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

February 11, 2008

Both of the new longs look fantastic but, of course, they have flaws. NEU is breaking out of a chart pattern I really can not explain and of course just as I was afraid SPW is starting to make its move WITHOUT the volume. Normally the moves that you see in SPW are accompanied by a huge surge in volume making them some of the best longs that you can take. But SPW isn’t perfect with that lower volume and I guess with BOP not being max green it really doesn’t matter. The RS line on both NEU and SPW are extremely impressive with both RS lines well into new high ground. That kind of positive divergence should be very bullish for both stocks as long as the market continues to trend up. Heck, the stocks will probably move higher even with lower prices. But in case they do not MAKE SURE YOU READ WHERE THE FINAL CUT LOSS AREAS ARE. This isn’t rocket science. Don’t try to make this harder than what it is. CREE has been talked about A TON already so there is nothing I am adding here to the discussion. XTLB is just a beauty but with the poor fundamentals it is hard buying a lot of it up here.

new CANSLIM long position: NEU

NEU is breaking out of a V-shaped cup with high handle pattern, closing at its HOD, on extremely strong volume. This stock has just come back to life after a year and a half of going nowhere. The stock started trending higher in August on much higher volume that culminated into this most recent move out of this V-shape base. The base has been built with huge accumulation within it along with BOP growing to a higher green level during that time, making this a beauty of a chart in the short term. Not only that, the RS line is leading the stock well into new high ground, showing that this stock is much stronger than the overall market. 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: SPW

SPW is bouncing off the 50 day moving average and breaking out to a new 2008 high, which is close to a new all-time high, on below average volume. This stock has been in a very nice uptrend since 2004 but really started to gain steam in 2007 as the stock started to really move on a lot of accumulation with a lot of green BOP all over the place. However, the recent price action is what I really like as the stock has built the current base with some heavy accumulation around the 200 day moving average, with BOP staying green rising to a higher level, and with the RS line hitting new highs well ahead of price. This is a very great chart but it is not perfect since there is no volume on today’s move and the BOP is not max green today or the past month. Therefore, this new purchase will be half the size as my first attempt at going long. This is what happens in rough markets. Get used to it or stay in cash. Cut your loss with a close below the 50 day moving average, if the stock does not move higher immediately.

adding to existing long positions: CREE XTLB

CREE is breaking out of a poorly crafted cup with handle pattern, on very strong volume (extremely strong on a 3-day chart). This stock has been a great long and continues to look great with a new breakout on very heavy volume with BOP remaining green. The chart is a bit more risky up here but all the heavy accumulation and green BOP since late December sure does make this breakout look great. Cut your loss with a close below the 50 day moving average, if the stock does not move higher immediately. Keep this buy small as this is our fourth pyramid buy and this will be VERY small for me (I am talking like 30 shares).

XTLB is breaking out of an ascending base pattern, on strong volume. This stock has been very pretty since the end of December when the stock took of on max green BOP with a lot of very strong accumulation. The stock has stair-stepped nicely creating a nice short base on base like ascending pattern, with the RS line leading the stock well into new high ground both breakouts. This is not the best long for newbies, due to the very low stock price and poor fundamentals. Cut your loss with a close below the 3.54 level, if the stock does not move higher immediately.

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

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