DJIM #7 2007

You can only describe last week as a re-run episode of the market and the goings on in DJIM land from last Q.  First, the market..we covered the CSCO part in yesterdays chart segment. Was friday action a surprise?.  Hardly, if you are reading the Journal and listened to what we might be doing when we said history might repeat itself.  The CSCO-NAZ swoon.  Some unfortunately might only look for a mention of their stock here in the Journal and quickly run through he rest.   Well, we can't tell you when to buy or sell, remember we're not your FA's.   All we can do is give our perspective into what and when we are buying and the strategies into selling a position or the market.. It is up to you what you do with the information.   For vet traders here with us this means diddly, they are here because like us, they like the early bird specials and share trading ideas in a common niche and can quickly trade out of a market downturn.   So when we say, " Some suggested reading in our archive as to the possibilities for tomorrow.  Same ole?.  We'll be cautious and take any bump for profits most likely".   Please give these future blurbs some thought and how they might be part of your strategy.  These were the last words following CSCO's report,  hopefully some of you started doing the same in stalled positions and were not bitten and surprised on Friday.  Even the experienced trader needs to be reminded of the past, we all can't remember everything related to this market and the stocks involved.  Still the damage was minimal to closely followed DJIM stocks and if you keep to selling the 9ema volumes breaks you could be in a nice position to buy a quality stock lower plus walk away with the majority of your recent profits. eg. CNS

If you're finding it more difficult to make a dollar in 07',  it is time you take out your successful trades and your bummer trades and look for an emerging pattern.  It might be harder for some in this market environment and therefore you need to figure out what you are doing and tweak it.  Try to figure out what you are doing differently??.  Is it the type of stocks you are playing?...Are the bums different than the champs in market cap etc.?.... do you make your best trades when you get in on day 1 but have bummer trades when you get on day 5?.  If you're fumbling around and can't understand it, send us an email with recent buys and sells/dates/prices..winners and losers.  It's pretty easy for others to see what you are doing wrong, things you don't see.

Now back to some familiar faces making a return to DJIM this Q..some much stronger than before!.  Stronger is not just a mean lean fighting' EPS machine, many times what simply makes it stronger now is the stock finally being discovered and getting some air time on trading sites/blogs.  The first two names definitely fall into this category..these are those DJIM crawlers that have a few extra legs now to move forward with hopefully a little more speed and interest.  We'll cover primarily the new blood from last week as some of the January winners consolidate after their big moves.

EML, well we've said enough about it and there is the past link to read from last Q on it.  As for trading EML, last week definitely provided some excitement.  First off there was the alert on Monday to the goings on with a institution getting on a chunk of stock.  A few of you are very glad you started a position that day as the surprise earning release was a hit.   If you have not traded a CCF type, EML might not be a stock for you get in Friday or tomorrow, maybe ever.  If you can't deal with the bid and ask spreads and put them into context of how thin this stock is..well then you shouldn't be dealing with it.   A buck move in EML up or down might be like a .25c cents in another!.  Trade what you are comfortable with!.  If you trade the under $10-15 stocks strictly this may not be your type of stock to trade.  Someone who flips 2 or 3 positions will find this to be the wrong flip.  If you need to flip this to get to the next flyer, you might be selling much lower than you should to get rid of your EML position.  Know your capabilities and if you're an investor,  consider purely the EPS strength and the potential for more excellent Q's based on it's business and do not get caught up in the daily action.  Look at what it's done since discovered here last Q in % return.

SYNL, we pointed out this is more than a current earning play. Like EML and the potential we pointed out for even better earning last Q, this one has the potential to put up better numbers because of its fire retardant product to be unleashed for fed regulations. There is also the ethanol angle here.  We won't get into these details as everyone should DD into anything they consider owning.  Just think of SYNL as a potentially laced eth mattress and the fun that could be!.lol. .We liked the action Friday following the initial reaction to day 1's earning and added.

TRT, here we go again!..lol. Incredibly, this is already our 3rd time getting in on TRT's earning. We pointed out early there might be still some overhang from the previous Q waiting to get out. There also might be curiosity out there if this can go higher after seemingly being blocked off in the past and so not a rush as before. The best way to approach this is take it slow and start with a starter and let the market dictate in the upcoming days if this has more potential.  This is what we did by getting a starter in 13.50's and will wait for $14 stability to possibly add. The sequential revenue ramp to over 14mln from 9+ is impressive but it is curious how they only produced .2c more in EPS sequentially.  If there is a negative..this is it as gross margins declined in part, but when you add the 3 Q's of EPS strength, this stock has some things going for it.

CGX, a mid week buy continued to look good Friday as it made another new high.  CXW, we added Friday off its recent earning report.  BOA gave it a buy Friday and a 67.50 tgt....yep the .50 must be some code to other big boyz..lol.

VARI, is definitely a helluva chart at work and is up 6% since DJIM's buy in.  Like CGX it was still ticking up and showing strength as the market weakened. These are the plays you want to be in on days like Friday, while backing away from anything breaking 9ema on extra volume or just stalled and lagging names like this.

AVZA, among the cheapies this one is showing tolerance to the markets negativity on techs.  This is trading like NWK recently showing resiliency to outside forces. Considering this is up nearly 20% from the last alert and even more since the earning bell alert the job is done..or is it?..Well , you're not going to discard a stock making a NCH ...but you are going to be extra safe not to blow the profits away next week.

If you're indecisive with what to do with some positions, best way to approach the week ahead is maybe think 9ema . We have many stocks making highs recently and this 9ema is where we look for some short term support to come in.  The dip buyers have been all over the market the past months, so this is one area on individual stocks that they would like to enter on.  You could possibly see this happening in the many end of day hammers in charts (MDCI).  If a DJIM closely followed falters here(9ema) on extra volume, it is time to let go as in CNS, which had a great run recently.  At the end,  letting go higher can give you great opp to make a fast trade in the same stock for a day or two like in GLDN by buying back low....recycle....will CNS be next?.  Chances are good as we can't see any news of substance, but we do want to see a reversal of some substance before getting in again.

There are plenty of earnings this week, so know when/if your stock is walking up to the guillotine...try not to follow