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

February 24, 2007

New speculative CANSLIM longs: UCLP IART ATR

UCLP is breaking out of a short cup which is also part of a longer base on base pattern. Volume is lacking on this breakout but the price pattern it formed in the base and on this breakout signal that sellers have dried up. BOP has been a high level green the whole period, after February’s move. The beautiful BOP, with proper price action, and a big jump in RS makes this a beautiful chart. The fundamentals are very good too, showing continuous growth. EPS has been growing between 5% and 28% the past eight quarters and sales have been growing between 4% and 25% the past eight quarters. This would be a great long for everyone, if there was more avg. daily volume, more volume on today’s breakout, and the industry group was better. However, this is still a great stock. Cut your loss w/ a close below the 28.64 level, if the stock does not follow-through immediately on its breakout.

IART is breaking out of a very short cup pattern, on average volume. This stock has gotten real green after the early February move and volume has dried up in the base signaling the selling has dried up. This stock has been looking much better since the November move, with uptrends on more accumulation than distribution on pullback. Today’s breakout, with BOP being green the past month, makes this a pretty chart. Fundamentals are solid with EPS growth slowing but sales growth picking up. Sales have grown 18,17, 43, and 68% the past four quarters. This stock still isn’t the best CANSLIM long due to the stock being much weaker in this market than other leaders, the chart being very sloppy with red all over it until November, the current breakout coming from a short base, and EPS slowing. Cut your loss w/ a close below the 43.57 level, if the stock does not follow-through on its breakout immediately.

ATR is breaking out to new closing highs, on strong volume. This stock has been in a nice steady uptrend off the July lows that led to a powerful breakout gap in February. After that powerful move on strong volume, with BOP going max green, this stock then built a nice flat base. This flat base was built with BOP being a very strong green and wtih great intraday price action (look at the tails, intraday support). Today’s breakout, even though BOP dropped a bit, along with the overall chart pattern, makes this a pretty chart. The fundamentals are good with EPS growing between 12% and 19% the past four quarters and sales growing 9% to 25% the past four quarters. This stock would be a perfect CANSLIM long, if the base was a bit longer, volume was quieter in the base, the breakout was on stronger volume, and the fundamentals were a bit stronger. Cut your loss w/ a close below the 64.29 level, if the stock does not follow-through on its breakout immediately.

New speculative longs: APAC TORM MSI

APAC is bouncing off support, right at the 50 dma, on extremely strong volume. This stock has been in a steady uptrend since the June/September lows in 2005, finding support at the 50 and 200 dma along the way. The uptrends have been filled with constant accumulation that are followed by low volume pullbacks. Recently, this stock was on a tear from November to the January top on heavy accumulation and strong BOP (max green most of way). The bounce here on strong volume and a surge in BOP to the green territory, along with the previous action, makes this a beautiful chart. However, that is all you have, as the fundamentals are still horrible. They are getting a bit better on the EPS side with a 333% gain this recent quarter and estimates at a 143% gain for the year 2008. This is not a good long for new emotional traders. Cut your loss w/ a close below the 50 dma, if the stock does not continue to breakout immediately.

TORM is bouncing off the 50 dma and nearing a breakout from this nice long cup pattern, on strong volume. This stock has enjoyed a steady uptrend off the August lows that has seen plenty of accumulation in it. After the December breakout on extremely strong volume with BOP going to a very high green territory, TORM pulled back into a nice cup base. The volume has been extremely low in this base and dried up at the end. During the base, BOP stayed at the zero line with the beginning and couple of days in the middle being in green BOP territory. This breakout/bounce on a volume surge and BOP surge into green territory, along with the overall chart action, makes this a pretty chart. The fundamentals are a joke, with EPS and sales all over the place. This is not a good long for new emotional traders. Cut your loss w/ a close below the 50 dma, if the stock does not follow-through on this move immediately.

MSI is breaking out of a cup pattern, on extremely strong volume. This breakout is beautiful but it is too extended. If this chart would have had a volume surge yesterday, with all that green BOP and huge accumulation (tall green bars) on the chart, this stock would have been taken yesterday. However, the volume was lower and no signal was given until now. Still if this stock can pullback at least 20-33% of the way on low volume it will make a good speculative long for me. I am taking 50 shares here, to pay some bills. If this stock takes off, it will be very rewarding. However, the pullback it could subject me too is more worrisome. However, you don’t have to worry as this is a HORRIBLE long for anybody but me. Avoid this stock and its terrible fundamentals. Cut your loss w/ a close below the 50 dma, if the stock does not move higher immediately. Before it even gets there, you can guarantee I will sell some before the stock sees that line.

Adding to existing CANSLIM postion: FFH

FFH is bouncing back over the 50 dma, on very strong volume. This stock has been in a powerful uptrend since the June lows. The uptrend has been full of heavy accumulation with lower volume consolidation phases. BOP was at a high green to max green level the whole way up. The base it is currently creating is on much lower volume than the previous uptrend and BOP is holding around the zero line. Today’s bounce on strong volume and a surge in BOP into the green, along with the previous action, makes this a pretty chart. The fundamentals are decent but estimates are 44% lower for this year. Sales are all over the place, but EPS is growing but don’t forget about those estimates. This is very speculative, due to the fundies, low avg. daily volume, and volatility. Cut your loss w/ a close below Friday’s lows, if the stock does not continue to move higher immediately.

Adding to existing speculative positions: RDCM HOTJ CSS

RDCM is bouncing off support and the pivot point of the early Feb. breakout, on very strong volume. This stock has rallied off the July lows on strong accumulation, low volume pullbacks, and strong BOP. BOP has been max green during this entire basing period and todayâ€™s price jump on volume with BOP staying max green makes this a very pretty chart. This stock is not a great long for newbies, due to the longer-term overhead resistance on the chart. The EPS is getting better with growth of 33% or higher the past 3 quarters. Sales are growing 14% or higher the past 3 quarters. Cut your loss w/ a close below the 50 dma, if the stock does not follow-through immediately.

HOTJ is breaking out of a very beautiful short cup pattern and a longer-term very deep saucer with handle base, on HUGE volume. 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 todayâ€™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.

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 todayâ€™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.