One New CANSLIM Swing Long, Three Speculative Longs, and Two Stocks I Am Adding To My Existing Positions.

January 24, 2007

New CANSLIM longs: LAYN

LAYN is breaking out to a new closing high from a base on base pattern, on very strong volume. This chart was a bit choppy but still had a steady uptrend, until that December breakout gap. Since then, the stock has held support of the breakout day and is now breaking out to new closing highs. The heavy accumulation showing up on the chart along with BOP being very green the past two months makes this a pretty chart. EPS growth has been good the past four years with earnings growth between 34 and 122%. Sales growth during that time has been between 62-76%. Combine the nice chart with the great fundamentals and you have a great long. Cut your loss with a close below the 32.65 level, if the stock does not follow-through on this breakout.

New speculative longs: CTCH LVLT ISIG

CTCH is breaking out of a beautiful and almost a year long cup with handle pattern, on very strong volume. This pattern comes from a previous uptrend full of accumulation and green BOP. The cup was very quiet and the right side of the cup was full of accumulatoin, just what you want to see in a proper cup formation. The handle was quiet and very tight forming a very nice flat base. As the stock built the handle BOP remained max green, making the chart a very beautiful chart. The breakout today comes with good volume and BOP is still maxed out. This is a better speculative stock because EPS growth the last two quarters has been 150 and 200%. Sales growth the past eight quarters has fallen from 743% to 78% but the total sales is still increasing every quarter showing impressive growth for a cheap stock. This is a much better speculative cheap stock to trade than most. Cut your loss w/ a close below the 1.21 area, if the stock does not follow-through from this breakout.

LVLT is bouncing off of support and the 50 dma on above average volume. This stock broke out of a cup with handle pattern in October and has since been building a nice steady ascending base pattern. LVLT looks to be ready to restart another uptrend. Accumulation has been very obvious since the August lows and BOP has been green for most of the time then with it being green for the past month and a half. That makes this chart very pretty on the short-term. EPS is horrible and sales growth is finally starting to pick up gaining 128% at this point. Cut your loss w/ a close below the 50 dma, if the stock does not follow-through with a breakout.

ISIG is bouncing off the 50 dma and support and breaking out of a flat base pattern on very strong volume. You must look at a very long term daily to see the beauty of this chart. The uptrend from Oct 05 to July 06 was loaded with accumulation and spurts of heavy to max green BOP. The base was created on very quiet volume except in October when the stock saw a shakeout but was quickly supported. After the quiet and very tight base the stock breaks out with a surge in volume and BOP appears to be trying to turn positive again. The sales growth is not good and quite volatile but the EPS growth has been between 133% and 300% the past three quarters. This is probably the worst pick of the group and newbies should NOT trade this one. Cut your loss w/ a close below the 50 dma, if the stock does not follow-through on the breakout.

Adding To Current Holdings: FMCN PRGX

FMCN is breaking out of a short but sound cup base on top of larger cup with high handle pattern, on very strong volume. The accumulation on the chart after the move in November started is very clear and heavy and BOP has been above the zero line and green most of the way since then also. This stock is a bit extended but still within a reasonable buy point in the long term overall pattern of the chart. The jump in price, volume, and BOP today, along with all the previous green make this a very pretty chart. EPS growth has been over 160% for each of the past seven quarters. During that time sales growth has ranged between 128% and 247%. That is some astronomical and amazing growth. Still this chart is late and I missed a CLEAR buy signal on 1/3, so newbies should still not trade this one even though it is a perfect CANSLIM stock. Cut your loss w/ a close below the 72.70 level, if this stock does not follow-through on this breakout.

PRGX is breaking out of a nice tight flat base on very strong volume. This chart has gotten very pretty with BOP staying above the zero line since the breakout from a small cup pattern in November. There has been plenty of days of obvious accumulation in this stock since that move. BOP has been rising into higher green territory as the stock built and jumped to its highest level the past two months with today’s breakout. This is a very pretty chart. This stock is pure speculation as both EPS and sales suck. Cut your loss w/ a close below the 50 dma, if the stock does not breakout.