Friday’s Investors Intelligence featured discount stocks from the auto and auto parts sector. As Editors John Gray and Tarquin Coe wrote, “The autos and parts bullish percentage has collapsed spectacularly since the start of April, unwinding from overbought at 80% all the way down to the present oversold value around 30%. Now is the time to seek and accumulate outperformers, as the sector is likely to soon bounce from oversold.” Here’s one of their recommendations, followed by a sell alert from Global Commodity Investing.
“America’s Car-Mart, Inc. (CRMT) is an outperformer and shows a year-to-date gain of 14.9%. Long-term the stock is in a relative uptrend, as evident on the P&F relative chart.
“A weak general equity market dragged the share down to the bottom of a three-month range at $42. Support looks to have been found there given yesterday’s bounce. The long-term price uptrend looks to be reasserting. New highs are expected and a test of round-number $50 is the most logical target.
“We shall buy CRMT for the Trading Portfolio. Trade would be exited following an end-of-day close beneath last week’s low of $41.60.”
- John Gray & Tarquin Coe, Investors Intelligence, May 25, 2012