One New CANSLIM Long Position, One New Speculative CANSLIM Long Position, And One New Speculative Long Position For Friday’s Stock Market Session

February 21, 2008

All three of these longs are good longs. Nothing more, nothing less. NEOG is too risky for most newibes. BABY is schizo so it works half the time and the other half of the time fails making it a difficult CANSLIM long. However, the risk is not that bad considering the potential gains from this fundamentally strong stock. DROOY is risky with the lack of earnings but the chart is well crafted with lots of accumulation and green BOP making it a very pretty stock in the very strong and bullish metal ore-gold/silver group. I do not recommend loading up on any of these, as the market continues to do its dance of up, down, up, down, up, and down.

new CANSLIM long position: BABY

BABY is bouncing off the 50 day moving average, on strong volume. This chart has been very nice since the September rally where a lot of accumulation and green BOP has made its way onto the chart. The stock appears ready to attempt another breakout to new highs and the volume on today’s move along with the RS line already breaking out is a great signal to go long. 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: NEOG

NEOG is bouncing off the 50 day moving average and breaking out to a new all-time high, on very strong volume. This stock has been in a very nice uptrend for a long time but the most recent base was a bit V-shaped making the chances of success a little more risky. However, the stock did find support at the 200 DMA and within a few weeks was back above the 50 DMA–that is bullish. This is a bit risky for new investors with the stock averaging only 38,000 shares daily. Therefore, limit orders only must be used on this stock. Cut your loss with a close below the 50 day moving average, if the stock does not move higher immediately.

new speculative long position: DROOY

DROOY is breaking out of a base on base pattern (not a cup w/ handle because the base is coming from a downtrend), on very strong volume. This chart has gotten really pretty since the move in late October started with the stock moving higher on very strong volume with BOP going green and staying green for a while. After another base the stock moved higher again on strong accumulation with BOP going green before making the new base. The current base was created with green BOP and quiet volume that led to today’s breakout on strong volume with BOP nearing a max green reading again. Cut your loss with a close below the 10.70 level, if the stock does not move higher immediately.