9th July, 2009
Paul A. Ebeling, Jr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highlyregarded financial market letter, read by opinion makers, business leaders and organizations around the world. Ebeling has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/ Support Levels.
Paul A. Ebeling, Jr. firstname.lastname@example.org
The Red Roadmaster’s US Market Re-cap + Stock Talk
July 9, 2009
Alert: Red Roadmaster looks at Pepsi Bottling Group Inc. (PBG) for the 1st time. Health-care and consumer staple stocks rose Wednesday.
Recap of the US Stock Market Action July 9, 2009 The DJIA and NAS finish in the Green on a late afternoon Rally. The DJIA gained 14.81 pts (0.18%), to close at 8,178.41, the S&P 500 lost 1.47 pts (0.17%) to close at 879.56, the NAS tallied up + 1.00 pts (0.06%), to 1,747.17, and the Russell 2000 fell 4.57 (1%) to end the session at. 479.68 Savvy market observers note that investors are rotating money out of industries they sent sharply higher this Spring; financials, tech and energy, as they move into health care and consumer staples. Shares in the healthcare and consumer staples sectors helped boost indexes as stocks such as Johnson & Johnson (JNJ.N) and Merck & Co (MRK.N), both up around 1.5% on the day, helped push the DJIA into the Green late in the session. The price of the benchmark 10 yr T-Note jumped a point following the successful bond auction pushing its yield down to 3.31% from 3.46% late Tuesday, marking the lowest level for the 10-year yield since May 20. The US$ mostly rose against other major currencies, Gold prices fell, Crude Oil prices also fell for a 6th day running dropping US$2.79 to settle at US$60.14 bbl, off from an eight-month high of US$73 in one week’s trade. Volume and Breadth: trading was moderate on the NYSE, with about 1.44B/shrs changing hands below last year's estimated daily average of 1.49B/shrs, and on the NAS about 2.52B/shrs traded, above last year's daily average of 2.28 B/shrs. Declining stocks outnumbered advancers on the NYSE and the NAS by around two to one. Overseas, Britain's FTSE 100 index fell 1.1%, Germany's DAX lost 0.6%, France’s CAC-40 fell 1.3% and. Japan's Nikkei stock average fell 2.4%. Stock to Watch Today California Pizza Kitchen (CPKI), ConocoPhillips (COP), DryShips, Inc. (DRYS), Johnson & Johnson (JNJ), Pepsi Bottling Group Inc. (PBG) and United States Steel Corporation (X).
California Pizza Kitchen Inc. (CPKI) Up-date 1 July 9, 2009 Paul A. Ebeling, Jr. Analyst Today let’s look at California Pizza Kitchen (CPKI), the Company that put a West Coast twist on the old favorite, Pizza, from a Technical POV. The overall indications, after Wednesday’s (April 8, 2009) market action, are Neutral; in the near term Neutral, mid-term Neutral, and long term Neutral. Recent Candle Stick analysis is: Very Bullish
**Chart by: http://www.stockta.com
Latest News: California Pizza Kitchen boosts Q-2 profit estimate http://finance.yahoo.com/news/California-Pizza-Kitchen-apf-1711748490.html?x=0&.v=1 Wednesday’s Market Action Close 13.73
There is a Grave Stone Doji on July 7 and no Gaps open up or down on the chart, the near term resistance is 14.37, support at 13.41, and the 50 day (EMA) exponential moving average is13.50. This is California Pizza Kitchen (CPKI): CPK puts a West Coast twist on an old favorite, Pizza. The company operates a chain of more than 250 casual-dining restaurants in more than 30 states and 10 other countries offering pizzas with a variety of unique topping combinations, including duck, barbecued chicken, and grilled shrimp. It also serves Neapolitan pizzas from Italy, as well as American-style pies. CPK rounds out its menu with pastas, soups, salads, and desserts. The company owns more than 200 of its locations, while the rest are franchised. In addition to its full-service establishments, CPK has about 20 quick-service kiosk locations. The company also markets a line of frozen pizzas with through Kraft Foods. Competitive Landscape Demographics, consumer tastes, and personal income drive demand. The profitability of individual companies can vary: while QSRs rely on efficient operations and high volume sales, FSRs rely on highmargin items and effective marketing. Large companies have advantages in purchasing, finance, and marketing. Small companies can offer superior food or service. The industry is highly labor-intensive: annual revenue per worker is between US$40,000 and US$45,000. Restaurants Industry Forecast The output of US eating and drinking places is forecast to grow at an annual compounded rate of 2% between 2008 and 2013. Data Sourced: December 2008 California Pizza Kitchen Inc. (HQ) Co-Chairman, Co-Chief Exec. Officer and Co-President: Larry S. Flax Co-Chairman, Co-Chief Exec. Officer and Co-President: Richard L. Rosenfield 6053 West Century Boulevard 11th Floor Los Angeles, CA 90045-6438 United States Phone: 310-342-5000 Fax: 310-342-4743 http://www.cpk.com
ConocoPhillips (COP) Up-date 11 July 9, 2009 Paul A. Ebeling, Jr. Analyst Today, let’s look at ConocoPhillips (COP), the # 3 integrated oil and gas company in the USA, from a Technical POV. The overall indications, after Wednesday’s (July 8, 2009) market action, are Bearish: in the near term Very Bearish, mid-term Bearish, and long term Bearish. The Recent Candle Stick Analysis is: Neutral.
**Chart by: http://www.stockta.com
Latest News: ConocoPhillips, Comcast: Money Flow Leaders (COP, CMCSA) http://online.wsj.com/article/SB124707049670512491.html?ru=yahoo#mod=yahoo_hs Wednesday’s Market Action Close 39.44
There is a Homing Pigeon on July 1 and six Gapâ€™s open down between Jan 29 and July 6, 2009 at 49.22/40.89, the near term resistance is 40.91, support at 38.25, and the 50 day (EMA) exponential moving average is 42.77. This is ConocoPhillips: This integrated oil industry giant was formed by the merger of Conoco and Phillips Petroleum, ConocoPhillips is the #3 integrated oil and gas company in the US, behind Exxon and Chevron, and consolidated that position by buying Burlington Resources for a reported US$35B. The company explores for crude oil and gas in more than 30 countries and has estimated proved reserves of 11.2 billion bbls of crude oil and equivalent, excluding its Syncrude, Canadian oil sands assets. COP has a refining capacity of more than 2.7MM bbls per day and sells gasoline and petroleum products at 8,750 retail outlets in the USA under the 76, Conoco, and Phillips 66 brands. Other operations include chemicals, gas gathering, fuels technology, and power generation. The Competitive Landscape Consumer and commercial driving trends drive demand. The profitability of individual stores depends on competitive pricing, effective merchandising, and the ability to secure high-traffic locations. Large companies have advantages in purchasing and finance. Small companies can compete effectively by acquiring superior locations or offering specialized merchandise or services. Average annual revenue per worker is about US$500,000 for gas station/c-store combinations and US$150,000 for c-stores without gas.
ConocoPhillips (HQ) Chairman and CEO James J. (Jim) Mulva 600 N. Dairy Ashford Rd. Houston, TX 77079 United States Phone: 281-293-1000
http://www.conocophillips.com ConocoPhillips Subsidiaries
CFJ Properties Chevron Phillips Chemical Company LLC ConocoPhillips Alaska, Inc.
DryShips, Inc. (DRYS) Up-date 9 July 9, 2009 Paul A. Ebeling, Jr. Analyst Today, let’s have a look at DryShips, Inc. (DRYS), the international bulk sea carrier, from a Technical POV. The overall indications, after Wednesday’s (June 8, 2009) market action is Bearish: in the near term Bearish, mid-term Bearish, and long term Bearish. Recent Candle Stick analysis is: Very Bullish
**Chart by: http://www.stockta.com
Latest News: Dry Ships up graded by Credit Suisse. http://finance.yahoo.com/q/ud?s=DRYS Wednesday’s Market Action Close 5.20
There is a DOJI on July 8, and six Gaps open down between Jan 22, and July 8, 2009 at 13.16/5.26, the near term resistance is 5.79, support at 4.64, and the 50 day (EMA) exponential moving average is 6.38. This is DryShips Inc. (DRYS): DryShips commands a fleet of 40 dry bulk carriers. The company's vessels carry commodities such as coal, iron ore, and grain, as well as bauxite, fertilizers, and steel products. The fleet, which is made up mainly of Panamax vessels but also includes Capesize and Supramax units, has an overall capacity of more than 3.1MM deadweight tons (DWT). Vessels are chartered to shipping companies largely on the spot market, but also on long-term contracts. In addition to its dry bulk operations, Dry Ships is engaged in the offshore drilling business. The Competitive Landscape Demand is driven by macroeconomic trends in global imports and exports. The profitability of individual companies depends on efficient operations and a good safety record. Large companies have advantages in fleet size and port access. Small companies can compete effectively by chartering services out of smaller ports and transporting unusual cargo. Average annual revenue per worker for a typical company is nearly US$500,000. Deep Sea Shipping Industry Forecast The output of US water transportation, which includes deep sea shipping, is forecast to grow at an annual compounded rate of 7.4 % between 2008 and 2013. DryShips Inc. (HQ) Chairman, President, CEO, and Interim CFO George Economou
80 Kifissias Ave., Maroussi 15125 Athens, Greece Phone: +30-210-809-0570 http://www.dryships.com
Johnson & Johnson (JNJ) Up-date 3 June 9, 2009 Paul A. Ebeling, Jr. Analyst Let’s look at Johnson & Johnson (JNJ), the US diversified healthcare Giant, from a Technical POV. The overall analysis after Wednesday’s (July 8, 2009) market action is Neutral: in the near term Neutral, midterm Neutral, and long term Very Bullish. Recent Candle Stick analysis is: Very Bearish
**Chart by: http://www.stockta.com
Latest News: J&J Acts Fast on Tylenol http://online.wsj.com/article/SB124709897531615407.html?ru=yahoo#mod=yahoo_hs Wednesday’s Market Action Close 57.08
There is a Bearish Harami on July 7 and two Gaps open up between Apr 30 and May 4, 2009 at 51.09/52.60, the near term resistance is 57.23 support at 56.30, and the 50 day (EMA) exponential moving average is 55.29. This is Johnson & Johnson (JNJ): The Company engages in the research and development, manufacture, and sale of various products in the health care field worldwide. Its Consumer segment provides products used in baby care, skin care, oral care, wound care, and women’s health care fields, as well as nutritional and over-the-counter pharmaceutical products under JOHNSON’S, AVEENO, CLEAN & CLEAR, NEUTROGENA, RoC, LUBRIDERM, LISTERINE, REACH, CAREFREE, STAYFREE, SPLENDA, TYLENOL, SUDAFED, ZYRTEC, MOTRIN IB, and PEPCID AC names. The company’s Pharmaceutical segment offers products in various therapeutic areas, such as anti-infective, antipsychotic, cardiovascular, contraceptive, dermatology, gastrointestinal, hematology, immunology, neurology, oncology, pain management, urology, and virology. Its products include REMICADE, a biologic to treat Crohn’s disease, ankylosing spondylitis, psoriasis, psoriatic arthritis, ulcerative colitis, and used to treat rheumatoid arthritis; TOPAMAX, for adjunctive and monotherapy use in epilepsy, as well as for treating migraines; PROCRIT that stimulates red blood cell production; RISPERDAL oral, a medication to treat the symptoms of schizophrenia, bipolar mania, and irritability associated with autistic behavior in indicated patients; RISPERDAL CONSTA, an injectable, and INVEGATM Extended-Release tablets to treat schizophrenia; LEVAQUIN and FLOXIN, anti-infective products; CONCERTA, a product for treating attention deficit hyperactivity disorder; ACIPHEX/PARIET, a proton pump inhibitor; and DURAGESIC/Fentanyl Transdermal, a treatment for chronic pain. Johnson & Johnson’s Medical Devices and Diagnostics segment offers circulatory disease management, orthopaedic joint reconstruction and spinal care and sports medicine, surgical care and women’s health, minimally invasive surgical, blood glucose monitoring and insulin delivery, and diagnostic products, as well as disposable contact lenses. The company was founded in 1886. Competitive Landscape The industry is marked by rapid advances in scientific knowledge that produce ever-more effective medicines. Profitability is determined mainly by the ability to discover new drugs. The industry is dominated by the large manufacturers/marketers that manufacture drugs, have large research operations, and also have large clinical testing, marketing, and distribution capabilities. Small companies are mainly research operations or manufacturers of non-prescription products. Because of the high value of the product, average revenue per employee is a very high US$600,000. Pharmaceutical Manufacture and Sale Industry Forecast The output of US drug manufacturing is forecast to grow at an annual compounded rate of 8% between 2008 and 2013. Data Sourced: December 2008 Johnson & Johnson (HQ) Chairman, Chief Executive. Officer: William C. Weldon One Johnson & Johnson Plaza New Brunswick, NJ 08933 United States Phone: 732-524-0400 Fax: 732-214-0332 http://www.jnj.com
Johnson & Johnson Subsidiaries Animas Corporation BabyCenter, LLC Centocor, Inc.
Pepsi Bottling Group Inc. (PBG) July 9, 2009 Paul A. Ebeling, Jr. Analyst Today, let’s look at Pepsi Bottling Group Inc. (PBG), the world's #1 manufacturer and distributor of Pepsi-Cola beverages, from a Technical POV. The overall indications, after Wednesday’s (July 8, 2009) market action, are Neutral: in the near term Neutral, mid-term Bullish, and long term Neutral. The recent candlestick analysis is Very Bearish.
**Chart by: http://www.stockta.com
Latest News: Pepsi Bottling's Profit Rises 21% http://online.wsj.com/article/SB124711215179616547.html?ru=yahoo#mod=yahoo_hs Wednesday’s Market Action Close 33.53
There is a Bearish Harami on July 7 and two Gaps open up between Apr 2 and Apr 20, 2009 at 22.60/29.30, the near term resistance is 33.04, support at 33.04, and the 50 day (EMA) exponential moving average is 31.84. This is The Pepsi Bottling Group (PBG): The company is the world's #1 manufacturer and distributor of Pepsi-Cola beverages and has a US market share for Pepsi brands that is close to 40%. PBG operates manufacturing and distribution facilities and delivers its drinks (including Aquafina water, Lipton's Iced Tea, Mountain Dew, Slice, and the world's #2 soft drink, Pepsi-Cola) directly to stores as well as through third-party distributors. The US and Canada account for 75% of company sales. In 2009 PepsiCo offered to acquire the two-thirds of the company it doesn't already own; PBG rejected the US$4B offer. Competitive Landscape Demand for non-alcoholic beverages is driven by consumer tastes and demographics. The profitability of individual companies depends on effective marketing. Large manufacturers have economies of scale in production and distribution, with average annual revenue per production worker close to US$1M. Small companies can compete by producing new products, catering to local tastes, or selling at lower prices. Beverage Manufacture and Bottling Industry Forecast The output of US soft drinks and ice manufacturing is forecast to grow at an annual compounded rate of 2 % between 2008 and 2013. Data Sourced: December 2008 Pepsi Bottling Group Inc. (HQ) Eric J. Foss Chairman, Chief Exec. Officer and Principal Exec. Officer of Bottling Group LLC One Pepsi Way Somers, NY 10589-2201 United States Phone: 914-767-6000 Fax: 914-767-7761 http://www.pbg.com
United States Steel Corporation (X) Up-date 5 July 9, 2009 Paul A. Ebeling, Jr. Analyst Today let’s look at United States Steel Corporation (X), one of the world’s steelmaking leaders, from a Technical POV. The overall indications, after Wednesday’s (July 8, 2009) market action is Neutral: in the near term Bullish, mid-term Neutral, and long term Neutral. The recent Candle Stick Analysis is: Neutral
**Chart by: http://www.stockta.com
Latest News: Wednesday’s Market Action Close 30.50
There is a DOJI and a Gap open up on Apr 9, 2009 at 24.36/24.85 and three Gaps open down between Jun 15 and July 6 at 38.80/33.41, the near term resistance is at 32.14, support at 29.02, and the 50 day exponential moving average is 33.05. This is United States Steel Corporation: Pittsburgh, PA based United States Steel is the US’s #2 integrated steelmaker behind Mittal Steel USA. US Steel operates mills throughout the US Mid-west, Ontario, Canada, and in Serbia and Slovakia. U.S. Steel produces sheet and semi-finished steel, tubular and plate steel, and tin products. Its customers are primarily in the automotive, construction, chemical and steel service center industries. Further, U.S. Steel offers services in mineral resource management, engineering and consulting. In 2007 the company acquired tubular goods maker Lone Star Technologies for US$2.1B and Stelco for US$1.1B. US Steel is ranked #146 in FORTUNE 500. The Competitive Landscape United States Steel's competition in the primary Metals Manufacturing sector is Mittal Steel USA. The industry is highly concentrated and the major companies control 90% of the market. The output of US primary ferrous and non-ferrous metals manufacturing is forecast to increase at an annual compounded rate of 4.4 % between 2008 and 2013.
United States Steel Corporation (HQ) Chairman & CEO John P. Surma Jr. EVP & COO John H. Goodish 600 Grant St. Pittsburgh, PA 15219-2800 United States Phone: 412-433-1121 Fax: 412-433-5733 http://www.ussteel.com
United States Steel Subsidiaries and Affiliates Pro-Tec Coating Company Transtar, Inc. U.S. Steel Canada Inc
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