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

September 21, 2007

new CANSLIM long positions: DSX EXM

DSX is breaking out above the 50 day moving average, on extremely huge volume. This stock has been in a non-stop uptrend since July of last year and like every other stock in this sector it has racked up some good gains along the way. Recently, this stock put in a short term high in July and since then has pulled back and bounced perfectly right off the 200 day moving average. That intraday bounce ended with a very bullish reversal that then sent the stock higher till the beginning of September. That is when the current low volume pullback leads to today. Today the stock put in a powerful bounce on HUGE volume that saw BOP reverse from red to green. This is an extremely powerful one day move and is given even more credit to it due to the stock being in such a strong industry. What would make this chart a lot better would be if there was not a big patch of red BOP in August. However, the volume did drop off as the base ended and the BOP is now green. The fundamentals are very strong, with EPS growing between 9% and 54% the past three quarters, sales growing between 19% and 68% the past four quarters, a ROE of 18%, a cash flow of $1.47 a share, 38% debt, an EPS growth rate of 129%, an SMR rating of A, an EPS rating of 97, Timeliness rating of A, a sponsorship rating of A, and YOY earnings estimates for 2007 and 2008 for gains of 46% and 25% respectively. Management still owns 46% of the shares outstanding which is good to see that they have a vested interest in making sure this stock goes higher. Cut your loss with a close below the 24.69 level, if the stock does not move higher immediately.

EXM is breaking out of a short consolidation pattern that is on top of a base on base pattern, on extremely strong volume. If you look at a weekly chart you can see that the stock looks like it is breaking out of a very long cup with handle pattern. However, that is too long a time frame for a pattern to be seriously considered. But, it is a very bullish development when prices breakout past all-time highs from a long time ago–that is what we almost have here. Since the beginning of July, this stock has started to see a lot of volume enter it, most of it strong accumulation. The green to max green BOP confirms the strong steady buying and the RS and moneystream line hitting new highs with price also confirm this stocks strength. This chart would be a lot nicer without the period of red BOP in August. The good part of that is that the volume was lower during the selling phase. The fundamentals are growing again after some declines, with EPS growing 65% and 343% the past two quarters after three quarters of declines, sales growing 22% and 40% the past two quarters after three quarters of declines, a ROE of 10%, a cash flow of $3.12 a share, 59% debt, an EPS growth rate of 67%, an SMR rating of B, a timeliness rating of A, an EPS rating of 97, and YOY earnings estimates for 2007 and 2008 for gains of 120% and 40% respectively. This stock is also in the same group as DSX, DRYS, GNK, and GLNG. I am long all of these leading stocks. Cut your first loss with a close below the 43.40 level and your final loss with a close below the 50 day moving average, if the stock does not move higher immediately.

new speculative (one to three quarters away) CANSLIM long positions: LXU TSL

LXU is breaking out of a cup with handle pattern and closing at its HOD, on extremely strong volume. Since the end of 2005, this stock has just been a superstar in a clear uptrend that has not seen this stock touch the 200 day moving average once since March 2006. All the extremely large accumulation and green BOP all over this chart from late 2005 to the end of May easily makes this one of the nicest looking charts out there in that time frame. Since the June top, however, the stock has been a bit rough with some distribution and red BOP from June to July. The rally off the selling wasn’t that encouraging with the low volume but the breakout today on such extremely strong volume that it really appears that the mutual fund community has gone back to work (continue to read on to find out about fund growth) accumulating this stock. The fundamentals are strong and getting stronger, with EPS growing between 67% and 247% the past six quarters, sales growth between 14% and 32% respectively, a great ROE of 54%, a cash flow of $1.69 a share, 197% debt, an SMR rating of B, a Timeliness rating of A, an EPS rating of 74, and 2008 estimates are for a gain of $1.66. Fund ownership has grown at an amazing clip from 4 to 6 to 12 to 21 funds the past four quarters. This, along with management owning 27% of the shares outstanding clearly shows that the smart money is putting their money into this story. Cut your loss with a close below the 50 day moving average, if the stock does not move higher immediately.

TSL is bouncing off support, nearing a breakout above the 50 day moving average, on very strong volume. This stock started off on the right foot, right after its IPO, bolting higher until the June highs. At the end of the move, BOP went green and a lot of accumulation finally started entering the stock. The pullback started off on very low volume and as the stock pulled back further in August a lot of volume entered the stock. On a weekly you can clearly see that both of the weeks combined volume was accumulation as stocks finished higher than the previous week on both weeks. This heavy accumulation continued on 9/11 and today. The stock is now closing above the September highs and another uptrend appears ready to start. The BOP turning green yesterday ahead of the move and the move today having BOP go higher confirms the strength in price. The fundamentals are extremely strong, with EPS growing between 73% and 999% the past eight quarters, sales growth between 144% and 999% the past eight quarters, a ROE of 15%, a cash flow of $0.69, 3% debt, an SMR rating of A, an EPS rating of 74, and YOY earnings estimates for 2007 and 2008 for gains of 152% and 167% respectively. Fund ownership has grown from 9 to 14 funds the past three quarters and management owns 26% of the shares outstanding, clearly indicating that the smart money likes this company’s future. Cut your loss with a close below the 45.12 level, if the stock does not move higher immediately.

new very speculative long position: MCZ

MCZ is bouncing off the 200 day moving average and breaking out above the 50 day moving average, on very strong volume. This is an extremely speculative play and I have played this stock twice before for gains (the most recent 3/27 buy saw a 100% gain in 3 1/2 weeks) so one more seems logical. This setup is not as nice as the others as there is a lot less max green BOP leading up to this move. However, if this is a start of another possible 50-100% move, I would love to be a part of it, instead of having my cash on the sidelines doing nothing. Since there is not as much green on this most recent base and move, I am going to keep this to only a pathetic 100 shares–the big money goes into stocks like BIDU, RIMM, GRMN. The fundamentals are really bad, with EPS back in the red again, sales back in the red, a ROE of 10%, a cash flow of $0.10 a share, 0% debt, an SMR rating of E, an EPS rating of 31, and YOY earnings estimates for gains of 14% and 50% respectively. Fund ownership has grown from 2 to 3 funds the past two quarters, possibly in anticipation of the upcoming increase in YOY earnings. This is not a good long for new active investors at all. It is advised to stay completely away and to save your money for a wiser investment. Cut your first loss with a close below the 50 day moving average and your final loss with a close below the .98 level, if the stock does not move higher immediately.

adding to existing CANSLIM long position: FSLR

FSLR is bouncing off the 50 day moving average and breaking out above the August and September highs, on strong volume. This has been one of the most steady and consistent leading solar stocks since its IPO in November last year. This stock consistently found support at the 50 day moving average as it made its way up to its July highs. During the uptrend, there was a ton of strong accumulation, nothing but low volume pullbacks, and green BOP during certain phases of the uptrend. The stock started pulling back on heavy volume but found a bottom on 8/16 where it put in a bullish intraday reversal on very strong volume. Since then the stock has danced around the 50 day moving average but now appears ready to run again as it is now closing above the key line and breaking out to new multi-month highs. The fundamentals are very strong, with EPS growing between 188% and 275% the past four quarters, sales growing between 60% and 392% the past eight quareters, a ROE of 2%, a cash flow of $0.20 a share, 15% debt, an SMR rating of C, a Timeliness rating of B, an EPS rating of 75, and YOY earnings estimates for 2007 and 2008 for gains of 950% and 124% respectively. Fund ownership has grown from 50 to 59 to 80 funds the past three quarters, showing rapidly increasing interest in this stock from institutional investors. Cut your first loss with a close below the 50 day moving average and your final loss with a close below the 93.69 level, if the stock does not move higher immediately.

adding to existing speculative long positions: PRKR APPY

PRKR is breaking out of a cup with high handle, 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. This is easily one of the prettiest charts out there, and if the BOP was either max green during all the green or the fundamentals were really strong, I would definitely be loading up. 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 (I am reiterating this point). Cut your loss with a close below the 50 day moving average, if the stock does not move higher immediately.

APPY is breaking out of a flat base, on extremely strong volume. This has been a very beautiful chart since February as the stock has a lot of days of huge accumulation in it and the BOP is green to max green almost the whole way from February to now. The most recent flat base has been created with max green BOP since the strong accumulation day on 9/6. This is a fantastically beautiful chart, however, that is all it is as the fundamentals are of very poor quality. EPS has been negative since every quarter since 2002, sales growth has grown between 25% and 387% the past four quarters, the SMR rating is a D, the EPS is 26, and the company has 77% debt to shareholder equity. Obviously, it is not a pretty story. This stock should be avoided by almost everybody as I am only going long a little based on the very pretty chart. Even then, it is a limit order only stock. Cut your loss with a close below the 50 day moving average, if the stock does not move higher immediately.