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

February 21, 2007

New CANSLIM swing long: CTRN

CTRN is bouncing off the pivot point support of the February gap breakout, on average volume. This stock appears ready to start another upleg as volume was really low on the pullback leading up to this bounce right near the 50 dma. BOP has been max green nearly the entire way, making this recent chart pattern very pretty, after an ugly May to August. This stock does have good fundamentals but they are slowing. EPS has gone from growing 63% to 11% the past three quarters. Sales have dropped to growing at a 25% clip. Fund ownership is also going down over the last two reporting periods. This is only an OK long. There is nothing really special here even though it is a CANSLIM stock. Cut your loss w/ a close below the 50 dma, if the stock does not follow-through on this bounce immediately.

New CANSLIM speculative swing long: STTS

STTS is breaking out of a base on base pattern on very strong volume. This breakout comes from a very quiet flat basing pattern that was preceded by a large volume runup. This breakout with a surge in volume and BOP makes this a pretty chart. However, the chart has a habit of being V-ish with its moves and choppy overall. Take that, along with it being sub $10 and its EPS and sales are slowing and you have a poor long for emotional traders. Fund ownership is also declining. Cut your loss w/ a close below the February lows, if the stock does not follow-through on the breakout immediately.

New speculative swing longs: LMRA WG

LMRA is breaking out above the 50 dma, on strong volume. This move over the 50 dma came right after this stock bounced off the 200 dma on a surge in volum and BOP. The volume on the pullback that started in November has been VERY QUIET. Take that along with BOP staying above the zero line and spending most of the time in the green and you have a very sound pullback. Today’s move, combined with the price, volume, and BOP action the past five months, makes this a beautiful chart. However, besides a beautiful chart, that is all we have. EPS is bleeding red and sales growth is growing but weakening. This is a really bad long for emotional new traders. This stock should be avoided completely. I can’t help myself. Cut your loss w/ a close below the 4.58 area, if the stock does not follow-through immediately.

WG is breaking out above the February highs, on very strong volume. This breakout appears to be from a very ugly deep and improper cup with handle. But to me I am calling it a breakout from an ascending base on top of base pattern. The uptrend since November has been loaded with accumulation, has had low volume pullbacks, and has had BOP above the zero line and near upper green territory the entire way. Today’s breakout, with the recent action, makes this a pretty chart. The fundamentals are mixed, with EPS bleeding red ink and sales growth showing 75% or higher gains the past three quarters. This is not a good long for newbies. Cut your loss w/ a close below the 50 dma, if the stock does not follow-through on its breakout immediately.

Adding to existing CANSLIM position: TESOF

TESOF is bouncing right off support which is right near the 50 dma, on extremely strong volume. This appears to be the start of another uptrend like the one from May 05-Jan 06. This move comes after a downtrend on low volume that had BOP stay out of the red. Before this move today, prices have already been crawling up from the bottom, in Oct., on clear accumulation, low vol. pullbacks, and with BOP above the zero line and near max green or in max green territory.Combine that with todayâ€™s bounce on huge volume with BOP going max green and you have a beautiful chart. The fundamentals are excellent as well. EPS has been growing from 92-525% the past three quarters and sales have grown from 44-110% the past four quarters. Estimates for earnings this year is for a 47% increase. What makes this stock speculative is the fact that it trades under 100k shares avg. a day and has a 60 RS. Normally, you want it in the 70â€™s. Cut your loss w/ a close below the 50 dma and/or the 19.18 area, if the stock does not follow through on this bounce.

Adding to existing speculative positions: SGIC HOTJ

SGIC is breaking out of a high tight short flat cup base, on avg. volume. This is the breakout that was hinted at three days ago on the HUGE volume bounce that had BOP go to the max green territory. BOP is still at the max green level after todayâ€™s breakout. Take that, along with the current price, volume, and BOP action, and you have a very pretty chart. This stock is not for newbies as the average daily volume is too low, EPS does not exist, and sales growth is going in the wrong direction. Cut your loss w/ a close below the 26.20 area, if the stock does not follow-through on the breakout immediately.

HOTJ is bouncing off support near the 50 dma, on strong volume. I missed this one earlier tonight but have caught it now. This is pure speculation and not for newbies. Very pretty chart. I love all the max green BOP and accumulation and price action on this chart.