Two New CANSLIM Swing Longs, Four New Speculative Longs, And Two Stocks I Am Adding To My Existing Positions.

January 29, 2007

New CANSLIM swing longs: MFW FNDT

MFW is bouncing off support of this high tight flat base, on very strong volume. This bounce comes after a very quiet downtrend that was preceded by a very powerful uptrend full of heavy accumulation and a lot of green BOP. Price, volume, and BOP all moving higher, after a very tight basing pattern makes this chart very pretty. What also helps its cause is the EPS and sales growth. EPS has grown 68 33 and 77% the past three quarters and sales have grown 118 677 620 and 624%. I am not sure what there isn’t to like about that. Basically EVERYONE has my blessing on this one. Cut your loss w/ a close below the 29.93 level and if you have a higher risk tolerance you can use a close below the lows of the short base in Dec/Jan ($25), if the stock does not move higher immediately.

FNDT is bouncing off of support which is right near the 50 dma, on above average volume. This stock has been in a steady uptrend, since July, and has been full of accumulation and green BOP along the way. The visible accumulation with light volume pullbacks with BOP staying above the zero line and staying green most of the way makes this a very pretty chart. This recent bounce off of this flat base and handle formation of a 10 month cup with handle, appears to be the start of a possible breakout move to new 52-week highs. Chances of success increases with the solid fundamentals this stock has. EPS has been growing 25 13 40 and 23% the past four quarters, with sales growing 12 13 17 12% the past four quarters. Estimates for 2007 have been increased and overall the numbers are very solid. Cut your loss w/ a close below the 50 dma, if the stock does not breakout from this cup with handle/flat base formation.

New speculative swing longs: MRVC XIDE SPPI INXI

MRVC is bouncing off of the Januarly breakout’s pivot point on very strong volume. This chart appears to be forming a deep cup with handle pattern. The momentum is starting to coil for an upside breakout with the recent accumulation the past two days with today’s strong close. The accumulation on this chart off the August lows, along with BOP going to a very high green level makes this a pretty chart. This stock has better odds of succeeding than other low priced stocks, as EPS grew 133% the most recent quarter with the EPS going black again; sales have been growing 11 25 35 and 36% the past four quarters. So there is definitely a fundamental turnaround story to go with this chart. Cut your loss w/ a close below the 50 dma, if the stock does not move immediately higher.

XIDE is breaking out of a cup with high handle base on very strong volume. This cup was formed after an uptrend from the March bottom and as the stock built the right side of its base in October accumulation came in very heavy. The heavy accumulation, with the nice round base, and all the green BOP makes this chart very pretty; especially with today’s price and volume surge with BOP going max green. This stock has horrible fundamentals and is purely a play on the pretty chart. Cut your loss w/ a close below the 5.05 level, if the stock does not follow-through with this breakout.

SPPI is breaking out of a very nice round ascending base pattern, on strong volume. After the HUGE gap up in September, SPPI has been slowly climbing higher on good volume and pulling back on extremely light volume. Each pullback has been less and less, creating this very nice pattern. BOP has been spent almost every day above the zero line and has been green half the way, since mid-August. The price surge and close in the upper half of the daily range at the HOD, the expansion in volume, and BOP going to a very high green on Friday and moving higher today makes this a pretty chart. The fundamentals are horrible and this stock is only a play based on the very nice chart. Cut your loss w/ a close below the 50 dma, if the stock does not follow-through on the breakout immediately.

INXI is breaking out of a short term flat base and a longer term ascending base, on very strong volume. This stock has been in a steady uptrend since October of 2005 and during the uptrend has had tons of days of clear accumulation. Along with the accumulation, BOP has spent a lot of time above the zero line and at max green BOP, making this a pretty chart. The price, volume, and BOP surge back to the max level bodes well for further price gains. EPS is positive again and sales growth is growing from 21 to 35% the past four quarters, giving this some reason for further price gains. However, this stock is too light for almost everyone to trade. I do not recommend ANYONE go long this stock, unless you can get it near the 8.75-8.96 level. Cut your loss w/ a close below $8 or the 50 dma 9–whichever one is closer–if the stock does not follow-through on this breakout immediately.

Adding to current longs: HMSY ADST

HMSY is breaking out of a flat base on very strong volume. This stock is late in its run so I would not make this a big position. But the very flat base, great accumulation on the previous runup, low volume basing, and max green BOP going back to the beginning of January makes this an extremely pretty chart. The fundamentals are getting weaker with EPS growth coming to a screaching halt and sales growth slowing from 36-21% the past three quarters. So taking that, with BOP actually ticking down on today’s breakout, and the stock being late in its run (I already have a 71% gain on intial long) it may be a bit risky to buy too much of. So keep this buy small, if you must buy at all. Cut your loss w/ a close below 17.19, if the stock does not follow-through on this breakout immediately.

ADST is breaking out of a very sound cup pattern on very strong volume. This breakout from this cup pattern comes right after an extremely powerful uptrend from October to December on HUGE accumulation and max green BOP. The uptrend filled with that much accumulation and max green BOP the entire way offered me early signals to get long this stock in mid December, late December, and early January. This breakout, with a volume surge, and a BOP surge back into green territory, along with all that max green BOP and accumulation from the previous uptrend makes this a very pretty chart. This long is strictly based on speculation and I am only adding to it because it is breaking out from a perfect chart pattern. The fundamentals are horrible so in no way do I advocate going long this stock. But the chart is so pretty that I will speculate and take some more for the fourth time. Cut your loss w/ a close below the 50 dma, if the stock does not follow-through on this breakout.