One New CANSLIM Swing Long, One New Speculative CANSLIM Swing Long, One New Speculative Swing Long, And One Speculative Long I Am Adding To My Existing Position

March 26, 2007

new CANLSIM swing long: SMSI

SMSI is breaking out of a cup with handle pattern, on extremely strong volume. This stock, as you can see via the chart, has been in a nice steady uptrend since the market lows in 2002. Since then, you can clearly see, until the middle of 2006, this stock moved higher on huge volume and pulled back on ligher trade, with BOP spending a lot of time in the green zone. The stock started an ugly pullback last year, rallied on lower volume, and then had a nasty reversal at the beginning of November. This sell-off, on very low volume during the final part of the trend, lasted until the beginning of March. Then the stock jumped on huge volume and with a surge in BOP back to the green zone. After a very low volume pullback this month, SMSI has now broken out past multiple resistance points. Today’s breakout, along with the overall action of the stock since the 2002 lows, makes this a pretty chart. The fundamentals are very strong, with EPS growing between 22% and 999% the past six quarters and sales growing between 7% and 387% the past seven quarters. Fund ownership has increased from 21 to 58 the last four quarters also, showing that the big boys like this stock. However, the only problem with everyone going long is the fact that this is a very volatile stock. New emotional traders should probably stay away from this one as the chart is not perfect and has too much risk for you guys. If you are experienced, cut your final loss with a close below the 15.46 area, if the stock does not follow-through on its breakout immediately.

new speculative CANSLIM swing long: NOVB

NOVB is bouncing off recent support, which is also the pivot point area of the late February breakout, on strong volume. This stock has been in an uptrend for a long time but the volume has been way too small for anyone to really care. Volume is still too small for almost all traders now but the chart is much better. In September the stock started to move higher on max green BOP which led to the early January 2007 breakout. That breakout on large volume with BOP going max green again led to the most recent powerful rally. This rally has only seen one day where BOP was not green and during the entire rally there were no distribution days much less any selling. The recent pullback has come on very low volume and BOP has stayed green, leading to today’s bounce. Today’s bounce with BOP being max green and volume picking up, along with the chart pattern going back to October, makes this a very pretty chart. The fundamentals are very solid, with EPS growing between 15% and 26% the last three quarters and sales growing between 8% and 32% the past eight quarters. However, sales is slowing. The low sales growth combined with the lack of fund ownership increases, along with the very illiquid stock (only averages 23k a day), makes this an extremely risky long for newbies. The other thing about this stock is that I would make this a limit order ONLY. Do not overpay for this stock. Cut your loss with a close below the Cut your first loss with a close below the 23.93 level and your final loss with a close below the 50 day moving average, if the stock does not follow-through on this bounce immediately.

new speculative swing long: CCC

CCC is breaking out of a very short flat base pattern, on very strong volume. This stock has only recently become a nice looking chart, after putting in the Aug - October lows. The stock had a nasty sell-off from March to August, but in August the stock had a huge swoon to the downside on huge volume and that turned out to be the bottom. Since then the stock has trended up, with it starting to pick up steam in October. That is when the stock started to make some very heavy gains in clear accumulation, with BOP going max green and no selling on the pullbacks. Since then the stock has trended up with BOP staying near the zero line, volume increasing on the rallies, and volume declining on the pullbacks. The stock rallied in March on strong volume with BOP shooting up near the max green area. After a pullback that was very flat with clear support intraday and BOP staying near the top, the stock has started another move. Today’s breakout, on a surge in volume, with the previous action since October, has made this a very pretty chart on the short term. However, this breakout is from an extremely short pattern and the chances of it failing are much higher. I am looking at this as a test position. If BOP stays green and it bases again and breaks out, I will go long more. For now this is just a test buy. The fundamentals are not that good, with EPS just straight-up ugly and sales showing no real growth. Funds also don’t appear too interested as since March 2006 there has been a decrease in funds owning this stock. This stock is breaking out of a very short base and the fundamentals are not that good. Therefore, this stock makes a horrible long for those new investors looking to make safe significant gains. Cut your first loss with a close below the 7.54 level and your final loss with a close below the 50 dma, if the stock does not follow-through on this breakout immediately.

adding to my existing speculative position: APAC

APAC is bouncing off the 50 dma and the pivot point area of the February breakout, on very strong volume. This stock has been in a nice steady uptrend since the September 2005 lows, where it started moving higher on huge volume and max green BOP. After a nice long move higher, it pulled back around March 2006 till the August breakout. On that breakout the stock started its uptrend again and in December started to really run on HUGE volume and max green BOP. After a beautiful breakout in February (where I went long) on another HUGE surge in volume and BOP, the stock then started a nice slow pullback. During this pullback, BOP has stayed max green and the volume really dried up in the base, leading to the past two day’s bounces at the 50 day moving average. The bounce the past two days with the strong volume, along with all the green on this chart, makes this a very pretty chart to go long. The fundamentals are not that good at all, with EPS only now going positive with a 333% gain in the most recent quarter and estimates for a gain of 129% for the year in 2008; sales growth is horrible and non-existent. There is also no increase in fund ownership during the past four quarters but all the volume in this stock tells me that is going to change. Even though this stock has poor fundies, the stock still is very close to a safe cut loss area and has a very pretty chart. Therefore, I see no problem with newbies investing in this speculative gem. Cut your loss with a close below the 50 day moving average, if the stock does not follow-through on this bounce immediately.

One New CANSLIM Swing Long, One New Speculative CANSLIM Swing Long, One New Speculative Swing Long, And One Speculative Long I Am Adding To My Existing Position

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