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

June 26, 2007

NONE OF THESE ARE PERFECT; ALL ARE GOING TO BE SMALL POSITIONS OVERALL, JUST LIKE ALL THE RECENT LONGS HAVE BEEN. MY TWO FAVORITE CHARTS ARE THE ASTI AND ELN CHARTS. ASTI WILL BE LARGER THAN THE OTHERS BUT WILL STILL BE SMALL OVERALL DUE TO THE MARKET AND THE VOLATILITY IN THE STOCK. I DON’T RECOMMEND NEWBIE EMOTIONAL INVESTORS GO LONG ANY STOCK THAT IS NOT NEAR THE 50 DAY MOVING AVERAGE, WITH THE MARKET AS CHOPPY AS IT HAS BEEN THE PAST FOUR WEEKS.

new speculative CANSLIM long positions: WCRX BIIB

WCRX is breaking out of an ascending base, on very strong volume (combine the past three days). What I like about this chart is that I notice a nice steady uptrend that usually finds solid support around the 50 day moving average and that the stock almost closed at its HOD on today’s breakout. The fact that the RS line is making a much higher new high than price and that BOP turned green two days before the breakout also makes this a nice chart. What I obviously do not like is all the red BOP and that one bad day in March. The fundamentals are quite strong, with EPS growing between 44% and 263% the past three quarters, sales growing between 1% and 64% the past seven quarters, ROE an impressive 19%, and 07 and 08 YOY earnings estimate growth of 54% and 18% respectively. Fund ownership has grown from 17 to 30, over the past three quarters, clearly a bullish scenario. Cut your loss with a close below the 50 day moving average, if the stock does not move higher immediately.

BIIB is breaking out of an oddly shaped cup with handle pattern (almost looks like a reverse head-and-shoulder with handle), on very strong volume. This is not the most impressive chart but it is a breakout none-the-less. What is nice about this chart is the strong volume in October that led to the the top in January, the heavy accumulation on the right side of the cup that was also larger than the volume of the left side of the base, the extremely strong volume yesterday and on today’s breakout, and the green BOP since late May. The BOP also jumping to a higher level, today, was also nice. What I do not like about this chart is the ugly and somewhat deep left side of the cup (Jan-March), the negative and red BOP during January to March, the fact that BOP is not closer to max green now, and the RS line is well below the November/January highs despite the stock making a new closing high for 2007. The fundamentals are impressive but they are sort of slowing down, with EPS growing between 7% and 83% the past six quarters, sales growing between 4% and 18% the past eight quarters, ROE of 11%, debt of only 1% of shareholder equity, and YOY earnings estimates growth for 07 and 08 for 16% and 18% respectively. Fund ownership has fallen from 419 funds to 371 funds owning the stock the past four quarter–watch for that. Cut your first loss with a close below the 50.63 level and your final loss with a close below the 50 day moving average, if the stock does not move higher immediately.

new speculative long positions: ASTI IGTE PMTC

ASTI is breaking out above the 50 day moving average and past a month and a half of resistance, on very strong volume. This stock appears ready to start another uptrend, with this breakout above the 50 day moving average. BOP has been green to max green from early January to early/mid May and from mid June to now, making this a very pretty chart. What would have made the chart better would have been BOP to have been green to max green the entire way since mid January. Also the 50 day moving average is trending slightly lower in the short-term. That puts just a little bit of extra pressure on the stock. So even though the chart is very pretty, it is no where near perfect. Also, this is a solar momentum stock with no earnings or sales so I donâ€™t necessarily recommend this for newbie emotional traders. Cut your loss with a close below the 50 day moving average, if the stock does not move higher immediately.

IGTE is breaking out of a cup with handle patter, from a strong uptrend, on strong volume. What is very nice about this chart is the max green BOP in April and the green to max green BOP from early June to today’s breakout. It is always nice to see a stock have max green BOP during the base and on the breakout. But I am not getting too excited, because the RS line is well below the old high in March while price is very close to its old high and the 50 day moving average is in a slight downtrend still–but it is turning up after today. The fundamentals aren’t that great but they are definitely getting better. EPS has grown between 20% and 300% the past three quarters, sales have grown from 2% to 11% the past four quarters, ROE is 7%, this company is carrying no debt, and YOY earnings estimates for 07 and 08 are for gains of 69% and 52%. Fund ownership has only grown from 32 to 33 the past four quarters but management still owns 69% of the stock. So obviously management believes this stock is going higher or they would not own so much. Cut your first loss with a close below the 7.90 level and your final loss with a close below the 50 day moving average, if the stock does not move higher immediately.

PMTC is breaking out of a long cup with high handle, on very strong volume. This is probably my least favorite chart, but I am impressed by the breakout and daily candlestick pattern. What I like about this chart is that BOP went green today on today’s breakout, volume was strong on today’s move, and the previous uptrend from July to October was full of accumulation and some max green BOP near the top. I do not like all the red BOP and negative BOP, the constant violations of the 50 day moving average, the RS line lagging the price into new high ground, and the big red volume bars that you see on your chart. The fundamentals are not that bad, with EPS growing between 5% and 61% the past five quarters, sales growing between 7% and 26% the past eight quarters, ROE a very strong 30%, no debt, and YOY earnings estimates for 07 and 08 for gains of 17% and 4% respectively. Fund ownership has fallen from 185 to 172 funds the past four quarters. So that is another notch against it. Cut your loss with a close below the 20.04 level, if the stock does not move higher immediately.

adding to existing speculative long positions: ELN MIVA

ELN is breaking out of a base on base pattern, on above average volume. This is a continuation buy of the 6/14 move. This chart is very nice with the positive intraday daily price action going all the way back to the left side of the base in July of last year, all the huge accumulation since the gap in May, with the RS and moneystream line hitting new highs, and with BOP going max green in mid/late May and staying green on today’s breakout. The fundamentals are mixed, with EPS bleeding red ink now and into the future and sales growing between 9% and 31% the past eight quarters (minus one quarter of negative growth). Fund ownership is really going nowhere, but it is shrinking from 68 to 66. This is not a good long for emotional inexperienced investors, due to the volatility and risk involved in this stock and the poor fundamentals. Cut your loss with a close below the 20.70 level, if the stock does not move higher immediately.

MIVA is breaking out of a short flat base on two-week tight base, on strong volume. This chart is very pretty with the tight price action in both bases, the strong accumulation with low volume pullbacks since late December, the RS line hitting new highs well ahead of the price, and the max green BOP during December and January and the recent green BOP now. I donâ€™t like that the BOP is not max green now and that the bases are a bit short. The fundamentals are poor, with EPS bleeding red ink and doing so until 2008 and sales have only shown one quarter of growth during the past seven and that was only 1%. Fund ownership hasnâ€™t grown the past four quarters. Therefore, this is a stock probably best avoided by emotional inexperienced investors. Cut your first loss with a close below the 5.83 level and your final loss with a close below the 50 dma, if the stock does not move higher immediately.