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

February 22, 2007

New CANSLIM swing long: SYK

SYK is breaking out of a very nice flat base, on very strong volume. This stock is breaking out from a base that is coming after a long uptrend but the breakout is on such strong volume that more highs look to be in store. The uptrend has been filled with accumulation, low volume pullbacks, and BOP near the zero line with it recently getting green. This is a very pretty chart. The stock’s fundamentals are solid also. EPS has been growing 20% or better for the past four quarters; sales have been growing 9% or better for the past eight quarters. The low volatility, good chart and fundamentals make this a good long for everyone. Cut your first loss w/ a close below the 61.32 level and your final loss w/ a close below the 50 dma, if the stock does not follow-through on the breakout immediately.

New speculative longs: LEA CSS CHTP

LEA is bouncing off the February’s breakout pivot point and recent support, on average volume. This bounce here looks like the area where this stock is ready to start another uptrend. The uptrend that started last year in April has been strong with good accumulation and strong periods of BOP. The move above the 50 dma in January and the breakout in February on big volume with BOP going max green made this a pretty chart. The stock looks ready to start another leg up but don’t be surprised if it fails. The fundamentals are horrible. This is pure speculation and this is not a good long for emotional new traders. Cut your first loss w/ a close below the 37.25 level and your final loss w/ a close below the 50 dma, if the stock does not follow through on this move immediately.

CSS is bouncing off the 50 dma and breaking out above resistance (flat base on a weekly), on strong volume. This stock has been under very heavy accumulation since the large October breakout. That accumulation has come with BOP at or near max green almost the entire way. Take that, along with today’s powerful move in price, volume, and BOP, and you have a very pretty chart. This stock is still speculative because it has weaker EPS and sales growth than what you like to see in a great stock. Cut your loss w/ a close below the 50 dma, if the stock does not follow-through on this move immediately.

CHTP is breaking out of a flat base, on huge volume. This stock, even though there is red BOP all over the chart, has been acting very well the whole way up from the Sept lows. You will notice there are tails everywhere in the daily price chart. This shows that every intraday dip on this chart was accumulated by someone. All of the intraday reversals, steady price gains on big volume, low volume pullbacks, and now a breakout on a HUGE volume and BOP surge makes this a decent chart. Besides this chart pattern, there is nothing else. The fundamentals are non-existent. This stock is definitely not for new emotional traders. Avoid this one for sure. Cut your loss w/ a close below the 5.60 level, if the stock does not follow-through on this breakout immediately.

Adding to CANSLIM long: 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 speculative CANSLIM long: PCC

PCC is bouncing right off the 50 dma, on above average volume. This stock has been getting some huge accumulation off the 50 dma, since the uptrend started in August. The uptrend has been full of strong accumulation, low volume pullbacks, and very high to max green BOP the entire way. The bounce today with a close right near the HOD with BOP still max green, when combined with all the previous max green BOP and price/volume action, makes this a very pretty chart. The fundamentals are getting stronger. EPS grew 94 and 164% the past two quarters and sales has been growing from 5 to 31% the past four quarters. This stock is a bit speculative due to the low average daily volume which leads to some volatility and the fact that the overall industry is weak. Cut your loss w/ a close below the 50 dma, if the stock does not follow-through on its breakout.

Adding to speculative long: HOTJ

HOTJ is bouncing off recent support, on HUGE volume. This stock appears to be ready to breakout from the current short cup consolidation pattern it is creating. This chart is loaded with excellent price action with tons of intraday support on days when the stock dipped, a ton of accumulation on the up legs with light volume pullbacks, and with beautiful max green BOP all over this chart since June. All of that green BOP and price action, along with today’s move on strong volume, make this a beautiful chart. Fundamentals are mixed with EPS still bleeding red but sales have been growing at a 71, 29, 206, and 831% pace the past four quarters. Cut your first loss w/ a close below the 3.36 level and your final cut loss w/ a close below the 50 dma, if the stock does not breakout from this cup pattern immediately.