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

September 19, 2007

The market is in full rally mode and we are well positioned. However, if this rally is real, now is the time to start finding the perfect charts. One near-perfect chart did show up today and I am adding more to it in the morning. BLL was first mentioned back in 9/5 and you can see there that I was very bullish on this stock. I am even more bullish on it now and definitely love this pattern. However, I wish it was up only 3-4% instead of the 5% gain and if this chart had more green to max green BOP I would definitely be all about this stock. However, it is a great one but I am waiting for better to show up if this rally is real. The rest of the longs in here are solid and are safer here now that we have had a REAL accumulation day. 2.5% plus up days are nothing to sneeze at. I don’t want to see ANY top calling any time soon.

new CANSLIM long position: ESL

ESL is breaking out of an ascending triangle pattern, on above average volume. This triangle can be seen by drawing a trendline and connecting the tops of the July, August, and Sept 13 highs and then by drawing a trendline connecting the mid August, late August, and September lows. Even though the chart pattern is a bit iffy, the clear accumulation in the volume and price pattern, along with all the green BOP, show that this stock has some good buying interest. The only problem that I see is that the RS line is not leading price to new highs. Therefore, it is probably wise not to load up on this one. The fundamentals are strong, with EPS growing between 12% and 53% the past four quarters, sales growing between 8% and 31% the past eight quarters, a ROE of 8%, a cash flow of $3.86 a share, 40% debt, an EPS growth rate of 16%, an SMR rating of C, and EPS rating of 82, and YOY earnings estimates for 2007 and 2008 for a gain of 57% and a loss of 6% respectively. Fund ownership is choppy but is trending down from 101 to 95 to 102 to 99, indicating that some funds are losing interest in this story. Cut your first loss with a close below the 50.88 level and your final loss with a close below the 50 day moving average, if the stock does not move higher immediately.

new speculative CANSLIM long positions: SUNH HLIT GMST

SUNH is bouncing off the 50 day moving average and breaking out of an ascending base, on strong volume. This stock has been in a nice uptrend for a very long but has been choppy along the way. Hopefully, this breakout can take the stock on a steeper run. Since August of last year, this stock has move higher on strong accumulation and green BOP while pulling back on low volume, just what you want to see in an uptrend. SUNH shook me out at the end of July but I should have held on to the stock and should have known a bounce at the 200 day moving average was probably going to happen since the pullback was on low volume. However, if this stock is going to run, we are still getting in at low prices as the breakout is fresh from a low volume base and BOP has turned green. My only beef is with the RS line not leading price to a new high. The fundamentals are starting to really pick up, with EPS growing between 65% and 150% the past three quarters, sales growing from 6% to 73% the past seven quarters, a ROE of 22%, a cash flow of $0.71 a share, 113% debt, an EPS rating of 72, and YOY earnings estimates for 2007 and 2008 for gains of 22% and 35% respectively. Fund ownership has grown from 35 to 53 the past four quarters, confirming the rise in the stock and showing that the big boys are interested in this company’s operations. I would not load up on this one because there are some missing fundamental data and the price of the stock is in the teens. Cut your loss with a close below the 50 day moving average, if the stock does not move higher immediately.

HLIT is breaking out of an improper (too much volume on second leg down) double bottom with handle pattern, on strong volume. Despite the ugly left side of the base in April, this stock has been a very pretty chart July of last year. The current completed double bottom with handle pattern is perfectly formed and would be a perfect example of one if only the volume was lower on the second leg down. Volume should dry up as the second leg undercuts the first leg. However, on the price patter, the pattern is what it is. More recently, the move off the August lows saw a lot of accumulation come in on the upside and absolutely no selling on the downside when the stock drifted lower. At the end of August, BOP turned green, stayed green during the handle, and jumped a notch closer to max green on today’s breakout. Despite April, this is a very nice chart. The fundamentals are improving at an impressive rate, with EPS growing from 350% to 999% the past four quarters, sales growing from 3% to 34% the past four quarters, a ROE of 11%, a cash flow of $0.30 a share, 0% debt, an SMR rating of C, an EPS rating of 75, and YOY earnings estimates for 2007 and 2008 for gains of 122% and 38% respectively. Fund ownership has grown from 69 funds to 81 funds the past four quarters, showing that big institutions are gaining interest in the company and their earnings. However, this must still be a small position, due to the low price of the stock and inherent risk from a natural pullback to the 50 day moving average. The stock is only slightly above $10 and even though it has a recent pretty end of August to now it still must be a small position. Cut your first loss with a close below the 9.99 level and your final loss with a close below the 9.58 level, if the stock does not move higher immediately.

GMST is bouncing off the 50 day moving average, on above average volume. This has been a pretty chart since mid December when a big move off the moving averages on huge volume and max green BOP sent the stock moving higher non-stop until the July highs. Along the way, there was constant heavy accumulation, low volume pullbacks, support on the 50 dma constantly, and green BOP to max green BOP almost all the way. After the July highs the stock pulled back very gently during the wild market pullback to the 50 day moving average and found strong support. The move higher has seen two days of clear accumulation while the slight pullbacks were on low volume. BOP is also turning green again, making it nice. The fundamentals are improving gradually, with EPS growing between 67% and 500% the past six quarters, sales growing between 9% and 17% the past three quarters, a ROE of 18%, a cash flow of $0.24 a share, 3% debt, an SMR rating of B, an EPS rating of 72, and YOY earnings estimates for 2007 and 2008 for gains of 6% and 28% respectively. Fund ownership has grown from 68 to 80 the past four quarters, showing that the big institutional investors are interested in this company’s story. This is another one that must be kept very small due to its low price and non-perfect earnings. If the chart was perfect or if the EPS was 99 with A ratings for everything, maybe I would say load up, but I doubt it. Cut your loss with a close below the 50 day moving average, if the stock does not move higher immediately.

new speculative long positions: ARCI AATI

ARCI is bouncing off recent support in this flat base, printing an engulfing candle pattern, and closing at its HOD, on above average volume. I am not going to analyze this stock because NOBODY should go long this volatile, low priced, and low average daily volume stock. If you are crazy enough to poke at it like me in the “hopes” of a home run, make sure you keep it a LIMIT ORDER ONLY. Cut your loss with a close below the 7.19 level, if the stock does not move higher immediately.

AATI is breaking out of a V-shaped cup pattern after bouncing off the 50 day moving average, on very strong volume. This stock has been very pretty with all the strong accumulation and green to max green BOP, since late April. But, overall, despite the overall green all over the chart, the stock is a risky long due to the V-shape base. If the base was more round and if there was a handle, instead of the stock breaking out above the July highs without pausing, this would be a long worth taking a decent stake in. However, if you do trade this stock, you should definitely keep it small due to the low price of the stock, the poor structure of the base, and the very poor fundamentals. This is a play on the strong price/volume and green BOP action. New traders should probably completely avoid this one, just like ARCI. Cut your loss with a close below the 50 day moving average, if the stock does not move higher immediately.

adding to existing CANSLIM long positions: BLL BKR

BLL is bouncing off the 50 day moving average and breaking out above the August resistance, on strong volume. This chart is one of the best looking charts I have seen in a long time, with all the HUGE volume the past two days with max green BOP to go along with it. However, this chart would be perfect if BOP was green to max green the whole way before this move. However, it was not, so we have to take what we are given. This is still one of the nicest charts with the best risk/reward ratio I have seen in a long time. Even if it fails, you will not lose a lot of money and that loss is no way close to the potential gains. The other clearly nice setups in this chart is that the RS line already hit new highs in late August, well ahead of price, and the moneystream line is hitting new highs. The fundamentals are very strong, with the EPS growing between 10% and 81% the past five quarters, sales growing between 2% and 24% the past eight quarters, a ROE of 30%, EPS growth rate of 20%, cash flow of $5.34 a share, and YOY earnings estimates for 2007 and 2008 for gains of 22% and 10% respectively. Fund ownership has grown from 186 to 192 funds the past four quarters, showing that the big boys are still interested in this story. The only two problems I can see with the data is that the Containers group RS is very weak overall to the market and the debt to shareholder equity is a very high 195%. Still, recently, they do not get much better than this. Cut your loss with a close below the 50 day moving average, if the stock does not move higher immediately.

BKR is breaking out to all-time highs from a very short flat base, on strong volume. This stock has done nothing but move higher since its IPO in 1984 and it appears it isnâ€™t ready to stop yet. While the stock has made a lot of gains already the past year, this stock appears ready to get more. The massive accumulation from April to the beginning of September has led to the stock creating what could be a flat base. In this flat base, volume has come down, while at the same time BOP has moved to the max green area. The bounce today, off the bottom of support, with the stock closing near the high of the day and with BOP staying max green makes this a very strong chart pattern despite the large gains already. The fundamentals are strong, with EPS growing between 75% and 638% the past three quarters, sales growing between 1% and 25% the past six quarters, a ROE of 7%, a cash flow of $1.38, 12% debt, an EPS growth rate of 15%, a SMR rating of D, an EPS rating of 89, and YOY earnings estimates for 2007 and 2008 for gains of 196% and 11% respectively. Fund ownership has been rocky but has grown from 19 funds to 28 funds the past quarter, showing that institutions are regaining interest in this stock and its story. Cut your first loss with a close below the 47.52 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 CANSLIM (a few quarters away) long: YGE

YGE is breaking out of a cup with handle pattern, on strong volume. This stock has a very pretty IPO chart compared to almost all of the other ones out there. This stock made a very impressive move off of its IPO with volume expanding and BOP going green near the end of the run. After setting up a bit of a wild base, YGE started moving higher on higher volume and is now currently making a very pretty right side of a base. It is very pretty with all the growing green BOP, bullish intraday reversals, and strong volume. Also, in the base you can see clear bullish intraday reversals all over the chart in August and on a weekly you can see the biggest weekâ€™s volume came on an up week. Not only is the stock very nice but so are the fundamentals. Despite a blip in EPS the past two quarters and a huge debt load, the fundamentals are very good, with sales growing between 121% and 527% the past eight quarters, a ROE of an incredible 213%, an EPS growth rate of 82%, an SMR rating of B, and YOY earnings estimates for 2007 and 2008 for gains of 82% and 90% respectively. Management also owns 45% of the shares outstanding, indicating their commitment to higher stock prices by being such large shareholders. This is a great stock with a very nice IPO chart. A couple more good quarters of EPS growth and this stock will be a CANSLIM quality stock soon. Cut your loss with a close below the 18 level, if the stock does not move higher immediately.

adding to existing speculative long: PRKR

PRKR is bouncing off the pivot point area’s support, on strong volume. This is a very very pretty chart and I love all the green to max green BOP all over it, since the beginning of May. The constant and steady accumulation, along with the extremely low volume and calm pullbacks, combined with all the green BOP gives this chart a very nice overall structure. Sadly, besides the very green chart with a very good risk/reward ratio, there is nothing else here. The fundamentals are horrible and are actually pretty much non-existent. The only two things going for it is that it is in a very strong group that has a RS rating of 94 (Computer-Networking) and the ACC/DIS rating is a solid A. New investors should definitely stay away but realize that this is a very pretty chart and if the fundamentals were HOT and there was an EPS of 99, for instance, I would be all over it. Cut your loss with a close below the 50 day moving average, if the stock does not move higher immediately.