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

June 30, 2007

new speculative CANSLIM long positions: ESEA NTOL

ESEA is bouncing off recent support near the 50 day moving average, on extremely strong volume. This stock was pretty much dead until the end of January when volume all of a sudden came into this stock. From then on out it was nothing but a solid uptrend, with strong accumulation, and strong support at the 50 dma. What made it even nicer was the brief period of green BOP in April to May and the current streak of max green to green to max green BOP on this bounce. The surge in price, volume, and BOP is very pretty. What is obviously not nice to the eye is the red BOP that is all over this chart. However, since price did not react much to it, it is not that bad. The fundamentals have turned around after a period of negative growth. EPS grew 32% in the most recent quarter, sales have grown 20% and 45% the past two quarters, ROE is a super impressive 87%, 2008 YOY earnings estimates are for a gain of 9%, and debt is 126% of shareholder equity. Fund ownership has just been reported and only 1 fund has a position. Cut your loss with a close below the 50 day moving average, if the stock does not move higher immediately.

NTOL is bouncing off the 50 day moving average, on very strong volume. This is a pretty chart. What makes this chart pretty is the nice solid price action that finds support at the 50 day moving average, the very strong accumulation that is in the chart since early September, and the max green BOP that is all over this chart. It is also very nice to see BOP go back to near max green on Friday’s HOD close. The negatives on this stock come in the form of BOP not being max green the whole way through the base and on today’s move and the RS line is lagging price to near new highs. The fundamentals are getting much better, with EPS growing between 100% and 120% the past three quarters, sales growing from 2% to 11% the past three quarters, a ROE of 1%, and 17% of shareholder equity in debt. Fund ownership has grown from 7 to 8 funds the past four quarters. This is a pretty chart but is too thin for most emotional inexperienced traders. I don’t recommend making this a large position, due to how thin this stock is. Cut your first loss with a close below the 50 day moving average and your final loss with a close below the 3.10 level, if the stock does not move higher immediately.

new speculative long position: DSUP

DSUP is putting in an excellent intraday reversal near the early/mid June support, on very strong volume. This stock has started to really shape up after the early May move on very strong volume. Since that initial move, the stock has climbed on very heavy accumulation, with excellent intraday price action, and with BOP going from green to max green on today’s bounce. Unfortunately, for now, the fundamentals are not that great, with EPS bleeding red ink and sales now slowing after six quarters of growth. However, 2008 YOY earnings estimates is for a gain of 218%. That could be why fund ownership has grown from 12 to 17 funds the past two quarters. This is a risky long for emotional inexperienced investors due to the type of chart pattern we are dealing with here and the low average daily volume on this stock. Cut your first loss with a close below the 13.13 level and your final loss with a close below the 50 day moving average, if the stock does not move higher immediately.

adding to existing speculative long positions: OIIM MCF WTT

OIIM is bouncing off the 50 day moving average and breaking out to a new 52-week high, on very 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, and the way volume is falling off as this stock breaks out compared to November. Obviously, this isnâ€™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.

MCF is bouncing off support very close to the 50 day moving average, on strong volume. This chart is very pretty with all the green to max green BOP since early April, the very heavy accumulation from early April, and the excellent daily price action of this stock since then. The intraday action is very constructive and the fact that BOP was max green five days before today’s move on max green BOP just helps make this chart very pretty. If the stock would have closed a little stronger today and would not have had all that red BOP in early 2007, this would no doubt be a beautiful chart that would have me falling in love. But the red BOP and refusal to close near the HOD is enough to keep me from getting too excited. The fundamentals are getting much better, with EPS now positive with a 114% growth this quarter and sales growing from 33% to 999% the past four quarters. Fund ownership has grown from 8 funds to 10 the past four quarters and management still owns 21%, showing conviction in the company. Cut your loss with a close below the 50 day moving average, if the stock does not move higher immediately.

WTT is bouncing right off the 50 day moving average and breaking out to a new 52-week high, on very strong volume. This breakout and bounce is very pretty with it making new 52-week highs. This chart is very nice with all the green to max green BOP during the Nov-Dec and April-June periods, the heavy accumulation with low volume pullbacks since November, the moneystream hitting new highs, and the BOP expanding to a higher green on todayâ€™s move. What is negative about this chart is that BOP did not stay green or max green during the current base this stock is breaking out of and the RS line is lagging new highs despite the price being close. The fundamentals are nothing to get excited about at all, with EPS no longer growing after gains of 100% and 67% the previous two quarters to the most recent one, sales slowing with only 2% growth the most recent quarter, ROE of only 6%, and debt of 9%. Fund ownership has gone from 10 to 11 the past four quarters and management owns 28% of the stock. So there is some interest. However, if you are a new emotional inexperienced investor, I recommend not going long this stock or keeping it very small. It might be worth a small poke due to how little risk there is in the chart. Cut your loss with a close below the 50 day moving average, if the stock does not move higher immediately.