Bank of America (NYSE:BAC)

Bank of America just selected it's CEO (finally) to be Brian Moynihan. Now they have an experienced CEO to lead the bank. Get ready for the stock to skyrocket. He's the one who will get BAC out of all the messes that it's in. Hop on the BAC train while you still can. At $15 and change, the stock is ripe for the picking!

Market Forecast

Stocks have been performing quite well lately and we have been reaching new highs day after day. Some stocks though have run up too far too fast and are due for a small correction. Below I have a chart of the Dow Jones Industrial Average and I've outlined the pattern that is being formed, and a very rough forecast of where it is expected to go in the next week or two. I suggest that it's time for taking some profits and raising some cash for when the market as a whole goes 3-5% lower..

Eldorado Gold (TSE:ELD) (NYSE:EGO)

Eldorado Gold is now my number 1 play on rising gold prices. It's one of the cheapest gold producers in the world, and a very well run company. They recently purchased Sino Gold, another low cost producer mining in China. I previously recommended Yamana Gold (YRI/AUY) and the GLD fund. Which have all had great runs since. I think Yamana has had a great run which is why I think it's time to sell that one, because it is not a top tier gold company.
The GLD ETF (Exchange Traded Fund) which tracks the price of gold is still buy, as gold is going higher. Some analysts are saying it could go to $2500/ounce which is quite possible since interest rates are low and are staying low for some time, and the world has been printing money off like crazy.

Eldorado is currently priced just a few cents away from $14. They are the lowest cost producer, and for every dollar that gold rises, it's a dollar in their pocket. Eldorado is constantly increasing production, which means they are also growing along with the price of gold. The stock is an excellent long term play, and they are benefitting highly from the rise in gold. Eldorado is a buy at any pullback. The stock is going to $20.

Wynn Resorts (NASDAQ:WYNN)

Back on September 14th I told you that Wynn was a buy. The stock was at $65 then and is now trading at $69. I also told you that if the stock dropped below the $55 mark it would be huge buying opportunity, which you had near the end of October when the stock dropped to the $53-$54 range for just a few days.
So do I still think Wynn is a buy? Wynn is even more of a buy now than it was when I first recommended it. The company has a lot of cash in store and very little debt, especially relative to its casino peers LVS and MGM. China Macau casinos have stabilized and are helping Wynn turn up profit. Even Las Vegas casinos are stabilizing, and will begin to show some growth possibly in the next year, which is something to look forward to in 2010 that could send the tock higher.
But right now there's even more good news. Wynn Resorts is declaring a special and massive $4 dividend with ex dividend date Nov 17 2009. At the current stock price of $69, that's a 5.7% yield just for holding the stock at the close on November 16th. The company also said it would start paying a $0.20 dividend beginning in 2010. They simply love shareholders.
But will the stock tank after the dividend has been paid out? Wynn's technicals are also looking great right now, which I think can send the stock soaring further. Wynn was upgraded last week to a Buy by Deutche Bank, which a target price of $80. Personally, this target is a bit low. Take a look at the chart below. Wynn has once again just broken through its 50 day moving average. If you look back, each time it has done so, the stock has moved up $20-$30. I can see Wynn between the $90-$100 by year end.

Canadian Oil Sands (TSE:COS.UN)

Canadian Oil Sands has recently broken through its $30 resistance. The stock made a pullback after the recent unemployment report, which gives investors a great opportunity to buy. The stock has been inching its way higher even though oil has stayed roughly the same over the past few months. COS.UN can break even when oil prices are $38 a barrel. At $70 oil, Canadian Oil Sands can increase its dividend and will also provide some growth. I see oil heading higher by year end as we make our way out of this recession. COS.UN could be at $40 by then with a hefty yield.

Wynn Resorts (NASDAQ:WYNN)

Wynn is a heated Casino stock that can make you a ton of money without taking much of a gamble. Sentiments have been so bearish towards the casinos, that all the recent analyst upgrades have surprised investors and are sending it much higher. They’re not done yet, and the stock isn’t done going higher, because everyone wants to get in on Wynn. Wynn was over $164 a share before this great bear market and recession occurred. A cut back in gambling in Vegas has taken a toll on the stock. But Wynn’s strong balance sheet and very little debt relative to the other casinos makes it a great play on the turnaround in casinos. Its China casinos are also growing even faster than in the States, which have already helped Wynn blow away the earnings estimates.

Now the stock has had a quick run up from $52 to $65. People should be taking some profit which can bring the stock down a few bucks. If it ever goes below $55, the stock is a steal. I would also be buying under the $60 level.

Vast Exploration (CVE:VST)

VST is a small oil and gas company that is up almost 800% from its 52-week low. The stock has had a recent move upward, but is it still a buy? Taking a look at the technical chart below, Vast Exploration has used its 200 day moving average in the past, as a means of propelling itself higher. Between March and June 2009, the stock rallied 49 cents off its moving average, before taking a pullback. Again, just weeks ago, the stock broke through again and rallied almost the same amount (47 cents to the high and 42 cents to where it is today). It looks like the stock can only run up a few more cents before taking another breather. Even though I’m bullish on VST, wait for a pullback to the low 70s before buying more. The stock has run up too far is such a short period of time.

Potash Corp of Saskatchewan (TSE:POT) (NYSE:POT)

Fertilizer demand in the last year has slowed dramatically. However, farmers can’t hold off for much longer on giving their crops the much needed nutrients. Potash helps increase crop yields and defends against pests and disease. Without potash crop yield are significantly lower. Farmers, especially in China where the population is larger, will start placing orders for potash ramping up the demand. They can’t hold off purchasing the nutrient forever since when they harvest their crop, it removes these valuable nutrients from the soil that within 18 months need to be replenished. Potash Corp of Saskatchewan (TSE:POT) (NYSE:POT) is the best run company in this business and is sure to profit the most. Potash Corp trades at a premium to its peers and is known to have the most powerful momentum on the way up. The chart below shows the surge in the share price when potash prices and demand skyrocketed in 2007 and 2008. The stock is cheap right now, but will quickly turn when the demand spikes in the coming year.

Get in on Natural Gas

Natural gas is the next green fuel that every investor wants to get in on to profit off of. The commodity has taken a huge tumble during this recession. However, most natural gas stocks have held their ground – some have even gone up despite the downfall of the underlying commodity.

For the long term investor, Linn Energy (NASDAQ:LINE) has an enormous dividend yield of 11%. If the stock price does nothing for 10 years, you’ll still double your money if you reinvest the dividends.



A more speculative play however, is Corridor Resources (TSE:CDH) which is a junior natural gas player in Canada. The stock is down quite a bit from its recent high of $3.35, and down even more from its $11 high last year. If the price of natural gas itself were to move back up to the $6-$8 range like most natural gas company CEOs are predicting, the stock can double and even triple along with the price of the commodity. CDH will probably hold its ground even if natural gas were to fall a bit further.



If you think natural gas is heading up and you’re looking for something more volatile with massive potential upside, Horizon Beta Pro’s 2x Natural Gas ETF (TSE:HNU) will return great profits if the commodity reverses its downward trend and rebounds.

General Electric (NYSE:GE)

General Electric is a diversified business on its own, with branches in the aerospace, banking, media, health, and energy sectors. The chart below shows the classic buy pattern that GE has formed. The stock just recently broke though $14.75 which was a point of high resistance. It broke through on high volume as indicated below, which signifies that the upward move will continue. Fundamentally, GE’s earnings rely heavily on an improving economy. The stock price is very far off of its high, unlike GE’s peers in the financial sector. In the coming year GE could double.

Bank of America (NYSE:BAC)

The US banks have had a large role in causing this recession. But now that the economy is recovering and interest rates are low, banks are poised to lead us out of the hole. Bank of America (NYSE:BAC) is the most undervalued of the largest banks in the US. You may think that you missed the move from the March lows, but we’re looking to where BAC is going rather than where it’s been. The stock is still down 50% from merely a year ago when it had already been hit hard. Also notice the high volume on the stock as it continues its uptrend. This shows much strength in the rising stock price.

The stock is rebounding off its moving average. A year ago, buying the stock at $17 and change would have seemed like a steal. But the bank was knocked down to lows far beyond that. Now the fundamentals are better, and the $17 buy is an excellent purchase. The company has equity of $255B but is trading with a market cap of barely $150B, when most of its peers are trading at or higher than their shareholders’ equity.

With record low interest rates and a bottom in housing, the bank can start paying off TARP money and start making money for investors. The stock could reach $22 by year end, and over $30 in 2010.

Research In Motion (TSE:RIM) (NASDAQ:RIMM)

Research in Motion (TSE:RIM) (NASDAQ:RIMM) is making another move higher. The smart-phone stock has received multiple upgrades from various firms, and is expected to outperform the market.

RIM is associated with smart phones for businesses. I don’t think this trend is dying out anytime soon. They keep moving to different market segments and releasing their Blackberry solution there. RIM has also made a bold move into the consumer market my selling to regular customers. They have a phone for everyone.

Apple (NASDAQ:AAPL) is also on a roll here, but RIM has greater upside potential. RIM’s PE ratio (Price-Earnings multiple) is hovering around 22 while Apple’s is at 30. This dramatically undervalues and underestimates RIM’s growth potential. RIM blew away the numbers last quarter, in a recession, and the stock has been lagging behind Apple’s for months now. It’s time for RIM to catch up.



The stock has been flat lining for a while, according to the chart, but has once again broken past its 200 week moving average, and is ready to skyrocket! RIM’s long term fundamentals are also great, as smart-phones will have rapid growth in the mobile-phone market within the coming years.

Quadra Mining (TSE:QUA)

Copper prices have edged up significantly from their lows yet copper stocks have not gone up enough to reflect their future earnings. Quadra Mining (TSE:QUA), a junior mining company that mines mainly for copper (and gold), can be a lucrative play on China’s increasing demand for copper. Copper itself has made a move from its near $1 lows to almost $3 in a very short time. If it continues this trend, copper can move to its high of $4 in a matter of months. The last time copper was at its high, Quadra traded at $27 a share. Now Quadra is in better position with increased productivity and is ready to capitalize on the higher copper prices. The stock only trades at $12 and change which leaves room for massive upside. I would wait for a small pullback before buying some. Anything in the $11 range is a good purchase.

US Steel (NYSE:X)

US Steel (NYSE:X) is bound to profit from the increased construction in China which shows no slowing down. The stock can quadruple before reaching its all-time high near $180 per share. It probably won’t get there anytime soon, but the stock can easily double with the rise in demand for the steel industry as we exit this recession. Take a look at the drop in the long term chart below.

Compared to peer Nucor (NYSE:NUE), US Steel has more upside potential. Nucor, although better run, has a business model based in recycled steel, and is a more stable stock. Nucor is a great long term play that has a nice dividend as well.

Steel Stock Comparison:

US Steel
Current Market Cap: $6B
Earnings in 2008: $2.1B
Nucor
Current Market Cap: $14B
Earnings in 2008: $1.8B

As shown in the table above, US Steel has the potential to earn more than Nucor, yet it is trading at a third of the market cap. I see US Steel as a clear buy.

Royal Bank (TSE:RY) (NYSE:RY)

The Royal Bank is Canada’s largest company and my favorite Canadian bank. The company is well managed and in very good financial standing, unlike its US counterparts.

RY (TSE:RY) (NYSE:RY) earned a record $1.56B in its most recent quarter and surprisingly the stock is still trading in the $56 range. The stock has an all time high over $61, and that was when the net earnings was even lower than it is today. Just imagine how much Royal Bank can earn when the economy recovers.

The stock is above its 200-day moving average, and is rebounding off of it. If we extrapolate the trend further into the future, as shown below, the chart looks like it can hit $60 in just a few months.



The stock is near its 52-week high, but is gradually progressing towards its all time high. Of course with record earnings, and excellent capital ratios, the stock should surge past it. Stocks don’t get to their 52 week highs for nothing. Royal Bank is a great long term play and has a good history for increasing its dividends. The current 3.5% yield itself is not too shabby given the upside potential.

Frontline (NYSE:FRO)

Frontline (NYSE:FRO) is the world’s largest tanker company. They ship oil and other bulk as well as raw materials. China is a large driver of these commodities, which can send the stock higher.

The stock ends to follow the Baltic Dry Index (see below), which tracks shipping rates. The Baltic Dry Index is at 2400, almost triple from its bottom, whereas Frontline is trading only dollars away from its 52 week low. Though the index has taken a fall from it’s most recent high near 3500, it’s sure to go higher with the rest of the economy.





Frontline is known for its large dividend payout. Right now the dividend is $0.25 per share every quarter – a healthy 4.5% yield. The company has been known to raise its dividend up to $3.00/share for the quarter during thriving economies. That’s 12 times the current yield, which is an enormous 54% at these prices.

It may take some time for Frontline to raise its dividend back to past levels, but the stock has some huge upside as well. It’s trading at $22 while the 52 week high is over $54. The economy is recovering which makes Frontline a great long term buy.

Gold to Continue Upward Trend

Gold is an important part of any investment portfolio. The commodity usually increases when there is economic chaos, or when there is inflation. Gold broke though $1000 today (it’s highest in over a year) showing economic strength as inflation rises once again.

Taking a look at the long term gold chart below, you can see the classic flag pattern which will lead to massive gains since the fundamentals are sound. Some CEOs think gold can move past $1200 in the near term.

In the past, gold moves so fast that it is said not to touch the sides. There was a small pullback at the end of the day. You may be able to get in one of the Recommended Plays at a good price.

Recommended Plays:
BUY:

Gold – Buy the commodity as it is going higher!

Gold ETF (NYSE:GLD) – The gold ETF that tracks the price of gold will move almost exactly the same percentage as the commodity itself. This is great to own especially if you don’t want to buy an actual physical piece of gold.

Eldorado Gold Corp (TSE:ELD) (AMEX:EGO) – One of the lowest-cost gold mining companies out there that can profit huge from the large increase in gold prices. They just made an acquisition which will even further increase their gold production.

Yamana Gold (TSE:YRI) (NYSE:AUY) – A midcap gold producer that greatly benefits when the price of gold goes up. Last year when gold touched $1000 they tripled their dividend and the stock skyrocketed at $19.