10 For 2013

Welcome back! Its a new year and its time to begin setting out our plan for 2013. At the end of every year its a good idea to look back at what we have learned from the past year and what we hope to improve on in the coming year. Since we have just begun we don't have much to go on from last year, so we will just jump into how we want to plan for 2013. First and foremost, I want to say that this is not a recommendation to buy or sell any of these stocks or in any way guarantees their future success. But we do like to look around the markets for possible opportunities and take advantage of good risk/rewards that come our way.

This will be the beginning of building a watch list of notable stocks we would like to follow for the year; some of these may do well, some may do poorly and others may likely not do much at all. With these 10 stocks I would like you to take some time within the price charts and see if and where you would consider buying them. And thus begins the introduction to supply and demand.

-Demand occurs when the buyer feels that the price of an object is a bargain vs. its true value.
-Supply occurs when potential buyers feel that the price for an object becomes too expensive relative to its actual value and decide not to buy.

What then happens during each of these instances is that when buyers feel like they are getting a good deal on the merchandise, they buy some. As more and more do the same and the availability of the product becomes less, potential buyers will be willing to pay more than they did previously and prices go up.
The opposite it true on the other end of the spectrum, when prices go up to a certain point the new buyers lose interest and move onto the next deal. What then happens is that the price for the original product begins to decline until a fair price is decided upon where the buyers regain their interest. This is how the stock market works in a nut shell. Traders are constantly speculating on the future values of stocks and deciding if the value is a good deal or if it is overpriced; thus we get what is called support and resistance for price.

Support and resistance is just Wall Street gibberish for supply and demand (the other way around actually).
Support = Demand
Resistance = Supply

How it works within the markets is that there are prices for a stock that act as a floor or supporting area and higher prices that act as a ceiling or place new buyers are resistant to buy. The support area for a stock is a lower price that many have decided is a good deal for the stock's company value, and they buy it there. The resistance area is a higher price that new buyers have decided is overvalued for the company it represents and don't wish to buy. As you can guess when buyers are interested in a price and buy, the stock goes up.  When they are not interested in a current price, they don't and the stock goes down. Therefore support levels are good areas to buy a stock and resistance levels are good places to sell a stock.

We will get into more concepts that involve support and resistance levels in later lessons, but I just wanted to give you something to think about when looking at these 10 stocks. I want you to look at the charts, preferably going back 1 year. Try to identify where the price seems to stabilize and where price seems to fail.; these will be your support and resistance areas. Your plan will be to buy stocks at support levels and sell them at resistance levels.

Without further ado here are my top 10 stocks to watch in the new year:

1. Hain Celestial (HAIN)- Organic foods producer
2. Apple (AAPL)-  If you don't know what this one is then I will have trouble helping you ; )
3. Mosaic (MOS)- Fertilizer and Potash producer
4. Home Depot (HD)- Home Improvement stores
5. Cummins Engines (CMI)- Industrial Engine producer
6. Ford Motor Co. (F)- Auto Maker
7. Wells Fargo Bank (WFC)- Banking
8. 3d Systems (DDD)- 3d Printing manufacturer
9. Enbridge (ENB)- Canadian Oil Pipeline builder
10. Renewable Energy Fund (PRW)- Fund containing 51 energy efficient companies


Well, that's my list as of the beginning of 2013. I could go into great detail as to why I feel the way I do about each stock, but I will spare you the reading for a future post. For now take a look at each of these stocks (the ticker symbols are in parenthesis) and try to get some idea for how the stock seems to be moving (higher or lower). Next try to identify the main support area and resistance area for each stock; I will post over the course of the next week about each one and show you my support and resistance areas.

Welcome aboard! This will mark the beginning of your journey to successfully managing financial markets.

For further reading on support and resistance (Highly advised!) check out Investopedia.com and search "support and resistance"