In its simplest form, the phrase refers to buying the pullbacks whether it’s in the market indexes or individual stocks — as long as they are at some sort of support level. So let’s take a look at most recent dip and the most recent rip over the last week.

For us, it all starts with the short-term index charts. From there we move into the individual stocks, as three out of four stocks generally trade with the overall trend of the market. Lately, that overall trend has been up, and stock investors have been enjoying gains in a big way. In fact, in the last month alone, the S&P 500 has gained nearly 5% as stocks bolstered by signs of economic recovery took back some of the losses they suffered in 2008.

As you can see, support is clearly defined and the full stochcastics are in oversold territory. Those are your clues to get ready. This tells you that you are “In The Zone” and its time to see if individual stocks are showing this as well. Here’s a recent example in Perfect World (NASDAQ: PWRD):

In just a week, this stock rocketed from $36 to $44. That’s a home run in the world of swing trading, and it’s a gain that any investor could have had a chance at by just buying the dips and selling the rips. All you have to do is follow the formula…

What I want you to notice is what they all have in common:

1. All have been pulling back off highs — The Dip
2. All pulled back to at or near the 50-day moving average (the blue line)
3. All have the full stochastics in oversold territory.

So now, what do you do about it? Well, there are two ways to take these trades.

One is to take them right there at a support level — at or near the 50-day moving average with a 10% stop. The other is to wait for the crossover of the pink line as shown to the upside. The latter is the safer trade, however from the dips lows of the 50-day average or a support level is a lot of room that would be missed by waiting for that to occur. This really means that you are paying up for the stock by waiting for the pink line trigger.

Sincerely,
David Grandey

Source: Deciphering this Trader’s Simple Profit System

If you want to invest in video games there are, essentially, four ways to do it…

• Investing in video game publishers.
• Investing in video game retailers.
• Investing in companies that make video game consoles.
• Investing in companies that make video game accessories.

Game Publishers

These are the companies that make the games. And Electronic Arts Inc. (NASDAQ:ERTS) and Activision Blizzard (NASDAQ:ATVI) are the best bets right now.

Electronic Arts is the publisher of the popular Madden franchise, which gives it a consistent intake every year. Adding to its arsenal with a game like Spore will no doubt boost its bottom line even further.

Activision Blizzard is another strong contender. Guitar Hero has proven extremely popular, as has World of Warcraft. And while the new Call of Duty probably won’t sell as well as its hugely successful predecessor, Call of Duty 4, it will no doubt turn a respectable profit.

Avoid THQ Inc. (NASDAQ:THQI), which seems to have forgotten what games are and Take-Two Interactive (NASDAQ:TTWO), which is overly reliant on its controversial Grand Theft Auto series. Take-Two also had a good opportunity to be taken over by the much larger Elecrtonic Arts, but a deal never got done, which raises questions about the company’s management.

Accessories

As the unrivaled success of the Wii showed, innovation in video game accessories can pay off. For every console, as well as the PC, there are multiple games that can be enhanced by the use of a new input medium.

Games such as Guitar Hero, a game where you use a guitar shaped controller to play along with music, Flight Simulator X – the premiere flight simulator game is greatly enhanced by the use of a joystick, and the Dance Dance Revolution series, which features games that are best played with a dance pad, are always emerging on the market.

While, most of the accessories are made by the company of the game that requires them, there are external controllers that are always there competing for the market. Some companies that make these include MadCatz Interactive Inc. (AMEX:MCZ), a peripheral company specializing in mainly console accessories and Logitech International (NASDAQ:LOGI) a Swiss company that specializes in mostly in PC peripherals.

Retailers

While many electronics stores and retailers sell video games, there are some specifically designed to do so. The biggest of these in the world is GameStop Corp. (NYSE:GME). GameStop stocks new, used and old games, as well as multiple accessories and consoles. The largest video game retailer in Europe is GAME Group PLC (London:GMG). They operate similarly to GameStop.

Consoles

More than $9 billion was spent on video game consoles last year. Nintendo, Microsoft, and Sony all have new systems on the market, and they’ve all proved formidable.

[...] All of these companies are reasonably solid investments, but, in terms of gaming, Sony Corp. (NYSE:SNE) and Nintendo Co. (Pink Sheets:NTDOY) look like they are going to have some very good years.

Sony has got an amazing games division that is producing very high quality games for its console.  And Nintendo is always going to be in demand, though it needs to start making more games for the Wii and DS.

Microsoft Corp. (NASDAQ: MSFT), on the other hand, needs to acquire more exclusives, plus this report has nothing to do with the upcoming Windows 7, which is the biggest part of Microsoft’s business.

Hon Hai Precision Industry Co.

Hon Hai Precision Industry Co. (OTC: FXCNF) is a technology company based in Taiwan. It manufactures the Mac mini, the iPhone and the iPod for Apple Inc. (AAPL), cell phones for Nokia Corp. (NOK), and motherboards for Intel Corp. (INTC).

Of course, it also manufactures PS2, PS3, Xbox 360, and Wii – the four most popular gaming consoles – making it a tremendous play on the video game industry.

Emerging Markets: The Future of the Gaming Industry

The Middle East, China, India, Africa, and South America all have extreme pirating problems where video games are concerned. Thus, most companies have trouble expanding into these markets.

The Chinese market is a rapidly growing area for video games. However, the video games that the Chinese are enjoying are not what the West is enjoying. Chinese consumers love MMORPGs. While an average Western MMORPG, like Everquest for example, will reach 500,000 users. An AVERAGE Chinese MMORPG will attract well over 1,000,000 users very quickly.

Of World of Warcraft’s 10 million subscribers, 1.5 million live in China. Analysts estimate that the WoW Chinese market, alone, could eventually have 10 million users.

Most Chinese play MMORPGs in internet cafés (since most of them have limited Internet access). A large percentage of Chinese, however, do play free MMORPG’s. Free MMORPGs usually are completely free to play, but players can pay money to expand the gaming experience (bigger map to play on, more areas etc.) or improve their character (items, weapons character stats, etc.). While this doesn’t seem to like it would make a lot of money, it actually does, thanks to the addictive nature of most MMORPGs.

Some of the bigger names in the Chinese MMORPG market are Giant Interactive Group Inc. (NYSE:GA), Perfect World Co. Ltd. (Nasdaq:PWRD), Shanda Interactive Entertainment Ltd. (Nasdaq:SNDA), and The9 Ltd. (Nasdaq:NCTY).

Unfortunately, China is China. As such, the government always thinks of something ‘imaginative’ to do with the gaming market. The ‘Fatigue System’ is a means by which the government gets to control how long its citizens spend online playing games.

This system requests that games stop rewarding players after three hours of play in one day. Additionally, the system also requests an ID for players so as to be able to control their play more easily. While the system was originally meant for all gamers, it has been limited to gamers under the age of 18, due to the initial outcry it garnered.

China is also notorious for having the largest game sweatshop industry in the world. A game sweatshop is where a person is paid to play a game intensively and to make an extremely good character in it. That character is then sold to whomever wants it.

Chinese censorship is surprisingly low as the government only censors games that are anti-Chinese or portray Tibet and Taiwan as independent nations.

India’s market has yet to fully realize the potential of video games (putting the pirating aside). India is regularly compared to China in 2001. The online video games market is picking up but the overall market is still small. The few Indians who do game, do so like the Chinese: in Internet cafés. Unfortunately, there aren’t any enormous MMORPG makers (or equivalents) in India, yet.

The Middle East is generally also a pirating heaven though there are some legitimate shops usually selling games that haven’t been translated. Countries like Saudi Arabia also tend to ban certain games that are conceived as anti-Muslim.

If you wanted to invest in one of the Chinese MMORPG makers, the one that looks the best thanks to its pricing model and quality of games is Giant Interactive.

PS. This is an excerpt from a three-part guide to investing in the video game industry. For the complete version, please go to Money Morning’s archive pages.

Source: The Investor’s Guide to The Video Game Industry – Page 2

Godzilla-Sized Meals Could Lead to ‘Super-Sized’ Profits

By Keith Fitz-Gerald

Japanese companies and local governments must now measure the waistlines of all employees and family members over the age of 40.

According to this new health-care initiative – which started this week – men whose girth exceeds 33.5 inches and women whose waistlines exceed 35.5 inches are considered overweight.

The new guidelines affect nearly 56 million people, or roughly 44% of Japan’s total population. They’re based on studies done by the International Diabetes Foundation in 2005, which looked at size and weight thresholds and used them to identify health risks.

Individuals who fail to meet these standards won’t be penalized or have to pay up personally. But their employers will – in the form of penalty payments and higher health-care premiums for every additional inch – thanks to this new waistline law that’s aimed at slimming down this island superpower.

As reported on CNN, NEC Corp. alone faces $19 million in such penalties. Other companies find themselves in a similar spot and could potentially owe hundreds of millions of dollars in punitive health-care fines.

Naturally, the law is controversial, with many believing that it’s at the very least unnecessary – and perhaps even represents an intrusion on a person’s individual liberties. However, others think it’s a very timely initiative, as well as one that’s badly needed.

Either way, the Ministry of Health aims to achieve its goal of reducing the Japanese overweight population by 10% in the next four years and an enviable 25% during the next seven years. It also intends to dramatically reduce national health-care costs at the same time.

The reason?

“Big” people have never populated the nation – but the people are getting bigger.

Since World War II, the average Japanese citizen has gained between three and six inches in height, 20 pounds in weight and, evidently, a bit too much around the waist. While the root causes are subject to debate, much of it comes down to more advanced medicine, changes in lifestyle and, to be perfectly blunt, and the introduction of Western foods including – you guessed it – fast food.

For years in Japan’s company cafeterias – long the domain of harried salary men eating quickly in order to get back their desks – a typical Japanese meal consisted of fish, pickles, some rice, and perhaps green tea, a accounts for between 600 and 800 calories. But Western alternatives – a McDonald’s Corp. (MCD) hamburger meal, for example – can tip the scale at nearly 1,400 calories.

With change, however, comes opportunity.Companies that design, manufacture and sell comprehensive obesity-management programs – not just games, or such one-off items as pedometers, scales and the like -stand to make out big.

One such firm is Konami Corp. (ADR: KNM), which we twice rode to profits (once 49.91% and then 39.31%) earlier this year in our sister publication, The Money Map Report. While most people know Konami as a video-game maker, the company actually operates a string of health-care clubs and is at the center of Japan’s new “healthy” movement.

Showing some real forward thinking, Konami has been able to market some of its leading games, like Dance Dance Revolution, as physical-education programs and medical devices. And those products are now being adopted worldwide by frazzled physical education teachers who find themselves faced with unmotivated, overweight kids. The problem is particularly acute here in America, where as many as 17% of our children are now obese, according to various studies.

Not only do such games offer an alternative to traditional exercises, but they’re also approved medical devices. And that means that school systems can introduce them – and count on insurance companies footing some, or all, of the bill.

Nintendo Co. Ltd.’s (OTC ADR: NTDOY) Wii is taking the same approach. With its Wii Fit programs, the company appears ready to duke it out in what may well be a newly emerging class of entertainment – video-weight-management programs.

In China, where Yum! Brands Inc. (YUM) has more than 3,000 restaurants – and where its KFC outlets are the dining venue of choice for many middle class Chinese consumers – we expect a similar onset of obesity. In fact, during my most recent trip there, I observed bigger Chinese in general than I’ve ever seen before.

Weight management is clearly becoming an issue there, too. And mark my words: Obesity will be an ultra-sensitive topic for the Chinese, who have long regarded fatness as a sign of prosperity, wealth and good fortune.

But that neither diminishes its potential impact nor the opportunity when it comes to profiting from the fight against obesity.

While it’s too early to predict choices there, our best guess is that companies like online-game developer Perfect World Co. Ltd. (ADR: PWRD) will adapt the single-player concept to reflect the Chinese predisposition toward massive multiplayer online adaptations. As a result, it will introduce new games that haven’t even been contemplated, yet.

Source: Godzilla-Sized Meals Could Lead to ‘Super-Sized’ Profits