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

February 29, 2008

The low volume mini-rally that has been part of this stock market since the 1/22 and 1/23 move off the lows has been very weak and I have made constant references to the volume being below average and thus probably leaving us with only a bear market rally. Well, as I patiently waited for, the market finally delivered what was expected and that was a nasty swoon to the downside with volume picking up well above average. That kind of action, coming from a prior downtrend is not good for longs and therefore I must continue to pound the table with you newbies and remind you that being 75% to 100% cash is king right now. For those that are experienced, you should obviously know by now, the only stocks that are safe enough to go long are the oils, foods, gold/silver, metals, steel, agriculture, and chemicals. Besides these commodity stocks, nothing is safe, in this market. Be very careful out there and if any experienced investor decides to go long any of these stocks on Monday, please make sure you use limit orders only as all three of these stocks are very thin; the two new stocks are EXTREMELY thin.

new speculative CANSLIM long position: PHX

PHX is breaking out of an ascending chart pattern, on very strong volume. This has been a wonderful stock for a very long time due to its steady earnings growth. The most recent pattern has caught my eye starting with a move in August that came on HUGE volume that sent BOP into the max green zone for a few weeks. After that blastoff the stock has trended higher in a nice quiet smooth fashion, finding constant support at the 50 and 200 day moving average that slowly climbed along with price. The sporadic spots of strong accumulation and green BOP that started near the end of September has helped keep this stock very pretty, even in this very tough market. The fundamentals have turned around and have been very strong the past three quarters which I am sure has helped this chart climb this steady uptrend. This is not a good long for newbies, due to the extremely low average daily volume. Cut your loss with a close below the 50 day moving average, if the stock does not move higher immediately.

new speculative long position: NGT

NGT is putting in a very bullish intraday reversal, is starting to breakout from this short base, and is bouncing off recent support, on strong volume. This chart is very choppy but there is no doubt that recently commodity stocks have become extremely hot as most commodities are now blasting off. That has helped turn this gnarly chart into a very pretty chart on the very short term. NGT bounced right off the 50 DMA on HUGE volume and max green BOP on 2/11 which led to a strong uptrend with a few days of accumulation and BOP staying max green. After the short uptrend, the stock has pulled back and is now working on a very nice base that is mostly quiet accept when accumulation enters the stock. The base, so far, is very nice with the max green BOP and this bullish intraday reversal today that might help start a new uptrend. The fundamentals suck so there is no reason to tell you to load up on this thin fundamentally-deficient stock. Newbies stay away and experienced active investors, if they do decide to play this, should keep it very small and use limit orders only. 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: HA

HA is bouncing off the 50 day moving average and is breaking out of this long and beautiful flat base, on below average volume. This stock has been hot since the recent uptrend started in August as the stock started moving higher on HUGE volume and green to max green BOP. That accumulation, along with the very quiet volume in the flat base with that green BOP just makes this chart one of those near perfect patterns. However, there are some red flags in this stock, with BOP not being max green and the price of the stock being very cheap. But recent earnings were very good and this stock with those earnings and chart pattern will probably not be a low-priced stock for much longer. EPS has grown 156% and 133% the last two quarters and sales have jumped an impressive 18% and 14%, definitely giving this stock reason to rise. This isn’t the best long for newbies but it is still of high quality so a little poke will not hurt. Cut your loss with a close below the 4.94 level, if the stock does not move higher immediately.