Tuesday, July 24, 2007

More Choppy Trading

We seem to be falling into a pattern here. Down 100, up 100. One day the market is driven by solid earnings and a big M&A deal. Next day it is weak earnings and subprime fear. It is going to take a bigger piece of news or event to shake us out of this range.

It appears to be a good call to exit the positions in oil refiners. Both have traded down substantially in the past few days. Oil stocks are not responding as well to higher crude prices as they have been in previous months. Something appears to be a little funny there.

I've followed Textron (TXT) for quite some time now. They are a conglomerate with a nice mix of businesses, including golf carts and a financial wing. But most importantly, they have Bell Helicopter and Cessna. The big demand for helicopters from the military and private jets for corporations is working well for Textron. They just reported a great quarter, and I'm going to use a little weakness in today's trading to pick up some shares. I typically am not a big fan of conglomerates just because you usually buy them for one of their businesses which is hot, and other parts can cause earnings to lag. In this case, I like their growth prospects.

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