One New Speculative Long Position And One Stock I Am Adding To My Existing Position

July 25, 2007

new speculative long position: MFG

MFG is bouncing off the 50 day moving average, closing above the July resistance and at its HOD, on strong volume. This chart is very pretty for a new issue as it has green BOP and max green BOP all over it. The great intraday daily price action, heavy accumulation, and green to max green BOP since mid March just makes this chart a very strong looking chart. What also helps is how it bounced right off the 50 day moving average. The fundamentals are mixed, with EPS falling 19% and 29% the past two quarters, sales growth between 1% and 27% the past eight quarters, a 15% ROE, YOY earnings estimates for 2007 and 2008 for gains of 22% and 8% respectively, and 189% debt to shareholder equity. There is no growth in the fund ownership the past three quarters. Cut your loss with a close below the 50 day moving average, if the stock does not move higher immediately.

adding to existing speculative long position: DWCH

DWCH is bouncing off recent support and putting in a bullish intraday reversal, on very strong volume. What I like about this chat is the periods of max green BOP, the constant green BOP during the current wild market, the extremely strong accumulation since late April, and the tight price action with low volume in this stair-stepping ascending base. What I don’t like about this chart is the red BOP sporadically thrown about in the chart. The fundamentals are nothing to get excited about, but EPS grew 75% in the most recent quarter, sales grew 22% and 14% the past two quarters, cash flow is $.05 a share, and 2008 YOY earnings estimates is for growth of 47%. There has been no fund ownership growth the past four quarters, but management does own 30% showing that they have a vested interest. This is not a good long for emotional inexperienced investors due to the extremely risky nature of this stock but the chart is very green and it is close to the 50 day moving average so it may be worth a few hundred shares. Keep this very small. Cut your loss with a close below the 50 day moving average, if the stock does not move higher immediately.

Last 5 posts in Free Archives Longs

Posted by Joshua Hayes | Filed Under Free Archives Longs 

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