top institutional holders of BIDU stocks:

MORGAN STANLEY 1,729,241 shares 5.01%
JOHO CAPITAL, L.L.C. 1,586,638 shares 4.60%
THORNBURG INVESTMENT MANAGEMENT INC. 1,178,788 shares 3.42%
Edinburgh Partners Limited 1,077,300 shares 3.12%
BAILLIE GIFFORD AND COMPANY 817,972 shares 2.37%
FMR LLC 817,800 shares 2.37%
Calamos Advisors LLC 756,210 shares 2.19%
Credit Suisse/ 746,185 shares 2.16%
WELLINGTON MANAGEMENT COMPANY, LLP 730,072 shares 2.12%
Coatue Management, LLC 544,281 shares 1.58%

Analysts expect earnings for Baidu to increase by 41.5% next year:

Earnings Estimates
Current Qtr Jun-09 Average EPS Estimate 1.43
Next Qtr Sep-09 Average EPS Estimate 1.71
Current Year Dec-09 Average EPS Estimate 5.78
Next Year Dec-10 Average EPS Estimate 8.18

The following are Baidu's first quarter earnings announcement as reported by PRNewswire:


First Quarter 2009 Highlights
-- Total revenues in the first quarter of 2009 were RMB810.7 million
($118.6 million), a 41.1% increase from the corresponding period in
2008.
-- Operating profit in the first quarter of 2009 was RMB198.5 million
($29.1 million), a 34.7% increase from the corresponding period in
2008.
-- Net income in the first quarter of 2009 was RMB181.1 million ($26.5
million), a 23.5% increase from the corresponding period in 2008.
Diluted earnings per share ("EPS") for the first quarter of 2009 was
RMB5.22 ($0.76); diluted EPS excluding share-based compensation
expenses (non-GAAP) for the first quarter of 2009 was RMB5.89
($0.86). Costs and expenses related to Baidu's Japan operations for
the first quarter of 2009 were RMB39.5 million ($5.8 million), which
reduced diluted EPS by RMB1.14 ($0.17).



Reference

Yahoo Finance
Bigcharts.com
PRNewswire Asia


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To appreciate beauty; to find the best in others; to leave the world a bit better whether by a healthy child, a garden patch or a redeemed social condition; to know even one life has breathed easier because you have lived. This is to have succeeded.

Ralph Waldo Emerson

Stock In Focus: iShares FTSE/Xinhua China 25 Index ETF (FXI)

Looking at the chart of the China ETF or FXI (Exchange Traded Fund-which is like a mutual fund of Chinese stocks that are traded like stocks and have low fees). FXI has been on an uptrend since March of this year. FXI has risen by more than 50% since the beginning of March.

MACD is positive and has broken above its signal, which is bullish for FXI.

The slow stochastic is at 83.166 which is fast approaching overbought levels. So there may be a correction during this week.

However the positive manufacturing report for China released last week added to the overall global investor optimism has meant that FXI may continue its uptrend. Analysts have signified that China may experience a quicker recovery than the rest of the world due to its strong economic fundamentals and a strong financial system including banks with good balance sheets.

The following are some information on the China ETF.

FXI seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the FTSE/Xinhua China 25 index. The fund generally invests at least 90% of assets in securities of the Underlying index and in depositary receipts representing securities of the Underlying index.

The Underlying index consists of 25 of the largest and most liquid Chinese companies. It may invest the remainder of assets in securities not included in its Underlying index but which BGFA believes will help the fund track the Underlying index. The fund is nondiversified.


Total Expense Ratio 0.74%
Annual Holdings Turnover 24%
Total Net Assets 7.07Billion

OVERALL PORTFOLIO COMPOSITION (%)

Stocks: 92.59
Bonds: 0.00


TOP 10 HOLDINGS ( 60.42% OF TOTAL ASSETS)

Bank of China 7.17% of total assets
BOC HONG KONG HLDG HKD5 4.18% of total assets
China Life Insurance Company, Ltd. 8.86% of total assets
China Mobile Ltd. 9.17% of total assets
China Petroleum & Chemical Corporation 4.13% of total assets
China Telecom Corporation Limited 4.49% of total assets
CHINA UNICOM 4.21% of total assets
CNOOC, Ltd. 6% of total assets
Industrial & Commercial Bank of China 8.14% of total assets
PetroChina Company, Ltd. 4.07% of total assets


EQUITY HOLDINGS

Average Price/Earnings 10.89
Average Price/Book 1.37
Average Price/Sales 1.18
Average Price/Cashflow 3.39


SECTOR WEIGHTINGS (%)

Industrial Materials 4.22%
Energy 20.67%
Utilities 2.57%
Telecommunication 17.87%
Business Services 8.27%
Financial Services 46.26%


A financial analyst Larry Edelson gave reasons why he was bullish on China:

A) Beijing now has nearly $2 trillion in cash reserves , more than any other country on the planet, giving it plenty of ammunition to protect its economy.

B) China's banks are now the strongest in the world , with capital ratios far above almost all other large banks in the world and debt levels that are far lower (even allowing for an inevitable increase in non-performing loans).

C) Beijing has recently committed to spending over $600 billion — equivalent to nearly 30% of GDP — on infrastructure, rural development, healthcare, education, and housing. More spending is likely to be announced soon.

D) Interest rates have been cut five times already and will likely be cut further , while bank reserve requirements have also been lowered.

E) Taxes have been slashed on housing, personal income, sales and value added taxes — plus, tax rebates for exporters have just been upped as of December 1.

F) Downpayments on housing have been reduced from 30% to 20%, which will boost domestic spending throughout the economy.

G) Beijing just announced it will pump up money supply to a minimum of 17% growth in 2009.

H) Many great Chinese stocks are now trading at very cheap valuations, as low as 2 times earnings!



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To appreciate beauty; to find the best in others; to leave the world a bit better whether by a healthy child, a garden patch or a redeemed social condition; to know even one life has breathed easier because you have lived. This is to have succeeded.

Ralph Waldo Emerson

Stock In Focus: Origin Agritech Limited (SEED)

By looking at the chart above of SEED, this stock has been on a price uptrend for the past few months.

Looking at the momentum indicators, the MACD is above its signal which is bullish and positive which is also positive.

The RSI is around 50 which is neutral i.e. neither too high or too low. So this means SEED price can move up or down. But there is still room for more upside movement.

Stock Profile

Origin Agritech Limited, through its subsidiaries, engages in the research, development, production, sale, and distribution of hybrid crop seeds in China. It offers primarily corn, rice, cotton, and canola seeds.

The company sells internally developed and licensed crop seeds. Origin Agritech distributes its products through first-level direct distributors, second-level distributors, and retailers.

It has license agreements with the Shijiazhuang Liyu Technology Development Co., Ltd. and the Henan Agricultural University. The company was founded in 1997 and is headquartered in Beijing, China.

SEED TOP 5 INSTITUTIONAL HOLDERS AT 31 MARCH 2009

Holder $ Value of Holdings

Claymore Advisors, LLC $2,469,800
ROYCE & ASSOCIATES, INC. $1,510,476
HEARTLAND ADVISORS INC. $10,365,092
UBS AG $149,077
GOLDMAN SACHS GROUP INC $88,482


Recently, the company announced that its profitability has improved. The company's first quarter 2009 financial results improvement included:

1Q09 Deferred Revenue was RMB176.63 million (US$ 25.84 million) increased 57.63% for the three-months ended December 31, 2008 as compared to RMB112.05 million (US$ 15.36 million) for the same period last year.

1Q09 Total Operating Expenses for the three-months ended December 31, 2008 were RMB39.96 million (US$5.85 million) decreased 15.0% as compared with RMB 47.01 million (US$6.44 million) reported for the same period in 2007.

Company CEO was quoted as saying "Our positive trends we saw in FY08 are carrying into FY09. Q109 demonstrated these positive growth trends. We expect to remaining quarters to show similar growth trends.

The strength of our renewed product portfolio and our long-term, technology-based solutions are meeting the demands of a growing market opportunity. We had two good quarters, and we continue to press on toward more advanced agricultural technologies, we are determined to drive improved performance going forward."


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To appreciate beauty; to find the best in others; to leave the world a bit better whether by a healthy child, a garden patch or a redeemed social condition; to know even one life has breathed easier because you have lived. This is to have succeeded.

Ralph Waldo Emerson