Weekly Market Overview
The market began the week with a move to the downside today as failed deals and Fed uncertainties put a drag on stock prices. Specifically, news of Nasdaq's abandonment of a deal with the LSE along with reports that Sanofi-Aventis has ended merger talks with Bristol-Myers Squibb dampened the usual merger Monday news. The Federal Reserve  is scheduled to release several key figures as traders will pay close attention to Chairman Ben Bernanke's rhetoric during his testimony before Congress later this week. Many are expecting to see some consolidation after several weeks of strong moves to the upside.


Top 10 Stocks to Watch this Week
Fundamental Analysis
Our top five stocks to watch for fundamental investors are:

1. Cost-U-Less, Inc. (CULS) - There are two hedge funds currently involved with this stock, both calling for the company to put itself up for sale. One of the hedge funds has even said it would make an offer. If the two hedge funds are successful in lobbying management, the company should sell for at least $12 per share - a 40% gain. (More CULS articles...)
   
2. Temple Inland Inc. (TIN) - Carl Icahn said that this company is being held back due to its conglomorate structure. Consequently, he recommended that the company be broken up and its different division spun off into new companies. This presents a great spin off opportunity led by one of the best activist investors of our time. (More TIN articles...)
   
3. Ceridian Corporation (CEN) - Bill Ackman propposed that Ceridian spin off its Comdata division since the two share almost no synergies. Moreover, he said that the segment was being held back by the parent company. This is another great spin off opportunity that would help both the parent company and the child company... and Bill Ackman definitely knows what he is doing! (More CEN articles...)
   
4. Applebees International Inc. (APPB) - The Breeden Partners recently filed a series of Schedule 13Ds suggesting that the company improve several defficiencies, including its excessive executive compensation. If these issues are appropriately addressed, it could help the company save millions and increase their share price significantly. (More APPB articles...)
   
5. Electro Scientific Industries (ESIO) - Nierenberg Investment Management first lobbied this company to take several actions to return shareholder value. Since then, they have been joined by another hedge fund. Combined, these two should have enough leverage to at least warrant a response by management. If they are successful, it could mean special dividends or other measures aimed at unlocking value. (More ESIO articles...)
   

Technical Analysis
Our top five stocks to watch for technical analysts are:

1. Palm, Inc. (PALM) - Charts show a diamond bottom, which is an intermediate term bullish pattern.
   
2. Visteon Corporation (VC) - Charts show a symmetrical triangle, intermediate term bullish pattern.
   
3. W&T Offshore, Inc. (WTI) - Charts show a head and shoulders bottom, intermediate term bullish pattern.
   
4. Chico's FAS, Inc. (CHS) - Charts show a bottom triangle, long term bullish pattern.
   
5. AngloGold Ashanti Limited (AU) - Charts show an ascending continuation triangle, intermediate term bullish pattern.
   

Stock of the Week : Cost-U-Less Inc. (CULS)
We believe that this company presents great opportunities for investors to profit over the next year. Two hedge funds are actively engaged in forcing the company up for sale with one of them expressing interest in making a bid of their own. CULS currently trades at roughly 3.5x EBITDA with its peers trading at around 16x EBITDA, which values CULS at roughly $12 per share at the low end of the spectrum. With the company’s annual meeting coming up soon, look for these hedge funds to take a more active stance in their investment and unlock value for shareholders. Specifically, watch for future Schedule 13D or 14A Proxy filings made by hedge funds, which may contain letters to management, additional demands, or proxy materials in the event of a proxy battle.

Read More on SECInvestor.com…


Filing of the Week : Form 4
Many investors have heard of the Form 4 filing - it lets us know when an insider has made a stock transaction and gives us all the details. However, many investors do not know how to properly read these filings. Even if an insider is acquiring stock (code A), it is not necessarily a positive sign. After all, "insider buying" is reported every time an insider receives free stock options from the company... nobody would turn those down, even if the company was doing poorly! The key thing to look for when watching Form 4 filings if the P-code, which means that the insider financed the stock purchase with his own cash. Typically, P-codes where the insider is purchasing a large dollar volume is a positive indicator for that company.

You can easily track these SEC filings with e-mail and RSS alerts using SECFilings.com!


Tip of the Week : Trailing Stop Losses
Many brokers are now offering more flexible ways for investors to manage their investments in order to attract more capital. One of these newer innovations is what is known as a "trailing stop loss". Normal stop losses give you the ability to put in a price below the current market price in which you'd like to automatically sell the stock. This is often used as a "fail-safe" in case the company experiences a sudden drop. Trailing stop losses enable you to place a stop loss that moves up along with your stock position. This allows you to have a "fail-safe" in place that can also help you lock in profits automatically. Many technical traders use this in breakout situations. Once a stock breaks out, they will set a trailing stop 8% below the day's opening price and let it ride. This way they can benefit from all the upside while protecting their profits automatically for any downside! This is definitely an excellent new tool to check out if it is available to you!


Final Words
This week promises to be an interesting one as the market decides which direction it would like to move. Be cautious when investing in this market, as it has moved up a lot without a significant retracement. It is likely that many investors will take profits off the table on any major sign of weakness, which could move the market down even further. Good luck trading!