Despite the fact this kind of market action smells like holiday trading, it is still the kind of profitable trading environment that we absolutely cannot ignore. So what if this sort of action only lasts till the end of this week? Given what we've gone through the last month and half, it's about time we take some from the market. It's true that this sort of action does not change the overall picture, but do we really care at this point? We can spend endless hours debating what the overall picture may look like but it's more practical to get down to the nitty gritty of things and take advantage of what's given to us and make the best out of it. In all honesty, someone can probably make enough returns last couple of days and next couple of days to call it a year. The point is that we simply have to treasure what's happening out there and really take advantage of the situation. When market is in a good mood, we'd always forget how tough the market is during the rough times. The bottom line, we can't take this rally for granted and we really have to do good on our part. Lets get right down to business...
GROW +11.8% JSDA +6.7%, it's important to note that selling is just as important as buying when it comes to trading these type of momentum stocks. We are not here to debate the future prospect of each company and we are simply trying to give our play-book here on how we make the most of these plays here. A rosy market coupled with a good close with those momentum names usually give a high probability that they'd act good the next day. One unknown that we always have to deal with is if the stock goes up next day, "how high will it go and when do we sell?" If you treat stock trading as much as a game as we do here, the decision is much easier. To us, it's not about how much profit we should take, it's all about what we should be doing as a right move or wrong move, much like a game of chess. We sold quite a bit earlier and the price is no where near the day high. Why? We wanted to close out yesterday's play that was intended for this mornings pop. We get it and we closed it. It's something we've been doing for a long while and it's more of an automatic habit and it's always been in our playbook. If these stock withstood the early selling, and market keeps on rolling with no sign of weakness, then we buy a little bit back, usually at a higher price than we sold at. Well, this is how we trade and every little bit of surge we'd just add a bit more. Closing would provide an important clue as to where these stocks may go tomorrow and today's no exception. We are holding some overnight and we'll repeat the same process for tomorrow with a smaller amount. One thing... after getting a 5%+ open is when/if you decide to buy again as we did today, do not let that first 5% slip away. Simply..don't let your additional buys during the day slip into the red. Just call it a day and leave with the original 5%+ gain. We noted early yesterday we'd be looking at GROW later and noted our add. This open action is what we were planning for and it happened to script.
HOT ,+3% where OEH is taking a rest from the endless downgrades, HOT is taking over as the new takeover target in town. Guess what? They are in the same biz too. This just tells us that this sector is hot and we can't afford to write off OEH either as it behaved really well in spite of a downgrade from a major firm.
CYNO, we think stock is ready to challenge high and given the shortened week and "light" volume trading according to other gurus, anything goes.
SMCI, do we like the close? No! Is this the end of the world? No! Did you all get weak hands and sell?..lol. Hey, we're not here to judge anyones style. We can't blame anyone taking up to a dollar profit on our lead. We are adding this one to our daily watchlist and as well onto our long positions. Other than the fact this one is a relatively new stock with good growth, we feel it has potential. One thing is we don't load up as others with subscriptions for days and then let their readers get the remains before they unload their batch on you. You are never far off our entries, especially in time and many times will get a better price if you are a little patient. Still depending on your experience some DD is essential before entering into a position.
CIMT, finally, we threw in this little speculative cheapie into the mix at 3.80's. Sometimes plays take some time to materalize, this could be one of them. They reported a profitable quarter recently and news they are expanding office in China got some traders excited, including us. Who knows, given its float just under 3mln, the special holiday trading week, the China effect, this one may turn out to be the best holder for us. AH 4.23.
This is the Briefing write up in mid-march. We're guessing they will follow up very sooooon on this if CIMT continues up..."CIMT is trading up 122% following the co's early morning earnings report that showed CIMT's first full year of profitability after several years of losses. Specifically, CIMT reported Q4 EPS of $0.07 vs -$0.22 in 4Q05 and revs that rose 11% YoY to $6.0 mln (no estimates). FY06 EPS was $0.07 vs -$0.59 in 2005... CIMT is a small Israel-based co that provides design software tools for manufacturing, toolmaking and N.C. Programming. The co's CAD/CAM (computer-aided design/computer-aided manufacturing) products are used by mold, tool and die makers as well as manufacturers of discrete parts... The co said its business and financial results reflect the turnaround of the last two years, in which it focused on new product development and reorganization of its global sales and marketing force. In addition to being a developing earnings story, CIMT could be viewed as a China play, as the co said its Chinese subsidiary achieved 80% revenue growth in 2006. CIMT also noted that the Chinese market is its fastest growing target market, and they continue to invest and expand operations there... Although the stock is seeing decent volume of 267K shares on today's move, CIMT is normally pretty illiquid, with average daily volume of only 2.8K shares. Also adding to the momentum is the stock's small float of only 2.7 mln shares... Mkt cap: $20.5 mln"
Some other DJIM stocks did extremely well and/or closed well include...
NIHD hit 78.50's WBD hit 86 AMAG up 3.3% BW hit 52.70's OYOG.hit 78. CSV nch
Last night we said we thought we had you in the right stocks , today was the pudding