Two New Speculative Long Positions And One Stock I Am Adding To My Existing Speculative CANSLIM Long Position For Tuesday’s Stock Market Session

February 4, 2008

The two new longs both have plenty of flaws within their charts that will prevent me from making any meaningful size bet in either one. However, I am not going to be shy either with the EPS and sales growing so nicely in the most recent quarter for both stocks. They definitely have potential. PTEC isn’t perfect either but its fundamentals are better and the chart does have very strong accumulation within it. The most recent breakout today isn’t from a very long base so unless the market continues to trend higher strongly this breakout might not hold. So basically, once again, without that real powerful follow-through or a new crop of brand new innovative technological leaders we just have some mediocre longs that are not worth large positions in our portfolios. Without some fresh leadership or a clear downtrend, cash continues to be king.

new speculative long positions: CREE DEPO

CREE is bouncing off support in the handle area of a poorly crafted cup with handle, on above average volume. This chart is a bit sloppy with the V shaped moves in the chart but there is some nice accumulation recently to go along with a lot of green BOP the past month plus. The RS and moneystream lines are hitting new highs ahead of price, showing a positive divergence. EPS grew 56% the most recent quarter and sales have shot up to 34% growth the most recent quarter, confirming the recent price strength. Fund ownership has gone from 89 to 94 funds the past four quarters and estimates are for a YOY EPS gain of 40%. Cut your loss with a close below the 28.53 level, if the stock does not move higher immediately.

DEPO is bouncing off recent support nearing a breakout to a new 2008 high, on strong volume. The stock has been in a very nice uptrend since the lows in August and the rally is happening despite the overall market weakness which is very bullish and can be seen in the strong uptrend of the RS line. BOP has now had three very heavy areas of green BOP making the chart very nice. EPS grew 397% in the most recent quarter and sales exploded 999% in the most recent quarter, showing that there is reason behind this stocks pop. Cut your loss with a close below the 50 day moving average, if the stock does not move higher immediately.

adding to existing speculative CANSLIM long position: PTEC

PTEC is breaking out of a long cup with handle pattern, on very strong volume. This stock has been in a very nice green to max green BOP filled uptrend since January but the stock has not been able to stay above the 50 DMA in a clean fashion. That is why there is so much yellow BOP and an occasional case of distribution in this chart. EPS has grown 124% and 167% the past two quarters and sales have grown 20% 88% and 79% the past three quarters, proving that the stock has a reason to rise. Estimates are for a YOY EPS gain of 100% and mutual fund growth has gone from 42 to 53 the past four quarters, giving this stock a reason to rise into the future. Cut your loss with a close below the 14.25 level, if the stock does not move higher immediately.

Two New Speculative Long Positions And One Stock I Am Adding To My Existing Speculative CANSLIM Long Position For Tuesday’s Stock Market Session

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