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

January 26, 2007

New CANSLIM swing long: SF

SF is bouncing off support of this flat base it is creating, on very strong volume. The flat base you see in this chart is also a handle of a 10-month saucer with high handle pattern. This chart has rounded out very nicely and with this tight handle it becomes even nicer to look at. Volume on the right side of the saucer was very large, indicating strong accumulation, the flat base started off on quiet volume, and now the stock is starting to drift up on very strong volume. Take that action, along with BOP going max green this month and staying max green, and you have a very pretty chart. The fundamentals are also very nice, with EPS growth of 91, 9, and 77% the past three quarters; sales have been growing between 85, 65, and 76% during that time also. Cut your loss w/ a close below the 45.45 level w/ a last resort cut loss at the 50 dma, if the stock does not follow-through on this breakout.

New speculative swing longs: LGND DMRC

LGND is breaking out of an ascending base on very strong volume. This chart has been in a steady uptrend since July and has seen plenty of accumulation along the way. BOP has gone max green three different periods of time as it moved higher. The price breakout on a volume surge, with BOP moving back near max green levels makes this a very pretty chart, despite some red. This is purely a speculative stock, as EPS is HORRIBLE and sales growth is slowing to low double digits. Cut your loss w/ a close below the 50 dma, if the stock does not follow-through on this breakout.

DMRC is bouncing off the 50 dma and breaking out from a flat base-with-a-shakeout, on very strong volume. The uptrend since the July bottom has been filled with plenty of accumulation, along with having low volume pullbacks along the way. After the shakeout in early January, accumulation started to come into this stock quite heavily while BOP went max green and has remained at these upper max green levels. The price breakout on strong volume w/ BOP being a strong green for the past three weeks makes this a very pretty chart on the short term. This is purely a speculative stock as fundamentals are not good. EPS did grow 105% this year from a negative number but sales growth has been getting worse and is now growing at a negative pace. Cut your loss w/ a close below the 50 dma, if the stock does not follow-through on its breakout.

Adding to my existing longs: TSYS MEMY

TSYS is breaking out of a two month cup with handle and a nine-and-a-half month base on base pattern, on strong volume. This chart is loaded with accumulation and green to max green BOP coming off the September breakout. After a strong run-up on tons of accumulation, it created a nice quiet cup base on low volume, made the right side of the cup on good volume with BOP going max green, and is now breaking out with BOP still at max green. This is a very pretty chart. The best part of this cheap stock is that, like CTCH two days ago, fundamentals are pretty darn good. EPS has grown 400, 133, and 300% the past three quarters; sales have grown 27, 27, 49, and 6% during the past four quarters. This is still a speculative stock, but cheap stocks with very strong EPS and sales growth tend to do a lot better than most cheap P.O.S. Cut your loss w/ a close below the 50 dma, if the stock does not follow-through on its breakout.

MEMY is pre-breaking out of a beautiful base on base pattern and a short cup pattern, on very strong volume. This stock has seen a TON of accumulation off the September lows, along with very quiet pullbacks where virtually no sellers showed up. That price and volume action along with all that beautiful max green BOP and BOP over the zero line makes this one of the prettiest charts out there. Even though this is one of the prettiest green charts out there, it is still very speculative. The fundamentals are horrible. There is nothing there. This is purely a play on the chart; it has been a great play so far (up 53%). Cut your final loss w/ a close below 3.10, if this stock does not follow-through on its pre-breakout breakout.