DJIM #20 2007

Rundown of DJIM's closely followed heading into Mondays trade...

TNH, definitely one the big winners on the week with a 24% pop.  We profiled Terra Nitrogen, fertilizer maker, back on April 8th (DJIM #15/#16), we said if you catch it on the right side, it could be quiet the ride. The right side has been now with Nitrogen in great demand and because of NG pricing.   The stock closed at $95, up over $30 since April notes.    Remember, she can be the volatile one and the higher she goes, the higher the chances of seeing greater volatility.

NGA,  though this one did not finish over $15 as per IBD requirement,  it might as well have finished above it to ease the suspense.     So is this more than and IBD play or not?   At this point, who really cares?    As long as the volume + price action do not die down, we are going along with it.   What we feel is that there are momentum hedge funds behind the work of this one which explains the consistent volume.   We like this one because of its relative liquidity compared to some of the other low priced IBD plays.    Why does it matter?   For those of us who trade more than a couple of thousand shares at a time, this is the kind of action that can get you in and out with relative ease.   What we are watching out for is the blow off top volume, as a warning sign.   So far, so good!. Our note pre market indicated some selling might come off the insider selling news.  This happened and provided a nice dip into the $12's early on.    Hopefully, some were able to get more there or low's $13.   The fact this occurred probably held NGA off $15 for now..   Why?.    If you bought high $12's, very low $13's Friday, would you not have sold at the high $14's if you loaded up in the morning???.  We did some.   Once this moved beyond $13.50ish, you knew new money would be coming in so not to miss the run to $15 and above.   No better place to sell for someone making a morning buy in the 12's- low 13's, don't you think?.     We're patient.    IDSA now NGA.  In so many ways this played out just like IDSA last week.    Hopefully, you were prepared to trade it smartly after last week.

IDSA   so the stock made it to IBD#43, a week later than it was "supposed" to.  Lol   Well, things will definitely get more interesting from here.   We think the exposure of IBD does bring more positive things to a stock than not.   It actually brings this one to many more traders' attention.  The OS/float definitely stands amongst the IBD 100 names.    As long as this one is getting more exposed, it's unlikely that the play goes away anytime soon.   We are using our usual approach with this one from now on and look for new highs as an excuse to add and 9 ema as key support.  Simply, the traders gut told us this was the one under $15 that was going to get riled up friday in our morning note.   We added in forum the night before to a IDSA question..Needs volume!.  We pointed out volume was at the previous days high quiet early, Friday. This was indication to us more was to come and a good chance this was going to take IDSA beyond $15+.

FWLT, wow is the word to describe the action in this one.  In our opinion, this is the kind of stock that's much much easier to play compare to NGA, IDSA and definitely the SIF's of the world.   Why?   This one is a liquid monster, an institution's heavy play.   Even as retail trader, we have no problem of going big in size and playing with the big boys.  You can't do this on a SIF type.   Of course, if you have a smaller sized account, this one still provide lots of fireworks even for small lots.  For every 100 share lot at $78, this made you $1800 in a few days.  Again, we say, don't back away from the expensive plays such as this and the MA's so easily.... As we tried to point out, we felt FWLT had more short term upside potential from the pre-mkt prices of FWLT ($78) compared to TRT's (19.50).   Based on closes Friday, FWLT is up 22% and TRT is 12% from that  possible morning buy-in and has been way more liquid to trade.

LXU, this recent DJIM pick up is gaining traction and starting the ride the coattails as many are starting to see it as a Ag play.  Their chemical biz seems to be thriving as seen by EPS results and it's definitely one of our favorites.   The ticket here to consider!. POTash is around $200, TNH, is near $100 and if I might have missed the ride, maybe my only only logical cheap play here might be LXU??.   Hmmm.    It is in top 5 performers in the Agriculture section of IBD movers.   Besides, there is a new #1 IBD Industry Group and it is Agriculture and Fertilizer...really, we're not fertilizing you!

SPAR, this pick up pre market the other day at $30 was a quick bump to high of $32.70.  We sold some Friday into the Cramer push and later picked some up cheaper again.  Selling into strength generated by outside influences, such as Cramer is a no brainer.  This one falls into another sector that is thriving.   We were watching this angle since AH takeover by bringing FRPT into the DJIM fray Monday. SPAR is intertwined here as they are the chassis maker dealing with FRPT.

CPY, we put this CPY back out at $80 Friday on alerts as a buy in again.  It manged to climb another $3 bucks higher at one point.  Just keeps on ticking and it is more than the retail investor buying 100 lots here that is still driving this higher at these levels.

TRT,  we are holding some TRT but on a short leash to see if a IBD crush comes.  The play here started back in 2006 based on EPS and their China connection starting what we thought would fuel this compnay.  We played it now for another 2 Q's  and this is the first Q that we saw revenue slow down.  It was actually a tad lower sequentailly and Product reveune dropped some 20% sequentially.    So has the Asian buzz hit a wall as these numbers might indicate?.    At this point after 3 excellent Q's,  you should not be looking at YOY Q numbers here,  but sequential growth.   If this was a big Semi name that showed no sequential revenue growth,  besides the under 300k in net income, it would likely been a ho-hum report as analysts would not be looking at YOY if they had been placing estimates on the stock for this Q.    They would have looking at the 3 previous Q's since we've been following it and their expectations would be based on that!.   Simply , sequentail reveune growth has been curbed some it seems for now.   $6.4>  9.5>  9.9> 14.06 and now 13.6mln in revenue for the last 5 Q's.    An advantage of no analysts covering a DJIM stock is seen here.  The problem is the company gives no guidance, so you don't know if the revenue has hit a peak and if EPS next Q might hit a snag as well.   Anyways, we're in for some, this just ain't one of our top holds at this time.  We'll see how it starts to play out early in the week.

SPAN, a May pick up( profiled in Alert sec), is the little engine that could, a slight pullback mid week and then a NCH to close out the week.

SIF, a hot market definitely brings out hot money in the micro caps. At this point anything new is beng chased up if the headline numbers stick and we joined in with some of you for a quick trade.   Definitely, some of you guys got more out of it than us!.   Great!.   With so many plays on our plate Friday, we left this while the exuberance was high and while it was still possible trade the bigger lot sizes to make it worthwhile.  We don't know if that will be the case by mid-week, if we wanted to sell a big lot hold at a decent price.  Time will tell.   You see, some plays are taking EPS to a different level in this market, as in potential one Q wonders being run as if they will be what TRT, BTJ, DXPE, NGA in the beginning of their cycles.  Those companies were turning around and you could see by their growth figures.  Not only YOY growth, but sequential revenue/EPS growth as well.   This is how companies become IBD inclusions.  We see pretty stagnant revenue growth Q over Q's at SIF with one good EPS Q under it's belt now.   There is no saying this company can pull off another going forward, despite being in a good sec.   We don't see it as 2 Q's with upside EPS, last Q was almost all government grants income that made up the EPS #.  We're not knocking the company, we're just saying it's not for everybody to trade here, especially if thinking one EPS Q will make it the next NGA, BTJ, DXPE etc.  This simply means for those considering playing SIF starting Monday,  be careful if thinking this almost 100 year old co' will become a solid player into the next few Q's.   DJIM members need to differentiate the type of plays conducive to their style and abilities.  This is all we are pointing out here.   For those giving it a run....keep pushing and we might be back to help out.   IBD numbers are on equal terms to TRT's and made it on Aerospace IBD hot list this weekend.  Institution holdings are about 25% in this name, if their Blackberry's were not working overtime selling Friday, this upcoming week might get some of it.  If the shares get in retail hands, who knows what can happen in a happy market.  Will leave it to the speculators for now and concentrate on companies producing revenue, EPS growth Q after Q.

CROX FSLR TRCR ADPI HAYN NTLS MA SYNL, all behaving fine after being followed closely here following their EPS this Q.

HDNG TWIN FTK  added to IBD or moving up as in HDNG case after EPS #'s last week.

This market is moving clearly off the earnings of S&P co's, small caps etc. and we at DJIM definitely are simply in the right niche at the right time!