Market is still going through a consolidation phase, and it still means that the priority for us is the capital preservation. However, it doesn't mean that we'll be shying away from good trading opportunities, and it'd be irresponsible if we don't trade them. What we at DJIM here stress is that in a time like this, we'd only trade what we think are the best of the best setups and leave the iffy ones alone. We also do keep our trading time frame per play to a conservative level where we'd take profit on small increments, a $1/point here and there and not get carried away with big positions on any one stock. We can't wait for 25%+ DJIM benchmark these days, so taking 5 -10% quickly is fine with us. This style is definitely more difficult to trade compared to riding a few big winners that can offset any small losses from other trades. We are literally trying to basically do with only the most probable plays, with the least risk. This comes in the form of stocks with a earnings base for DJIM. We've heard that many traders around various chat room, blogs surprisingly under performed in October. We're not sure the path they have taken but we've taken/followed the uptrend path here at DJIM. Well, unfortunately this game isn't an easy business so only time can tell whether one is cut out to do this for a living, or not. Here are some recent plays...
The week provided some nice intraday trades off our extended trading thread...CASM, LMRA back to back days in Market Chat. The first 3 below were mentioned in pre market yesterday. The market survived the eco numbers and some of these provided nice entries off earnings.
TWLL.... This one gave us a little surprise late afternoon as it came on with strong volume and then some follow through, finishing with a NCH. The earning action definitely looks very strong and we think it may catch some attention around the trading circle. See more below on TWLL.
BRLC..surprisingly this one traded down to $7.01 after multiple upgrades, a healthy price target of $14 by BMurray after beating estimates handily....7c vs.1 c estimate, revenues climbed 3x. How this one is going to trade is still remaining to be seen. Usually when it gaps up like that with that kind of volume, you'd see some more upside down the road.
SINA beat by .5, upped revenue G, multiple price upgrades in the morning and then closes gap to Thursdays close before EPS. That was a Friday morning gift to have a stock with so many positives only trade 1% higher in the morning. If stocks that beat by .5, raise guidance and only move 1% up, we'd be out of the trading business real fast.!. We'd be happy with a test of $30 here. The first two might have the better upside in the near term as far as collecting points, profits.
MR, stock had another nch(new closing high) on Friday and we are very encouraged by its action. This stock is due to release its earning on Nov. 16th and we think there's going to be a pre-earning run-up play. In last week's DJIM #11, we discussed the further play we were looking for after selling. Monday was a further drop and soon we were sitting on the 9ema ready for another move up.
PVA ..a O&G/coal.....started to watch closely Thursday off earnings ($1.21 v 1.06). More below on Penn Virginia Cp.
BTJ, it seems a lot of the oil service stocks are perking up lately, there is always something to fuel it..yesterday was one of those days. This one also made it to IBD100 as #19. See last weeks DJIM wk #11 for our buy in below $16 , the play we were looking for and got Friday. We are keeping an eye on ALY as well.
EDU, Chinese stocks immune to the pullback? Perhaps! We are certainly seeing strength in many of the Chinese stocks on our trading list.
RVBD, this is one of the techs that broke out on Friday, one of the few techs that are standing out in our opinion. We still can't decide between the APKT, RVBD, DIVX...IPO's.... all we know is they provide plenty of trading opp's at this time, figuring out which will be the champ longer term is anyone's guess. Right now..there is a new champ every week in this IPO tech game.
Speaking of champs, we threw out ATNI at the open mid week ...she was a champ going from $21 area to $24 for many DJIM readers in a few days. We took a lot off near $24 as it seemed a bit tired late in the week. The numbers look great and we look for more out of ATNI. This is a relatively unknown stock, we hope and by the early volume off earnings we think this may be on a few trading lists soon.
RIMM,APH,UCTT round out our lists. As per BT's charts, ACOR proved it couldn't handle its weight. Looks like many were expecting something out of the CC to fuel it. It didn't happen and many sold off. Still we'll keep this one around DJIM and hope for a news spark.
SYNL, EML are two DJIM profiled quality EPS crawlers..these are for the ones that like their sleep.
So, it seems that we have quite a few new plays on our hand after cleaning house late October. We are basically trying to play the best setups and again keeping our time frame short. Until the market mood improves or we get a great earnings winner, this is the way we are going to be trading.
Thursday, September 28, 2006 at 01:22PM