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

November 3, 2007

FNDT is my favorite chart in the bunch, with its max green BOP, heavy accumulation, and bullish intraday reversals the past two days. It would be a “perfect” chart if BOP would have been max green the entire month of October leading up to the current action. STRN trades too few shares a day for me to get excited about it. New investors should stay away. Everyone knows I love the ASTI chart and its most recent quarterly sales. But its EPS is bleeding red ink and the BOP is not and has not been max green from mid September to now. Without that max green BOP, there is no way I can fall in love, pound-the-table, and recommend ASTI for everyone. But, damn, that is a very pretty chart. Very pretty. SMBL is a very pretty chart but the fundamentals are horrible so there is no way I can get too excited over this one either. However, there is no doubt this is a very green and pretty chart with a very low risk to possible high reward ratio.

new speculative CANSLIM long position: STRN

STRN is bouncing off recent support and the pivot point area of the October breakout, on above average volume. This stock has been in a steady uptrend for a while now but recently, in October, the stock has started to move on heavy accumulation with BOP going max green. With the amount of max green BOP and accumulation in the stock, along with the RS line already hitting new highs, there is a high chance this stock will not setup in a proper base. So it makes sense to poke some now, in case it runs away soon. The fundamentals are starting to pick back up again, with EPS growing 200% this quarter, sales growing 38% this quarter, a ROE of 28%, cash flow of $0.61 a share, 0% debt, an EPS growth rate of 90%, an earnings stability rating of 99, an SMR rating of B, an Acc/Dis rating of A, a composite rating of 93, a timeliness rating of B, and and EPS rating of 85. So there are some fundamental reasons to be long this low float stock. New investors/traders should probably avoid trading this security due to its very low average daily volume of 24,300. New investors should make sure you use limit orders. Cut your first loss with a close below the 11.13 level and your final loss with a close below the 10.25 level, if the stock does not move higher immediately.

adding to existing CANSLIM long position: FNDT

FNDT is following through on yesterday’s bounce by putting in another bullish intraday reversal, closing near a new all-time high, on above average volume. The most recent uptrend start in July 2006 and has been steadily moving higher ever since. The stock has done a great job of finding support at the 50 and 200 day moving average along the way as it rose. The uptrends came on heavy accumulation and, as you can see on your charts, a lot of green to max green BOP. There were only two pullbacks that led to BOP going red, helping make this long term daily look very nice. The recent bounce off the 50 day moving average is more powerful than the previous ones as volume expanded to a level not seen in a full year as the stock put in a very bullish intraday reversal with BOP going max green. Today’s bullish reversal with BOP staying max green HOPEFULLY confirms that this stock is ready to move significantly higher. But, as we all know, anything can happen. That is why at the end of this analysis, we have a cut loss strategy. The fundamentals are strong, with EPS growing between 13% and 40% the past eight quarters, sales growing between 12% and 24% the past eight quarters, a ROE of 10%, a cash flow of $1.03 a share, 0% debt, an EPS growth rate of 55%, a sponsorship rating of A, a timeliness rating of B, a composite rating of 95, an Acc/Dis rating of A, an SMR rating of B, an EPS rating of 89, and YOY earnings estimates for 2007 and 2008 for gains of 23% and 20% respectively. Something I see, that I like, is that the company spends 19.5% of its sales on research. No wonder this is one of the top stocks in its industry group of Computer Software-Financial. 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 positions: ASTI SMBL

ASTI is breaking out of an ascending base on a big saucer base pattern (or a roundish double bottom), on strong volume. This has easily been one of my favorite stocks. I just wish it wouldn’t have failed the June 50 day moving average bounce. If August wouldn’t have happened I would have made some major coin. However, we had to follow our rules and cut our losses. since the early September bounce the stock has been holding up much better this time around. The green to max green all over this chart helps make is so much prettier than what the price and volume action already is. The price action is very tight when you look at a weekly chart and the accumulation is very clear on a weekly chart with little to no selling. The RS line is leading the way with price to new highs confirming the strength in this stock. I would be jumping up and down and loading up on this chart if it would have had max green BOP from mid September to now and would have been a bit closer to the 50 day moving average. However, the stock’s chart is still very pretty and that much green is very easy on the eyes. The problem we have with this stock is that besides it beautiful chart, we don’t have much but a pure solar momentum story. The fundamentals are very poor, with EPS bleeding red ink, sales growing 999% this quarter, a cash flow of $-0.78 a share, a timeliness rating of C, a composite rating of 78, an Acc/Dis of A, an SMR rating of D, an EPS rating of 14, and earnings estimates for losses of .65 and .40 the next two years. Management still owns 24% so there is some comfort in knowing that they have a decent vested interest in making sure that their stock goes higher. There are two funds in this stock, showing that their is some high quality institutional sponsorship interest in this stock’s story. Cut your loss with a close below the 16.10 level or the 50 day moving average, if the stock does not move higher immediately.

SMBL is bouncing off the 50 day moving average and putting in a bullish intraday reversal, on below average volume. Before this stock really started trading, this chart was pretty as it had green to max green BOP from June to July. However, it sure didn’t trade at all. But in early September the stock got a flurry of huge accumulation with BOP going max green and staying that way all the way till the end of October. Despite the BOP moving down from max green, it is still green and starting to trend up again. After the uptrend with strong accumulation, the stock has now started setting up in this nice cup shaped base on very low volume. The only time volume picks up is when accumulation enters the market. The big green bars and all the little red bars says it all, right now. It would be nice if there was more volume on this bounce and if BOP was still max green. It is possible volume will come in shortly and BOP will go max green in time but it would have been nice, obviously, to have had a near perfect chart. Besides this very green and pretty chart, we sure don’t have much else. The fundamentals are very poor, with EPS bleeding red ink, no sales growth to compare to, 0% debt, a sponsorship rating of B, a timeliness rating of C, a composite rating of 59, an Acc/Dis rating of A+, an SMR rating is not available, a ROE is not available, cash flow is not available, an EPS rating of 11, and YOY earnings estimates are for more losses. There is one brave fund in this stock in the most recent reporting quarter, along with management owning 20% of the shares outstanding. This is not a good long for new investors/traders to load up on. Keep it small. Cut your loss with a close below the 50 day moving average, if the stock does not move higher immediately.