One New Speculative CANSLIM Swing Long And One New Speculative Swing Long

February 26, 2007

New CANSLIM speculative long: EML

EML is bouncing off support and breaking out over the past seven days’ highs, on strong volume. This stock has been in a very strong uptrend since September that coincided with BOP going max green. After a stock split the stock continued to rally on strong volume that culminated with an extremely strong run in February. After a pullback, with BOP in green territory, EML is now bouncing on a pickup in volume after finding excellent support around the 24 area. All of this makes this a pretty chart despite the few red BOP areas (notice the stock rallied or stayed flat during this red period–bullish). The fundamentals are strong with EPS growing at a 54, 11, 33, and 317% clip the past four quarters. Sales have been growing from 6 to 76% during that time. This stock is speculative due to the low average daily volume, lack of fund ownership, and the short base. Cut your loss with a close below the 23.75 support, if the stock does not breakout from this basing pattern immediately.

New speculative long: EVOL

EVOL is breaking out from a flat base on very strong volume. This stock has been in a very nice uptrend since the October lows. The stock has been under solid accumulation and low volume pullbacks the entire way and that pattern really picked up in January. That is when this stock took off on extremely strong volume and max green BOP. Then the stock started a pullback on very low volume with it drying up at the end. During the flat base, BOP remained at a very high green level, helping to put the final touches on a very beautiful chart. There may be a ton of green on this chart but this stocks fundamentals are mixed. EPS is turning around growing 150 and 120% the past two quarters with estimates of a 350% gain for 2007. But sales are stagnant and are still in the red with SMR ratings of E from IBD. This stock despite its beauty, which I will treat accordingly, is not for emotional new traders. Cut your first loss w/ a close below 1.82 and your final loss w/ a close below 1.75, if the stock does not follow-through on this breakout immediately.