Transcript of Video Network Interview: A Commodity Trader's Stock Picks

02/21/2009 1:46 pm EST

Focus:

Thomas Aspray

, Professional Trader & Analyst


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Tickers: CHK, TRA, SBUK, BAC, WFC

ABOUT THE SPEAKER

John Person, president of NationalFutures.com, is a 27-year veteran trader in the futures and options markets and is a registered Commodity Trader Advisor. His book, The Complete Guide to Technical Analysis for the Futures Markets, was the first book to illustrate how to use candlesticks combined with pivot point analysis. Mr. Person's third book, Forex Conquered, reveals three trading systems complete with codes for Genesis and Trade Station users. He is the editor of the weekly Bottom Line newsletter, which covers stock, futures, and currency trades. The nation's most respected business journalists call on him for his market opinions. Mr. Person is widely quoted by CBS MarketWatch, Reuters, Dow Jones, and Bloomberg and he appears regularly on CNBC.

PRESENTATION

Tom Aspray, Editor, MoneyShow.com
We are talking stock today with a commodity trader, John Person. Welcome, John.

John Person, President, NationalFutures.com
Thanks for having me, Tom.

Tom Aspray, Editor, MoneyShow.com
Being a Commodity Trader for 30 years, you know some very interesting correlations between commodities and stocks and you also recommend and trade both. Tell me what you are looking at now?

John Person, President, NationalFutures.com
Well, yes, I do. First off, we have a seasonal tendency for crude oil to rise. I think if energy prices, crude oil specifically, moves up as does, believe it or not, natural gas prices from say about on or the middle of February going into about June. I think that one company that will certainly benefit would be Chesapeake Energy, CHK stock if it can manage to wiggle its way back down around between $12.5 and $14. I think it is a very low risk, high potential. I would be looking for upside targets by June in the $22 to $24 range.

Tom Aspray, Editor, MoneyShow.com
That’s big. What others? How about fertilizer?

John Person, President, NationalFutures.com
Fertilizer, looking for a seasonal play. One stock that I like, but it is already kind of already started its move so to speak is Terra Industries, TRA. That stock to me I think has little bit more upside, but we probably should see that market peak out, probably I'd be a little bit nervous adding to long positions if we are past say May/June.

Tom Aspray, Editor, MoneyShow.com
Okay. Anything in the consumer, discretionary stocks?

John Person, President, NationalFutures.com
Absolutely. I mean one stock that’s been out of favor, but no matter where I go, what part of the world, what part of the country, in the U.S., abroad, there always seems to be lines and consistently, is Starbucks. And it has fallen out of favor with a lot of people, but if you look at a lot of other companies relatively speaking from the peak, Starbucks has some value left in it. I like Starbucks, SBUX. If you can trade between $8 and $9, I think it is a low-risk trade for something within a year-and-a-half, two-year outlook.

Tom Aspray, Editor, MoneyShow.com
Yes, I read somewhere that they are going into the instant coffee business. It is supposingly a $17 billion worldwide business.

John Person, President, NationalFutures.com
That may help something. I personally like the Whole Bean to grind it myself in the morning. But, they have something that -- it is the life blood of all traders and most people from New York to Chicago, you know, traders drink coffee. It is generally Starbucks, so it kicks off our days.

Tom Aspray, Editor, MoneyShow.com
Great. And how about your gamble stocks at the moment?

John Person, President, NationalFutures.com
I do have a couple of gamble stocks, only because I believe as a trader and a commodity trader -- I understand that most people viewed commodity traders as the gamblers of the world. But now, if you look at Wall Street, I think we’ve become more in vogue so to speak. One of my gamble stocks right now is in the banks, believe it or not. I believe Bank of America -- you know, you just got to take a shot down here. And Bank of America, anywhere near to $3 to $4 is, if they don’t go bankrupt, if they don’t become nationalized, that is a stock that possibly just everyone – it may get that in two to five years, if that stock – if it made it back up to $20, can you imagine just saying to yourself, "Why didn’t I get in there?" Fear didn’t let me in. That is an option price at this point. On 100 shares, I wouldn’t buy a call option. I would actually buy the shares or stock in there.

The other stock I like, believe it or not, is Wells Fargo. It took a tremendous hit towards the middle end of February and I think that stock, if it is in the $8, $9 range, that’s an other one that you can certainly look at using approximately timing stop of say 60 days, if you don’t see any performance out of that, or if it starts trading below $5, bail on the trade. I think that most people go with high-flying stocks. You look at Apple; look where Apple, the range it has made. Look at Amazon. We’ve got a lot of differences in our economy in looking at the stock markets. Some of these stocks, the two that I have just mentioned, have actually -- they are up on the year. But, you are seeing wide moves in those, so why not take a gamble at some of the banking stocks down here. There is not a whole lot to lose.

Tom Aspray, Editor, MoneyShow.com
Great. Well, we will keep watching, John. Thank you very much.

John Person, President, NationalFutures.com
Thanks, Tom.

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