FCNTX, the Fidelity Contrafund Mutual Fund, is getting some press.

Fidelity Investments has been deeply wounded by the bear market, but it retains one big edge over everybody else: Will Danoff.

Danoff is to the 21st century Fidelity what Edward C. Johnson III and Peter Lynch were to the organization in the 20th century: master portfolio managers, sui generis, brand names who showered riches on their investors.

Danoff’s Fidelity Contrafund (FCNTX) shot up 17% in the year ended June 30, and that was less than its average return in each of the two prior years. Despite being the largest actively managed equity fund guided by a single individual, with $64.9 billion in assets, it behaves more like a sprite than a behemoth.

Does anyone have any connection on how to get into the Contrafund?

TRE, Tanzanian Royalty Exploration Corp., is forming a symmetrical triangle stock chart pattern.

Keep it on your watchlist for a breakdown and breakout, whichever one happens.

Here is the stock chart for EXPD, Expeditors International of Washington Inc.

EXPD has broken down at a weak support. EXPD is in an overall downtrend right now, so this breakdown can be interpreted as a stock short sell signal.

UPDATE: Down it goes!

Generally speaking, a futures contract represents an agreement to buy (or sell) a commodity at a pre-defined price on a pre-defined date.

Commonly, futures are available in these following flavours: (These flavours are defined by the underlying “cash” product)

Stock Index Futures – One can’t really buy an index, so, these are settled in cash using some kind of correlation.
Commodity Futures – Taking as an example the Gold futures contract, it gives you the right to buy or sell a quantity of Gold at a pre-defined price in the future.
Interest Rate Futures (These include Bill Futures, Deposit Futures, and Government Bond Futures) – As well as others, they are typically settled in cash.

Future contracts were created to allow people that want more risk to take it from people that want less. Technically it’s called risk transfer.

How is this done? Well, using several features like:
* Liquidity
* Leverage (a smaller amount of money is deposited as a margin for a larger amount of money)
* High correlation degree between the changes in the underlying instrument and the changes in the futures price. Usually this is ensured with the mechanism of basis trading. In the commodity futures case, if one sells a commodity future he’s promising to deliver “N” amount of this commodity at a certain price (now fixed) at a pre-defined date.

All this means that if the futures price becomes too high in relation to the price of the commodity these days, you can borrow money and buy the commodity just now, and then sell a futures contract for it (on margin). If the difference in price between the two is big enough, then you’ll be able to pay the loan and the interest and still have some risk less profit. Pure arbitrage I should say.

On the other hand, if the futures price falls far below from the commodity price, then you can short-sell the commodity and buy the future.

You can borrow the commodity until the date of delivery for the future (bonds are a good example of this borrowing), and then cover your short position when taking deliverance of some of the commodity at the predefined date.

Both these two arbitrage trades are well known as “basis trades”, because you are trading the “basis” between the futures contract and the underlying “cash product”.

Futures are derivative products and should only be used by well experienced traders.

EVT is setting up for a test of a support after breaking out from a consolidatory price range.

The overall stock chart looks pretty strong. I want to see if buyers will rush in with buy orders at the support. If so, that will be a bullish signal.

The Top 10 Stocks are out from Yahoo Finance. I love this stuff.

Western Refining (WNR)
Composite Rating: 99.*The independent crude oil refiner is scheduled to report second-quarter results on August 8. It went public in January at $16. 3-Year EPS Growth Rate: 120%.

Alon USA Energy (ALJ)
Composite Rating: 99. An industry group peer of Western Refining, the company will report second-quarter earnings on August 7. Annual return on equity in 2005 was a whopping 46.6%. 3-Year EPS Growth Rate: 123%.

Digital River (DRIV)
Composite Rating: 98. The maker of e-commerce software recently reported a 41% surge in second-quarter profit and 39% jump in sales to $71.3 million. Analysts see full-year earnings rising 30% in 2006 and 20% in 2007. 3-Year EPS Growth Rate: 44%.

Chaparral Steel (CHAP)
Composite Rating: 98. The Texas-based maker of steel beams is up 127% year-to-date compared to a 53% gain for its industry group – Steel-Producers. The company recently reported a 258% surge in fiscal fourth-quarter profit. Analysts see first-quarter profit jumping 170% to $2.08 a share. 3-Year EPS Growth Rate: 75%.

World Fuel Services (INT)
Composite Rating: 97. One of many leaders in IBD’s Oil & Gas-Field Services group, the company will report second-quarter earnings on August 9. Analysts see profit rising 28% to 51 cents a share. Annual earnings are expected to rise 27% in 2006 and 24% in 2007. 3-Year EPS Growth Rate: 29%.

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AKAM, Akamai Technologies Inc, showed up on my breakout scan.

AKAM has broken out of a consolidation phase. This signals that the uptrend should continue. I have no idea what AKAM does, but their chart looks pretty good, so keep it on your stock picks watchlist.

Here are the winners of The Bull Trader Stock Book Giveaway!

• Winner of Welcome to My Trading Room: Chris L (Minneapolis, MN)
• Winner of Getting Started in Chart Patterns: Paul T (Mishawaka, IN)
• Winner of UCLA Trader Stock Picks Newsletter: Manohar R (Dallas, TX)
• Winner of FallondPicks Stock Picks Subscription: James O (Fremont, CA)
• Winner of Stock Insight Subscripiton: Brian K (Wilmington, DE)
• Winners of High Chart Patterns Stock Picks Newsletter: Jeff K (Chicago, IL); Dave A (Danville, CA); Nathan L (Westhope, ND)

Thanks everyone for joining the giveaway. In total, we had over 188 entires! I hope to talk to some companies to get some more sponsors for the next stock trading book giveaway.

One of the latest types of investments is the Exchange Traded Fund, aka the ETF. This fund is a mix of a stock and index fund, but is used for investment in a specific market.

ETFs are treated and traded like all other stock on the stock exchange although they exhibit performances of a specific index. ETFs are usually bought through a broker, while dividends are given to stock holders. The only difference between ETFs and stocks are that they are fixed portfolio of securities mirroring a particular index. The S&P 500 Index Fund is the first exchange traded fund which began its trading on the American Stock Exchange in 1993.

ETFs can be bought individually, for a short term and on a margin. The commission for ETFs is the same as on any regular trade. The ETF can be easily bought from a broker, and is a great means of diversification. It provides diversification because many stocks and bonds in an ETF. When buying ETFs, it is always better to avoid investing ETFs that invest in similar stocks.

Today, there are more than one hundred exchange traded funds around. These ETFs cover the broadest market index like S&P 500. The main benefit of an ETF is the tax efficiency it offers. This is because since the shares of ETFs don’t have to be distributed every year, you owe tax only when you sell ETF shares. However, since ETFS sometimes make capital-gains and dividend distributions, it is necessary to pay some tax.

One of the main benefits of having an ETF in the portfolio is that it creates a varied investment portfolio. The ETF along with US stocks, bonds, and other foreign stocks provide a portfolio that presents a superior return on investments, with limited risk. Just as much that ETFs prove beneficial to a portfolio, there are also a few drawbacks to it. The main drawback is that you have to buy ETFs through brokers as you would buy stocks. With these brokers, there is a need for paying commissions. This aspect of paying commission makes the buying and selling of ETFs a drawback to a portfolio.

Moreover, this commission makes ETFs an expensive choice for those individuals who would like to invest on a regular basis. This is due to the fact that the commission reduces the returns you would other wise expect from the investment. Buying ETFs from discount brokers may reduce the expenditure you will have to make for your investment.

Apple Computer stock fell $1.29 today after it announced that they would have to delay filing their annual quarterly report. The reason for the delay was a possible discrepancy about how stock options was issued by the company between 1997 and 2001.

AAPL finished the day at just over $68, down 2%. The company also announced today that it would have to delay the filing of its report with the Securities and Exchange commission which may cause stock prices to drop a few more dollars, but stockholders have nothing to worry about.

The technical analysis of the stock shows that AAPL is trading at a historical resistance on the 6-month scale.

Keep an eye on how AAPL reacts (breakout or failure) at this retest of the historical resistance.

There are different types of investment that people can turn to; mutual funds, stock bonds, stocks, real estate, gold and many other options.

One of the best forms of short term investments is treasury-bills. Tbills are basically short term obligations to the government that is issued for terms of one year or less. (more…)

GRMN, Garmin Ltd, is worth a mention because the uptrend has come to an end.

If it breaks down at the current support, GRMN stock could become a short candidate.

CTSH, Cognizant Technology Solutions Corp, showed up on my stock trading breakout scanner. Here is the technical analysis of the stock.

CTSH broke out to new highs today thanks to the tremendous market strength we had today. It is a very clean stock breakout, so keep an eye on it.

ORCL, Oracle Corp, has retraced to a support following an upside breakout.

The stock trading range has treaded lower to fill a gap, and could make for a low-risk entry. Stop loss is a must below the yellow support.

The team at High Chart Patterns, a stock newsletter service, wrote in with tips on trading stock pivot prices.

We wanted to discuss today the various ways you can use our entry prices; numbers which are always representative of an important spot, be it resistance, break of downtrend line, etc, and which often act like magnets for stocks.
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IGR, ING CLARION GLBOBAL REAL ESTATE, showed up on my symmetrical triangle stock trading program.

I like the bull flag breakout that happened in July, and I like the symmetrical breakout that happened today. I'm not sure if this is a real stock or an ETF, but I just like the chart.