Tuesday, August 4, 2009

Synthesizing information

Yesterday was a relatively slow day, although it presented a unique opportunity in specific names. One of these was OSK: In the morning, as I was preparing for the open and going through my daily routine, I came across the headline "Oshkosh wins second $1B military order."
Now this alone is not significant for me. As a short term trader, who is not focused on an industry or purely fundamental analysis, I do not know what are the ramifications of this order are for OSK. However when I went to research the firm and noticed that their market cap was 2.3 billion, then it became significant. An order for roughly 40% of the company's market cap? Sounds to me like a stock that may be in play.
After the open and as the market made a modest pullback to 889 in the S&P futures, OSK made a base and began extending. It went on to have a nice run of approximately $2.

The key is that the news of the order brings our attention to the stock, but it's the price action and OSK's relative strength to the market, that leads us to get involved.

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