New CANSLIM Long Position, One New Speculative CANSLIM Long Position, And One Stock I Am Adding To My Existing Long Position For Thursday’s Trading Session

December 5, 2007

Despite such a strong day, there sure wasn’t a lot of HOT charts in the scans, probably due to the low volume. Fortunately, there was one gem in HRBN. HRBN has been a bit wild and the last time it looked real good, in October, it failed. But that was because the market ran out of steam. Now, after the IBD indexes, the major market indexes have finally put in a follow-through and should increase the chances of this stock working. The other chances upping the odds of success is that this purchase is coming right as the stock put in a bullish reversal off the 50 day moving average. Back in October, the line was further away, upping the odds of a failure–which is what happened. Even though it isn’t perfect (doesn’t have max green BOP) it is still very nice and a proper limit order sets us up with a great potential reward to very low risk. GXDX is a fantastic IPO with great numbers but is just too new for most to be traded and ASYS is very pretty with all that max green BOP but is a highly volatile stock relative to the overall market. Be careful out there.

new CANSLIM long position: HRBN

HRBN is breaking out of a base on base pattern, bouncing off the 50 day moving average, and putting in a very bullish intraday reversal closing at its HOD, on above average volume. This chart is very pretty with all of its previous max green BOP and recent green BOP, along with all that accumulation that this stock has had. The stock’s RS line is also hitting new highs well ahead of price, along with the moneystream. Even with all of this positive TA developments, the chart still is a little too choppy to get too excited about. If BOP was max green from the September move to now, it might be a different story. The fundamentals are great, with EPS growing between 24% and 100% the past seven quarters, sales growing between 39% and 135% the past eight quarters, an extremely strong ROE of 51%, 63% debt, an EPS growth rate of 45%, a timeliness rating of A, a composite rating of 98, an Acc/Dis rating of A+, an SMR rating of A, a group RS rating of 84, an EPS rating of 96, and earnings estimates for 2008 are for a 49% gain. Fund ownership has grown from 2 funds to 5 funds the past four quarters, showing that institutional money is finding great interest in this tiny gem. Management still owns 66% of the stock, indicating that they would like to have a vested interest in the potential gains they see in the stock. I have a feeling that if this stock can ever get moving it will end up being one of our better longs–there is just great growth there. I recommend using limit orders on this stock as it only averages 59,000 shares a day. Be careful. Cut your loss with a close below the 50 day moving average, if the stock does not move higher immediately.

new speculative CANSLIM long position: GXDX

GXDX is breaking out of a cup pattern, on slightly below average volume. This stock is very new but if you look at the daily price bars you will see that every day has been very bullish as every single trading session has seen the stock put in a bullish late day rally. There were only two days in November where the rally was weak. The rest of the intraday rallies show the stock coming well off the lows with most of the closes coming with prices higher than the open. These bullish candlestick bars combined with the light volume in the pullback that led to this higher volume rally is very nice to see in a young stock. The RS line hitting new highs well ahead of price is the final nice technical attribute on the chart. And as everyone should know by now, obviously, I would love this stock if the BOP was max green all the way. The fundamentals are growing at an exponentially rapid pace, with EPS growing 200% and 388% the past two quarters, sales growing between 165% and 999% the past eight quarters, 31% debt, a timeliness rating of B, a composite rating of 87, an SMR rating of D, a group RS rating of 90, and an EPS rating of 75. Management owns 62% of the shares outstanding, indicating that they want to have a vested stake in the potential gains of the stock. It is hard to think that this stock will not be higher in the future, with EPS and sales growth rapidly expanding at the pace that they are. Cut your loss with a close below the 26.29 level, if the stock does not move higher immediately.

adding to existing speculative long position: ASYS

ASYS is breaking back above the 50 day moving average, on strong volume. This stock is very beautiful with all the max green BOP all over this chart from last November to today. With all the great price action and constant accumulation, the max green BOP all over this chart makes this a great long for a speculative stock. With the stock also trading over $10, its chances of moving higher is made much better. However, as a rule, any time you see a stock with this much green on it over $10 it is always going to be OK to go long. If this stock, of course, would have had max green BOP all over it going back to the July move to now, I would be loading up. The fundamentals are nothing to get excited about but are improving, with EPS growing 40% the most recent quarter, sales growing 24% this quarter after losing 3% (before that sales growth was between 10% and 88% the past six quarters), a ROE of 9%, 4% debt, a cash flow of $0.56, a timeliness rating of C, a composite rating of 76, an Acc/Dis rating of B, an SMR rating of C, a group RS rating of 59, an EPS rating of 45, and YOY earnings estimates for 2007 and 2008 for a loss of 7% and gain of 97% respectively. Fund ownership has grown from 8 to 11 to 12 funds the past four quarters, showing that institutional quality funds are growing an interest in this story. The beautiful green chart confirms that. New investors should be careful as the reward/risk ratio is strong but the initial risk is a minimum 9% before the cut loss area. Cut your first loss with a close below the 14.12 level and your final loss below the 13.50 level, 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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2 Comments »

Comment by MauiTrader

2007-12-06 21:54:54

Something has happened to the site and we have lost the ability to create new post. Therefore, there will be no new commentary or analysis on shorts and longs. Trust me, I am more upset than you are. I can’t stand not getting everything done, no matter what the reason is. I apologize for this and I pray that this will be fixed in the morning.

The only good news today came from realmoney.com where I have been asked to become a contributor. I am not sure about the details as I have just received the email but I want to thank everyone for helping push the idea on them. Your kokua was beautiful and definitely helped make this possible.

New CANSLIM long position: PDGI

new spec. CANSLIM long positions: AVAV CDS

adding to existing positions: IBKR LIFC EIHI

new short positions: NCR

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Comment by MauiTrader

2007-12-06 23:17:30

CHARTS ARE POSTED AT THE END OF THE ARTICLE. EVEN THOUGH I COULD NOT DO A NEW POST, THE OLD POST STILL ALLOW FOR NORMAL POSTING. SO THERE YOU GO!

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