One New Speculative CANSLIM Long Position, Two New Speculative Long Positions, And Four Stocks I Am Adding To My Existing Long Positions

June 28, 2007

new speculative CANSLIM long position: JDAS

JDAS is breaking out of a base on base pattern, on very strong volume. This chart is and has been very pretty since early April where the stock took off on huge volume and with BOP surging to a near max green BOP. Since then, it pulled back on low volume with BOP holding the zero line, and then took off again in June on heavy accumulation with BOP trending to a higher level of green BOP every week. The RS line and moneystream are also hitting new highs, confirming the action in the stock. About the only thing that I can complain about is the two big red volume bars in the current base. If those were not there and BOP was max green during the whole base, then it would be perfect. The fundamentals are good and getting better, with EPS growing from 18% to 300% the past three quarters, sales growing from 60% to 90% the past three quarters, YOY earnings estimates for 07 and 08 for gains of 74% and 16% respectively, and a ROE of 6%. Fund ownership has fallen from 91 funds to 87 over the past year, giving me a pause on wanting to load up on this very pretty fundamentally strong stock. Cut your loss with a close below the 50 day moving average, if the stock does not move higher immediately.

new speculative long positions: OIIM EVST

OIIM is bouncing off the 50 day moving average and breaking out past a month of resistance, on strong volume. What makes this chart very nice is all the green BOP since September, all the strong accumulation since early April, and the nice tight price action around the 50 day moving average since April. What I do not like about this chart is the red BOP in March, the fact BOP is not max green now on this move, the way volume is falling off as this stock breaks out, and the RS line is lagging the price. Obviously, this isn’t the greatest 50 dma bounce/breakout play. The fundamentals are a mixed bag, with current EPS with nothing but negative growth the past eight quarters, sales have grown between 7% and 27% the past eight quarters, YOY earnings estimates for 07 and 08 for gains of 999% and 100% respectively. Despite this amazing YOY growth in EPS, funds are losing interest. Fund ownership has fallen from 40 funds to 20 the past four quarters; that is quite a haircut. If funds are losing this much interest, emotional inexperienced investors should probably just stay away. Cut your first loss with a close below the 50 day moving average and your final loss with a close below the 10.11 level, if the stock does not move higher immediately.

EVST is breaking out of a very long saucer with high handle pattern, on extremely strong volume. This chart is very impressive going all the way back to early November in 2005 where the stock exploded higher on huge volume and max green BOP till March (450% plus move). More recently this chart started getting real nice in May when the price started zooming higher on extremely strong accumulation and max green BOP. This high flat base (the handle) was created on such quiet volume and was so pretty with all the max green BOP in it that today’s breakout with BOP going back max green on a price and volume surge is only that much nicer. The fundamentals are very good, with EPS growing between 19% and 999% the past eight quarters, sales growing between 24% and 32% the past three quarters, a ROE of 17%, and YOY earnings estimates for 07 and 08 for gains of 5% and 25% respectively. This is not a good long for newbies due to the very low average daily volume and the very high amount of risk involved in this stock. Cut your loss with a close below the 25.85 level, if the stock does not move higher immediately.

adding to existing speculative CANSLIM long position: CRNT

CRNT is breaking out of a very high-tight flag pattern, on its strongest volume in six years. This chart is very pretty with all the max green BOP in October and November of last year and during the most recent uptrend in May. The accumulation and price action, during the max green BOP also gives it that added beauty. Even during the recent ascending action up, BOP still stayed over the zero line, before blasting back to max green with price and volume surging. The fundamentals are excellent and only getting better, with EPS growing between 33% and 300% the past eight quarters (minus the June 06 Q where it grew 0%), sales growing between 27% and 64% during the past eight quarters, YOY earnings estimates for 07 and 08 for 79% and 35% gains respectively, and a ROE of 14%. Despite the hot chart and fundamentals, this long must remain smaller due to the short base and volatility that is inherent in this stock. However, last time I cautioned buying too much of this stock because of the risky nature and it has run 40% since then. Obviously, I am wishing I bought more. Cut your loss with a close below the 9.61 level, if the stock does not move higher immediately.

adding to existing speculative long position: KHD INNO REFR

KHD is bouncing off of short-term support near the 50 day moving average and off of the pivot point area of the June breakout, on above average volume. This chart is very beautiful with all the green to max green BOP all over this chart since forever but starting in April it has really become beautiful. Every single day but one day has had green BOP since mid April. Along the way, price has trended well above the 50 dma, accumulation has been HUGE during the rally, and the basing periods and pullbacks have been on very low volume. This chart is near perfect. The problem is that this move today does not qualify as a perfect move, even though we are dealing with a near perfect chart. Cut your loss with a close below the 50 day moving average, if the stock does not move higher immediately.

INNO is breaking out of an odd-shaped cup with high handle pattern and bouncing off support near the 50 day moving average, on very strong volume. This stock is very pretty with all the green BOP in it since January and more importantly the max green BOP that has developed over the past month. The huge accumulation during the January and June move also gives this chart a very nice overall look in the short term. What is also nice to see this time, unlike in early June, the RS line is leading price to new highs. That along with all that max green BOP makes this chart very pretty. However, the stock sure is not perfect. The fundamentals are not good, but sales appear to be getting better. EPS is bleeding red ink and has been for a very very long time, and sales have grown 86% and 32% recently. Fund ownership is collapsing with only seven funds owning it compared to 12 four-quarters ago. This stock is not a good long for inexperienced emotional traders at all, despite the very pretty max green BOP-filled May and June. Cut your loss with a close below the 50 day moving average, if the stock does not move higher immediately.

REFR is breaking out of a cup with high handle pattern, on strong volume. The stock has been in a steady uptrend since 2005 but starting in April of 2006 it really started to shape up. Then the uptrend started on an explosion of volume, with BOP going max green and staying max green for a while. Then a long base was made on very quiet volume, with sporadic accumulation, and BOP holding near the zero line. Then in February the stock shot up on HUGE HUGE HUGE volume and max green BOP. The resulting cup was made on lower volume and the right side of the cup and handle’s breakout were on higher volume. This breakout from this pattern, along with all the max green BOP in 2007 makes this a very pretty chart. Fund ownership has increased from 11 to 12 funds the past four quarters. However, if you are an inexperienced emotional trader, it is probably best if you avoid this stock. The stock is way too volatile, EPS is nothing but red since the dawn of time, and sales growth is pathetic. This is strictly a play on a chart. Cut your first and the majority of your loss with a close below the 12.72 level and your final loss with a close below the 50 dma, if the stock does not move higher immediately.