Or could this be one of those slow moving, low volume, nobody is in the mood to do anything kind of day? We think and feel it's the latter. Even though some earnings plays have pulled back from their Friday's best levels, it is understandable given the weakness in the overall market. People are allowed to take profit in this market, we suppose..we do and that's why like to be aggressive when the going is good as in the past weeks or two. Makes selling easier on days like today. The good thing is, no matter how you spin today's drop, there's no sense of panic or anything close to it. The best eco number came out today. After the GDP, many expected this deflator number to blow. Instead it came just where the Fed would probably want it to be. Earnings winners are still earnings winner, it has really been only 1 or 2 trading days since some of them reported. The key for us here, is to stick with the stocks that have reported good earning according to the general public and trade it on the long side.
For now, lets just take this market one day at a time and try not to jump into any conclusion on what may happen the next few days or weeks.
NGA, this is a classic gap up off the earning play. We have played this one a few times during the past year and this time is no exception. The only difference this time, is that the stock traded on literally record volume off this earning report. To us, this may be a character changing event for this stock. Is it possible that institutions may give it a legit valuation lift? We think it's possible based on the stock action today and the overall mood in this sector. Of course, nothing is for certain but in this case, we give a high probability that this one will build strength on today's action. Remember the $10 rule for some funds? We actually bought heavily into today's rise and looking for further strength in this one. We expected this to sell off after we noted it this morning, the volume was less than 50k and the stock was up 25%. There is no need to chase as was the case with SYNL recently pre market. This is why we say we watch carefully. Just like SYNL..almost....this opened lower than the pre market high...50c or more lower. If you believe in the numbers of a co', this is your opportunity to buy lower or wait for confirmation this could be a move higher. Simply, you wait till the stock shows strength and climbs from low 9's in this example to the premkt highs for an entry, near/above $10. This is boring to the traders with us, but those less experienced now have two cases of not jumping the gun and getting a nice ride later.
Q1 EPS of $0.28 vs $0.13 in yr ago period; revs $23.5 mln vs $15.4 mln in yr ago period
TO, you can say that it has outperformed the market today, and you can also say that it closed too far off the intraday high. We say whatever the case, this one is being discovered more and more by traders. Once again it made a new high and this will only attract more traders/institutions to take a look at this one. Of course, without good growth/number, we wouldn't be looking at this one. Lets just keep our fingers crossed. We gave this Friday with a half hour to go in the trading in the high $9's, sometimes we are quite surprised some readers are buying high $10's-11 the next day. If you miss a first leg, sit back and wait for a pullback. If it gets momo and doesn't happen for you...move on. There will be others. Just don't chase as in this case 10-15% higher, if the volume is not momo style. You need to differentiate the type play and not worry about a pullback from $11+ but learn to accept it. An IDSA is not a TO, a TO is maybe a USAT.
IDSA, 4 days till the next publication of IBD100 and we think the odds of this one closing above $15 is very high. Of course, when the market is down 32 pts, some players will get skittish and cash out. We are adding some here but not too aggressively. We blinked today as some cream of the crop decided to place a market sell that took the stock down from 13.60ish to 13.00 in seconds, we think... .remember we blinked but the ladder down was clear. We guess the panic one thought the roof was caving in on the market and the house of IDSA would crumble with it. At this point the stock was showing resiliency late in the afternoon, but one or two crack heads messed up a nice picture somewhat. We cleaned it up there with others in the low 13's.
Other than some minor pull backs and potential NCH plays that evaporated with the sliding market as eg SVVS we were looking at for more, we didn't notice a major breakdown in most of closely followed DJIM stocks other than the solars. You can say, "stick a fork in solars." That sector looks "officially" done for now and we'd caution people not to be tempted to play for a bounce. Most are below 9ema, short term support and definitely are of no interest to us still...so don't ask;). But this was the drift when we were selling the 16th of April the most recent run, the following weekend we said, ... "Solars, volume has declined daily on almost of the players. The short squeeze, momo run is over for now. We have no reason to test the calm waters....We'll be there when the waters get infested again....."April 22nd. Hope you've followed...
A few AH blurbs..MTRX going in SP small cap 600, May 1..we're sooo proud..lol. A recent name here, GMRK ( Gulfmark Offshore), put a nice report out tonight, 19 c better.